Slide1: The Global Crop Protection Market –Industry Prospects Phillips McDougall Vineyard Business Centre Saughland Pathhead Midlothian EH37 5XP Tel : 01875 320611 phillipsmcdougall@dial.pipex.com


Slide2: Market Performance 2005 (Distributor level – average exchange rates - Nominal US$)


Slide3: Crop Protection Market in 2005


Slide4: Growth Markets Static to Slow Growth Static to Decline Growth Markets Static to Slow Growth Static to Decline Asia: 24.8% of total Reduced rice area in Japan and Korea Improving agricultural economies in developing countries Further GM uptake in China and India Drought in Australia, Vietnam and Thailand Cotton insect pressure in India low Late but severe monsoon in India Investment in grains in China Australian wheat planted area down Crop Protection Market 2005 NAFTA: 25.0% of total Strong Farm Economy Weak Dollar at start of season Increase in agrochemical and trait prices Dry conditions in Central USA Glyphosate price weakness Increase in GM area Asian Soybean Rust Latin America: 17.1% of total Improving Agricultural economies Increased GM uptake in Brazil Drought in South Brazil Drought affects Argentine cereal planting Growth in Developing countries Strength of the Real Europe: 29.2% of total Prolonged Winter in the North Very Dry weather in the South Single Farm Payment EU Expansion Increase in set-aside rate Reduction in wheat and maize areas Lower agrochemical inventories Africa / Middle East: 3.9% of total Economic and Political uncertainty Infrastructure requirements Growth in specialty crop markets Low cotton prices depressed market World Market in 2005 = $31,190 m., +1.5% on 2004


Slide5: Crop Protection Market Real Growth 1990-2005 EU ‘CAP’ Reform El Nino Freedom to Farm GATT GM Crops Weak Crop Commodity Prices Reduced Support LAM / Asian Economies Weak US glyphosate price fall Improved Crop Prices Drought Recovery in Europe, 5% set-aside LAM Recovery / Soybean Rust in Brazil Excellent Ag year in the USA GM Crop Expansion Weaker Commodity Prices Drought in Brazil / S Europe Energy Prices Brazilian economy -0.5 -3.0 -1.6 -0.5 2.2 4.3 3.7 2.1 0.1 -5.7 -1.0 -6.8 -5.0 -1.6 4.7 -2.5 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Drought in N Europe % Change


Slide6: Crop Protection Market Development


Slide7: Agrochemical Market Outlook – Longer Term Factors


Slide8: GM Crops and Seed


Slide9: Market Development Since 1995 IMI Maize STS Soybean LL Canola RR Canola RR Soybean Bollgard Cotton LL Maize, RR Cotton YieldGard Maize RR/Bollgard Cotton RR Maize RR/YieldGard Maize Herculex I Maize Corn Rootworm Maize Bollgard II Cotton RR/Bollgard II Cotton LL Cotton Widestrike Cotton


Slide10: Total =222.4 million acres (+10.2% over 2004) Canada Canola – 92.3% USA Soybean – 93.2% Maize – 68.1% Cotton – 81.9% Argentina Introduced 1997/8 Soybean – >99% China Introduced 2000 Cotton – 32.0% Proportion of Crops Planted with GM Varieties India Introduced 2002 Cotton – 30.2% Brazil Introduced 2004 Soybean – 21.7%


Slide11: Total Soybean Area 99.30 million acres Roundup Ready Soybean Area 50.8 m. acres Brazil 56.58 m. acres Argentina 34.69 m. acres Paraguay 4.78 m. acres Herbicide Tolerant Soybean – Short Term Prospects Countries denoted in blue grow only limited quantities of soybean


Slide12: GM Maize – Short Term Prospects Total Maize Area 96.8 million acres HT/IR Maize Area 52.3 million acres Total Maize Area 47.9 million acres HT/IR Maize Area 4.3 million acres Brazil 28.3 m. acres Argentina 6.7m. acres USA 74.3 m. acres Mexico 19.8 m. acres Countries denoted in blue grow only limited quantities of maize


Slide13: GM Cotton – Short Term Prospects Total Cotton Area 13.8 million acres HT/IR Cotton Area 11.4 million acres Total Cotton Area 44.6 million acres HT/IR Cotton Area 11.4 million acres China 12.5 m. acres India 22.5 m. acres Australia 0.7 m. acres Countries denoted in blue grow only limited quantities of cotton


Slide14: Crop Protection Industry Structure and R&D Focus


Slide15: Crop Protection Company Market Shares


Slide16: Agrochemical Company Sales 2005 $m.


Slide17: Agrochemical Company Sales Growth (2000 to 2005) % per annum Small to medium sized companies amongst the fastest growing Note : Syngenta not in above as only began trading in late 2000


Slide18: Moves by Major Generic Companies


Slide19: Chemical Crop Protection Seeds / Biotechnology Company Sales and R&D Expenditure 2005 Sales ($m.) R&D ($m.)


Slide20: Product Introductions and R&D Products Introduced 1980-2005 Currently in R&D Bayer 54 7 Syngenta 55 3 BASF 33 6 Dow 29 4 Sumitomo 28 2 DuPont 18 1 Monsanto 3 0 Other Japanese 78 18 Rest 19 7 Total 317 48


Slide21: Leading Company Agrochemical R&D Expenditure 2004 Total Expenditure $ 2250 m. Average Expenditure 7.5% of Sales


Slide22: Seed and Trait Industry Structure and R&D Focus


Slide23: Seed Industry Restructuring 2005/6


Slide24: Seed Sales 2005 $m.


Slide25: Crop Protection Market Development


Slide26: Crop Protection Market Outlook 2006


Slide27: Disclaimers The information contained in this presentation constitutes our best judgement at the time of publication, but is subject to change. Phillips McDougall do not accept any liability for any loss, damage or any other accident arising from the use of the information in this presentation.