News review 2022 and predictions for 2023

The opening line of our review from last year described 2021 as a year when we almost got back to normal after the pandemic. 2022 could also be described as another year when we almost got back to normal.

The invasion of Ukraine is not only a tragedy for Ukraine but has wider implications for global agribusiness. The significance of Russian and Ukrainian fertilizer exports has contributed to higher fertilizer prices, and subsequent demand destruction in some markets. The World Bank reported that the price of urea in 2022 had surpassed its peak in the financial crisis of 2008. New AG International interviewed a number of agriculture professionals in Ukraine in a special report, here.

According to a Rabobank report, a recovery in fertilizer consumption is possible in some regions in 2023, with fertilizer prices lowering and commodity prices at historically high levels.

We ran comment from leaders in the biological sector about whether this spike in fertilizer prices would benefit biological input producers in 2BMonthly’s State of the Industry. (To subscribe, here)

Foothold for fertilizer companies
First, we return to one of the long-term trends we follow here at New AG International – the entry of fertilizer companies into the biologicals market.

In November 2022, Anuvia Plant Nutrients announced an agreement with Malaysian major Petronas Chemicals Group (PCG) to market and produce Anuvia’s bio-based granular fertilizer in the Asia-Pacific region.

Those familiar with the bulk fertilizer market will more than be aware of Petronas. With a capacity of around 2.5 million tonnes/year of urea, Petronas is a major exporter in the region to local markets such as Thailand, Australia and Philippines.

Indorama and Adfert was another link-up that caught the eye. Like Petronas, Indorama’s main fertilizer activity is in urea production, with production in Nigeria. Indorama has completed the acquisition of Adfert (Adfert Aditivos Industria e Comercio Ltda). Founded in 2009, and based in the Brazilian state of Minas Gerais, Adfert is a pioneer and one of the largest manufacturers of special fertilizer additives and crop nutrition solutions in the Brazilian market. Its products include additives for micronutrients, such as Residex, a micronutrient binding agent developed for urea, which might have been one of the attractions for Indorama.

One biological move that might have slipped unnoticed was Spanish fertilizer producer Grupo Fertiberia acquiring Trichodex, a tech-based company with headquarters in Seville. Trichodex’s products are based on patented bioprocesses, through the selection of microorganisms for producing bioactive components that improve the yield and protection of crops. Founded in 1991, the company markets its products in a dozen countries in Europe and Latin America.

A high-profile acquisition announced in February 2022 was Plant Response acquired by major finished phosphate fertilizer producer The Mosaic Company. Plant Response had recently consolidated Koch Biological Solutions (2019), Pathway BioLogic (2020), and WISErg (2021). Another fertilizer company, Israel’s ICL, signed an agreement with Lavie Bio to develop biostimulant products.

Record deal activity
In October 2022, 2BMonthly reported that the number of mergers, acquisitions, and partnerships in 2022 had already eclipsed the previous high concluded in calendar year 2018. And there were still two months to go. The last weeks of 2022 marked two blockbuster deals. The first was at the end of November with the announcement that Corteva Agriscience was purchasing the Stoller Group for $1.2 billion. The came just nine weeks after Corteva announced it was acquiring Symborg in September. As the commentary in 2BMonthly said: “The two major acquisitions should remove any doubt about Corteva’s plans for its new biologicals business unit, and how highly biologicals rank on the company’s priority list.” The second major deal was announced in December, as Novozymes and Chr. Hansen announced an intended merger.
And a couple more in the biologicals space - FMC Corporation acquired Biophero, and Bioceres Crop Solutions and Marrone Bio agreed a merger.

Irrigation sector
Not to be outdone, the M&A fever also reached the irrigation sector. Rivulis and Jain Irrigation Systems Limited reached an agreement whereby Rivulis would acquire multiple overseas subsidiaries composing the international irrigation business of Jain Irrigation. The merged company is called Rivulis (in alliance with Jain International), to be led by current Rivulis CEO Richard Klapholz, with dual headquarters in Singapore and Israel.

First macro to control pest and disease
Congratulations to Biobest for winning the Bernard Blum Award for the most innovative biocontrol product, at ABIM 2022, which took place in Basel, Switzerland. The award was for a new category of commercial mite Pronematus ubiquitus that concurrently targets a key pest, russet mite, and a problem fungal disease powdery mildew. Felix Wackers, Biobest R&D Director: “Pronemite is representative of a new family of beneficial mites; it’s the first effective biocontrol solution for russet mite control; the first commercialised fungal disease control using a mite; and uniquely the first commercialised biological control organism shown to simultaneously control a key pest and a problem pathogen in a protected crop. As such, it represents a whole new category of biocontrol.”

Controlled release developments
Developments in controlled-release fertilizer is a key topic for New AG International. See our latest e-book here.
In September, Israel’s ICL said it had developed a biodegradable coating technology, called eqo.x , for its controlled-release fertilizer (CRF) product ranges. The technology was designed for open-field agriculture, the company said, and “is the first offering in the market to provide a controlled release fertilizer coating for urea, which biodegrades more rapidly, and was specifically designed to meet future European fertilizer standards set to go into effect in 2026.”
In April, Soilgenic Technologies, LLC announced it had established and patented an enhanced DCD technology that improves below ground loss of nitrogen from leaching and denitrification, called NitroBlock Enhanced DCD.

Vertical news
There was plenty of news regarding vertical farming in 2022, witnessed by Walmart’s investment in Plenty Unlimited Inc., an indoor vertical farming company, as part of their $400 million Series E funding round subject to a regulatory approval.
However, it was a tough year for vertical farms, largely due to the increase in energy costs. Vertical farming has high upfront capital requirements and high running costs for the LEDs. There were some high-profile casualties this year, namely Fifth Season in the USA, Agrocool in France, and Dutch start-up GlowFarms ceased trading when it reportedly failed to secure additional funding.

Predictions for 2023
So, what is in store for 2023? Here, we pick up on some themes from 2022 and combine with other industry analysis.

1) Biodegradable coatings for granules - There has been the announcement mentioned above by ICL. There could be more research and developments on biodegradable coatings for controlled-release fertilizer applications.

2) Fertilizers from recycled products - New AG International has covered several projects looking at using by-products for fertilizer production. For an example, here.

3) Specialty products with green ammonia - Yara and Lantmännen signed a commercial agreement for fertilizers based on green ammonia in January 2022. The small volumes of green ammonia would lend themselves to specialty application.

4) Growing adoption of drone application for biological products - Drone application for biocontrol is increasing, notably in Brazil. 2023 could see the wider adoption in other major markets. For more on technology in Brazil, here, and exclusive interview with PwC, which has acquired a major tech hub.

5) Focus on herbicide biocontrol - The missing piece in the biocontrol armoury is still bioherbicides and this could see further research endeavours in the year ahead. In that direction, FMC Corporation and Micropep Technologies announced a strategic collaboration to co-develop bioherbicide solutions in December 2022.

6) Demerging of fertilizer businesses - And finally, similar to the strategic shifts by Deepak Fertilisers and Petrochemicals Corporation Ltd (DFPCL), here, and earlier in 2022 by Incitec Pivot, there might be more streamlining in the structures of producers that span different sectors. As outlined by DFPCL, the standalone business facilitates the move towards specialty value-add production away from cost-minimisation commodity production.

From a different perspective, New AG International has spoken before about the rise of the bio-commodity fertilizer – the incorporation of biological/nature-based components into conventional fertilizers. 2023 might see some general steps in that direction, but the current economic backdrop suggests more progress in predictions (1), (2) and (5).