What Does The Future Hold?

While the future of agrochemicals looks bright, according to Deloitte’s The Future of Agrochemicals report, considering the rising demand for food spurred by global population growth, companies will have to become more innovative to remain competitive.

Challenges reshaping the industry include longer product development cycles and escalating costs, increasing stringency of regulatory requirements, environmental concerns and the rise of digital technologies, according to the Deloitte report Dr Nicole Hart, chairperson of the Fertiliser Association of Southern Africa and commercial general manager of Omnia Fertiliser, says that the high costs of product development and registration for chemical crop protection make it increasingly difficult for new and smaller players to compete against global giants such as BASF, Bayer, DuPont, Monsanto and Syngenta.

She adds that the quest for environmentally-friendly solutions such as biopesticides, adjuvants, biofertilisers and biostimulants nevertheless presents new opportunities. Entry costs that are lower than for chemical solutions and more stringent regulations that became effective in 2017, combined with increased awareness, make it more difficult for fly-by-nights.

Local players

Despite the market segment being dominated by international players, local players are commanding a substantial market share, especially on the humate and kelp side. Oro Agri, which sells orange-based biocontrol plant products, is one South African company that is breaking ground internationally, currently having more 2 000 dealers selling its products in more than 85 countries.

Hart also sees opportunities for more South African-based developed biological control products such as parasitic and predatory insects, essential oils, viruses and bacteria that may help to keep problem, insects and diseases in check.

Increased competition and the development of precision technology is another factor changing business dynamics for crop protection and fertiliser companies, says Hard. Where companies in the past only focused on products development and sales, more and more are incorporating digital solutions into their services offerings. The use of remote sensing via satellite or drones, for example, is making it easier to identify and address crop stressors, which can be caused by anything from nutrient and water deficiencies to insect attacks and diseases.

Challenging times for local mining 

The cost of mining in South Africa has increased considerably over the past decade, due to diminishing general ore grades, and accessibility to ores becoming more challenging as underground and surface mines get deeper. The fall in the global demand for various mineral commodities in combination with price and currency volatility has exacerbated the situation.

Ralf Hennecke, general manager of technology and marketing at BME, identifies technology and innovation as key drivers of the industry’s future sustainability, with new technologies, automation, and digitalisation promising improved efficiencies, reduced costs, and enhanced safety.

These technologies will become increasingly important as labour becomes more expensive and low-risk mines become exhausted, forcing companies to venture into areas where extraction and processing were previously considered too dangerous or costly. “South Africa cannot afford to fall behind in terms of global best practices, intelligent mining and an industry 4.0 world,” says Hennecke.

Stiff competition

South Africa is not only competing against other global players to deliver ore and commodities competitively to global destinations that are becoming increasingly protective and unstable, but is also competing for foreign direct investment. “South Africa still has much value to offer, significant infrastructure and world-class skills, but we need to build investor confidence by addressing deterrents varying from policy instability and volatile labour relations to political uncertainty, water shortages and load shedding,” says Hennecke.

He adds that the drive for renewable energies to combat climate change will present new opportunities for South Africa as the country contains many strategic commodities and vast resources required for renewable technologies. Simultaneously, pressure is bound to increase for mining companies to reduce their environmental footprint, which would be difficult considering almost 80 per cent of our energy is generated from coal.