What BASF is up to
BASF leaves no doubt about its business on its company logo: BASF -- The Chemical Company.
To further its reach in that market, though, the company is teaming up with seed companies in some cases. We visited about this and other topics with several BASF executives during a media tour last week of its Limburgerhof, Germany headquarters. Developments they told us about included the following.
You've heard a lot about this one in the past year. BASF trademarked this concept, which uses the application of Headline fungicide in the United States on corn and soybeans.
BASF officials say Headline applications have delivered an average yield advantage of 12 to 15 bushels per acre in corn and four to eight bushels per acre on soybeans in the United States. That's due to effects it has on late-season diseases and the plant's physiology, say BASF officials.
Emmanuel Butstraen, group vice president of BASF global strategic marketing agricultural products, expects the concept to continue to grow in U.S. markets.
"In the U.S., farmers have always been keen to capture the innovation aspect," he says. "In Europe, they (farmers) accept innovation, but it takes more time."
BASF officials plan to further Headline's inroads into the U.S. in 2008 via a co-promotional agreement with Monsanto in which each company's sales force will promote Headline in corn and soybean production.
BASF was on the sidelines during the seed and chemical mergers of this decade and the 1990s. This was a time when chemical companies like DuPont purchased seed companies like Pioneer Hi-Bred International, and when Monsanto purchased its seed companies DeKalb and Asgrow.
"I have no regrets about not buying seed companies," says Michael Heinz, president of BASF agricultural products. "At the time, those companies traded at high multiples. We took the money and invested it in research programs."
However, recent developments have included an agreement with Monsanto in which the two companies are cooperating on second- and third-generation seed traits that include yield enhancement, cold and drought tolerance, and nematode resistance. These traits, which will be marketed in seeds through Monsanto, are slated for the U.S. market sometime next decade.
"In the case of nematode resistance, there will be completely new mechanisms using plant biotechnology to protect the plant against nematode attack," says Hans Kanst, head of BASF plant science.
The company is also working on traits outside of those covered in the Monsanto agreement. These second- and third-generation traits include improved nutritional components, such as oilseeds containing heart-healthy Omega-3 oils.
"Today, you only have (Omega-3) compounds available by fish oil or eating cold water fish," says Kanst. "Biotechnology will enable us to produce them in oil crops like canola, linseed, maybe soybeans."
BASF is also working on traits aimed at plants as renewable resources, such as those with certain starch or oil components.