Uniled States
Environmental Protection
Agency
Office of
Pesticide Programs
Washington DC 20460
February 1978
Pesticide
SEPA Economic Trends and
Outlook of Pesticide
Industry:
Nfced For "Exclusive Use"
Amendments to FIFRA
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ECONOMIC TRENDS AND OUTLOOK OF
PESTICIDE INDUSTRY:
NEED FOR "EXCLUSIVE USE"
AMENDMENTS TO FIFRA
OFFICE OF PESTICIDE PROGRAMS
U.S. ENVIRONMENTAL PROTECTION AGENCY
FEBRUARY 15, 1978
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ECONOMIC TRENDS AND OUTLOOK OF
PESTICIDE INDUSTRY:
NEED FOR "EXCLUSIVE USE"
AMENDMENTS TO FIFRA
Robert E. Lee II, Ph.D.
And
Arnold L. Aspelin, Ph.D.
Economic Analysis Branch
Criteria & Evaluation Division
Office of Pesticide Programs
U.S. Environmental Protection Agency
February 15, 1978
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ECONOMIC TRENDS AND OUTLOOK OF THE PESTICIDE INDUSTRY
CONTENTS
Page
INTRODUCTION 1
SUMMARY AND CONCLUSIONS 2
U.S. PESTICIDE INDUSTRY PRODUCTION AND SALES 5
Production 5
Sales 5
U.S. AND WORLD PESTICIDE MARKETS 9
Quotations About the Future of the U.S. and World
Pesticide Markets 13
TRENDS IN PROFITS AND SALES OF FIRMS MANUFACTURING PESTICIDES 16
Sales and Profit Ranks 16
Profitability 21
Sales Growth 25
Quotation Relevant to Pesticide Industry Maturity, Prices
and Profitability 26
U.S. PESTICIDE INDUSTRY ENTRANCES AND EXITS 28
PESTICIDE R&D EXPENDITURES 32
Magnitude of Pesticide R&D Expenditures 32
Comparison of R&D Expenditures and Sales 32
Comparison of Registration-Related R&D Expenditures and
total R&D Expenditures 34
Time Required for Pesticide R&D for New Products 41
Quotations about Pesticide Research and Development 42
R&D COMPETITIVE ENVIRONMENT 44
SURVEY OF FINANCIAL/MARKET DATA ON MAJOR PESTICIDE MANUFACTURERS • • • 49
REFERENCES 51
APPENDICES 53
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ECONOMIC TRENDS AND OUTLOOK OF THE PESTICIDE INDUSTRY
INTRODUCTION
Pesticide industry representatives have expressed concern about the
effects of government regulation on the Industry, particularly on incentives
to pursue basic pesticide R&D. During the debate over amendments to
FIFRA in 1971-1972 the National Agricultural Chemicals Association (NACA)
proposed a provision for exclusive use of data (U.S. Senate, 1977). This
provision would have prevented the use of data submitted to EPA by one
registrant to support the later application of another registrant.
This proposal was not adopted in the 1972 amendments, but it has
been proposed again during the current debate on amendments to FIFRA. The
House of Representatives has adopted a modified form of the NACA proposal
and has proposed a 5-year period of exclusive use to be followed by a 5-year
period of compensation for use of data (see Appendix I for House proposed
amendments).
The justification for the exclusive use proposal has been that EPA's
practice (prior to 1972) of utilizing all data in its files to process an
application was causing pesticide companies to abandon their R&D programs.
This argument implies that, without an exclusive use provision acting as a
barrier to entry to other firms, companies conducting pesticide R&D did not
have the opportunity to recover their R&D expenses and make acceptable profits
on their new products.
-------
This report provides an economic evaluation of pesticide Industry
trends and outlook, and Its need for excluslve-use-of-data privileges under
FIFRA. Data on pesticide production, sales, profitability, Industry entrances
and exits, and R&D expenditures have been utilized in the analysis.
SUMMARY AND CONCLUSIONS
The pesticide industry is an economically dynamic and growing one, with
growth predicted to continue for the forseeable future. Pesticide manufac-
turers are generally part of larger chemical corporations, which have
collectively enjoyed higher profits over the past five years than the
average industry. Value of sales has increased fourfold during the past
decade and Is forecast to continue rising in the future.
In addition, expenditures on pesticide research and development have
been rising at a faster rate than in U.S. industry generally, pesticide firms
continue to expand their production capacity, and the pesticide Industry is
still attracting firms to the industry. Consequently, It is apparent that
the industry does not need special market protection from Congress.
The argument for needing an exclusive-use-of-data provision in FIFRA
Is not persuasive. It ignores the fact that other forms of protection, e.g.,
patent protection, exist to give a company introducing a new product to the
market fair chance to recover its investment cost without threat of competition.
Thus, contrary to implication, exclusive use is not the only competitive pro-
tection available to a company. Rather, it is a supplementary barrier to
•ntry which extends protection past the patent period or provides protection
to products which don't have patent protection.
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In addition, the implied negative effects on the pesticide industry
are contradicted by the industry's recent history and projections for the
future. Between 1967 and 1971, pesticide industry R&D expenditures increased
by approximatley 35 million dollars (from 52.4 million dollars in 1967 to
87.7 million dollars in 1971) (NACA, 1970, 1975). Between 1971 and 1976,
pesticide R&D expenditures continued to increase, by 107.5 million dollars
(from 87.7 million dollars in 1971 to 195.2 million dollars in 1976) (NACA,
1975, 1976). Consequently, an exclusive-use-of-data provision in FIFRA
was not needed in 1972 and is not needed today.
> Furthermore, not only does the industry not need an exclusive-use provision,
but industry competition and economic performance would be adversely affected
by exclusive use or related provisions if added to FIFRA.
The major conclusions and more detailed findings are presented in the
tabular summary on the following page.
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¦comae Turns and outlook or thz nsrxcan nanism
•omurt or rnroiscs
INK rUTICIDC MMJ8TIY IS A CIOIOIC DVHAMIC OMI.
U.S. rtoductloni - Upward triad during laat decade
- Future growth projactad (6-SX/yr.)
galeei - U.S. annual aalaa traadad upward during laat daeada (aae-thlrd higher la 1970'a
than lata I960'a)
- lack world aad U.S. aarkata ara aerant with tha foraer to experience faatar growth
rata (24 percent, MM-W)
• Growth la daaaatle aalaa dua largely ce axlaelng aarkata, rathar thaa saw
aarket aegaeata, (e.g., pre-1—rganca harbtctdaa).
- Supply/deaand balaaea haa been quita eatlefaetory daaplta yeer-to-yeer varlatlaoa la
daaaad, energy crlala, ate.
Markat growth (avara economically healthy laduatry, capable of aeetlag aalatjr rigaUiaiata,
UO coat*, ate.
m rnnewe pnoooctxon imim is icohokkallt nam.
Profltet - Peetlcideo production la generelly a high profit bualneaa coaparad ta athar laduatrlaa.
- Major firaa hava generally goad profit raeard tinea 1972.
laduatry turn-overs - Ho trand toward aat exit or entry of firaa ta paatlclda praductioa (2 ar ) pareaat tara-
ever par year).
- M*J«r «hwa of producing lnduatry la eoneantratad aaong relatively faw large firaa (e.g., 1
firaa account for <3 pareaat af aalaa).
- Hgk 1avala of eaaaaatratlon at aarkat and aubaarkae lavele, l.a., oligopoly.
MDi - laale UO taada to ba concentrated aaong relatively faw firaa (e.g., 7 firaa ectoaat Car MM
af total MO).
- UO la paatleldaa la not treading downward aad la a highar percent of aalaa thaa athar a.f.
laduatrlaa (e.g.. about twice tha percent of ealaa of laduatry generally).
• UO ta (hitting toward expanded uaa af ezletlag ehaalaala, rathar thaa aeva epeealatlve
aaw chenlcala.
smcul Mum romcrtON rot nsnctss rtoouens xs wot jwtitieo on iconomic amines.
SmUUsa> - laduatry la highly concentrated aad eaapetleion would ba further reduced by "aaalaalva aee"
provlelone If addad to nnu.
MP Caetat . beluaiva aaa provlalon would add to lnduatry UD coat*, dua ta dupllcatlaa af effart aaaag
firaa.
weald experience advaree acoaoalc affecta la fata of higher prlceat raatrletad
auppllea and/or aora Halted choice af paatleldaa.
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U.S. PESTICIDE INDUSTRY PRODUCTION AND SALES
Production
U.S. production of synthetic organic pesticides has increased markedly
during the past decade (see Figure 1 and Table 1). Industry growth has
occurred quite steadily although there were peaks in production in 1968 and
1975. Pesticide production is expected to resume its upward growth with
long term forecasts at 6-8% per year (Farm Chemicals, Feb. 1977). The
U.S. pesticide producing industry is a growth industry based on the past
record, and is expected to be in the future as well.
Sales
The long term trend of growth in the pesticide industry is reflected in
sales value and volume as well as production. U.S. sales value of synthetic
organic pesticides has increased annually without exception during the past
decade (see Figure 1 and Table 1). Sales volume has increased quite steadily
during the same time period. Sales volume has averaged about 1.2 billion
pounds per year since 1970, about 300 million pounds higher than during
preceeding years. The pesticide industry is a dynamic one, adjusting to
market demand for pesticides which varies considerably from year-to-year
depending upon such factors as crop plantings, weather, pest infestations,
and crop prices. For example, according to Robert Ouellete and John King,
1975 sales of pesticides were off primarily because cotton acreage declined
about 30 percent, corn acreage did not increase, and wheat and soybean acreage
increased only minimally from 1974 to 1975 (Ouellette and King, 1976). In
addition, pesticide prices increased sharply and 1975 was a dry year in the
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FICUKE 1
U.S. Pesticide Production, Sales Volume^ and Sales Value, 1966-1976
Billion Pounds
Billion !)ol lars
2.0
SALES VALUE
1.6
U.S PRODUCTION VOLUME
SALES VOLUME
1.2
1.0
1966
1968
1970
1972
1974
1976
— U.S. and Export; synthetic organic pesticides only.
SOURCE: International Trade Commission, "Synthetic Organic Chemicals, United States Production and Sales."
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Table 1
Synthetic Organic Pesticides: U.S. Production and Sales^, 1966-1976
Year Production Volume Sales Quantity Sales Value
(billions of lbs) (billions of lbs) (billions of dollars)
1966
1.013
.882
.584
1967
1.050
.897
.787
1968
1.192
.960
.849
1969
1.104
.929
.851
1970
1.034
.881
.870
1971
1.136
.946
.979
1972
1.158
1.022
1.092
1973
1.289
1.199
1.344
1974
1.417
1.365
1.815
1975
1.603
1.328
2.366
1976
1.364
1.193
2.410
1/ Domestic and export; includes a small quantity of soil conditioners.
Source: U.S. International Trade Commission, "Synthetic Organic
Chemicals, United States Production and Sales," various years
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major agricultural regions of the U.S., thus reducing pest problems and,
consequently, pesticide usage. In 1976, sales volume of pesticides was
down slightly as the very dry conditions continued (CRB/USDA, 1977).
USDA pesticide market studies covering the years 1974 through 1977
indicate that pesticide supplies have generally grown in relation to needs
for agricultural use of pesticides (which accounts for about two-thirds of
the United States pesticide usage) (ERS/USDA, July 1975, April 1976, and
February 1977).
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U.S. AND WORLD PESTICIDE MARKETS
The world market for pesticides is growing, as is the U.S. market, but
at a faster rate according to available information. Farm Chemicals predicts
U.S. pesticide sales of 2.7 billion dollars in 1980 and 3.3 billion dollars
in 1984, an increase of 19% during the five-year period (see Figure 2 and
Table 2) (Farm Chemicals, Sept. 1977). During the same time period, the
publication predicts a 24 percent increase in world sales, from 8.1 billion
dollars in 1980 to 10.0 billion dollars in 1984 (see Figure 2 and Table 2).
These rates of growth have slowed somewhat from earlier in the 1970's, but
are still substantial. They reflect the maturing of the pesticides market,
especially in the U.S. and other developed countries where most acreage
and livestock which would benefit from pesticide application have already come
under treatment. They also reflect the fact that the base upon which the rate
of growth is calculated has become considerably larger. For example, the
projected two billion dollar increase from 1980 to 1984 in the world pesticide
market would represent more than a 55 percent increase over the 1971 base of
3.6 billion dollars.
The fastest growing market is in Africa, with sales projected to increase
by 182 percent between 1980 and 1984 (see Table 3). Other fast growing
markets are Central and South America (32 percent), Asia and the Far East
(28 percent), and the Middle East (26 percent).
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FIGURE 2
1/
U.S. and World Pesticide Markets, 1971-1984—
User's Level (1977 Price Level)
$ Billion
10
~
WORLD
U.S.
I
|
§§1
1971
1974
1980
1984
^ 1980 and 1984 estimated in source article
SOURCE: "World Pesticide Markets," Farm Chemicals, September 1975;
"A Look at World Pesticide Markets," Farm Chemicals, September 1977
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Table 2
U.S. and World Pesticide Markets, 1971-1984—^
User's Level
Year United States Market World Market
$ billion % Change $ billion % Change
1971
1.4
—
3.6
—
1974
2.1
49
6.3
77
1980
2.7—
28
8.1-'
27
1984
3.3r^
19
10.0^
24
1/ 1977 price level
2/ Estimated by Farm Chemicals.
Source: 1971 and 1974: "World Pesticide Markets", Farm Chemicals, September 1975,
p. 45; adjusted to 1977 price level by EPA.
1980 and 1984: "A Look at World Pesticide Markets," Farm Chemicals,
September 1977, p. 38.
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Table 3
World Pesticide Market Growth, 1974-1984
User's Level
Projected In-
$ Million crease from
Area
1974
1980
1984
1980-1984
(X)
Western Europe & British Isles
1301
1728
1946
13
Eastern Europe Including USSR
527
815
921
13
Middle East (Egypt, Syria,
Greece, Turkey, Israel,
Lebanon, Sudan)
150
305
386
26
Africa
92
210
593
182
Asia (Irani, Pakistan, Afghanistan,
India)
157
244
313
28
Far East including People's
Republic of China
480
969
1245
28
Australasia
96
145
174
20
Central & South America
410
825
1092
32
North America
1977
2812
3291
17
TOTAL
5138
8053
9961
24
Source: "A Look at World Pesticide Markets,
1977, p. 42.
" Farm Chemicals,
September
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Quotations about the Future of the U.S.
and World Pesticide Markets
The following two pages contain quotations about the future of the U.S.
and world pesticide markets from trade publications and government reports.
These quotations indicate that growth is projected for both the U.S. and
world pesticide markets.
According to experts in industry and government, the world pesticide
market is expected to grow faster than the U.S. market. There are still
many parts of the world, most notably Africa, where pesticides are used
on only a small proportion of acreage and livestock.
The expanding market for pesticides at the U.S. and world levels favors
a healthy and growing industry, both in the U.S. and abroad. Foreign-based
U.S. pesticide producers will benefit, as well as U.S.-based producer/
exporters. An expanding market is much more favorable for meeting increasing
R&D costs and environmental safety requirements than would be the case in a
stable or declining industry.
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Quotation! about the Future of the U.S. Pesclcide Market
Source
Remarks
Source
Remark*
Ouelecte & King,
Chemical Week.
June 2], 1976, p.
29
Farm Chemicals.
Feb. 1977, p. 22
Agricultural Outlook.
Oct. 1977, p. 9
AtrlcluCural Outlook..
Sac. 1977, p. 10
HtS/USDA, Evaluation
of Pesticide Supplies
and Demand for 1977.
AER Ho. 366, Feb. 1977,
p. Vt
"Increases In the domestic use of pesticides
are not likely to match those of past years
because a high percentage of crop acreage is
already being treated and there is not enough
uncreated acreage left to sustain earlier
growth races. In addlclon, pest control costs
will continue to climb, partly as a result of
pesticide price Increases caused by the rising
coats of development, registration and pro-
duction."
"In his luncheon talk about the future of the
pesticide industry, Cordon L. Berg, editor of
Farm Chemicals, pointed to Che large invest-
oencs by foreign companies in the domestic
market and savaral new U.S. products recently
lntrpduced." (See "Pesticide Roundup", Farm
Chemicals. Jan. 1977, pp. 39-66 for discussion
of new products and new label clearances in
1977 for 47 companies.)
" 'The action in the U.S. Market alone is
fancastlc,' he said." "U.S. consumption of
pesticides has been increasing at the race of
91 per year. There's no quesclon chat
pesticide* have emerged as a large, sophisti-
cated chemical Industry."
"Pesticide supplies should again be ample
for the 1978 season."
"Demand for herbicides, which has been In-
creasing rapidly in the last 15 or 20 years,
la expected to level off as oast major crap
markets are saturated. Changes In fucure
demand will be largely a function of acres
grown."
"Rapid addition to capacley over the past
several years should permit ample production
of nearly all types of pesticide materials
In 1978."
"Demand ... Is expected to ease next year,
largely because of set-aside programs. In
particular, the sec-aside program for feed
grain* could reduce the demand for herbicides.
"USDA projections for the United States frr 1974
chrough 1985 Indicate little change in Insecti-
cide and fungicide use and an annual Increase of
J to 6 percent In herbicide use. These projec-
tions assume greater use of reduced-tillage and
peat-aanagemene practices, Increased pest
resistance, and greater use of pesticide com-
binations, particularly for herbicides."
Farm Chemicals.
Feb. 1977, p. 22
Ouallette & King,
Chemical Week.
June 23, 1976, p.
Farm Chemicals.
Jan. 1977, p. 50
28
ERS/USDA, Evaluation
of Pesticide Supplies
and Demand for 1974.
1975. and 1976. AEft
No. 300, July 1973,
p. vl
ERS/USDA. Evaluation
of Pesticide Supplies
and Demand for 1976,
AEX No. 332, p. 13
The consensus of attendees to the Pesticide
Industry Seminar on January 13, 1977, in New
York City was summed up as follows: "In
spite of Che problem of meeting new testing
requirement* for pesticides in current use
and increased R&D costs for development of
nev chemicals, the U.S. pesticide market will
continue to grow in the future."
Aria P. Chrlstodoulu, Vice President of Blyth
Eastman Dillon broksrag* firm, "forecast a
long-term growth [In Che pesclclde industry)
of 6-8X per year . . . . "
"The Improved outlook should also be reflected
in plant construction. Last year 49 plants
were under construction or being expanded."
"During the past year, Flsons U.K. has under-
taken several significant programs designed
to enhance the company's stature in Che
agrochemicel field, boch in the U.S. and
abroad. In lata 1975, Flsons announced Che
purchaae of a 433-acre sice in Muskegon, MI,
where It 1* now engaged in its flrsc phase
of * multinllllon dollar manufacturing
developmental building program. The Initial
phase Involves the construction of a $6.5
million plant for the production of Fleam
W . . . ."
"Additional manufacturing plants scheduled
to be built on the Muskegon site include a
elte for formulation of Hortron, a sugar
beet herbicide."
"As part of Its I'.S. buildup, Flsons has
also purchaaed a 300-acre farm in the lower
Rio Grende Valley in Texas. The farm will
be used for testing of potential agricultural
chemicals produced by Flsons research and
development facility In Che United Kingdom.
Development work directed at the U.S. market
will also be undertaken."
"Substantial expansion of production capacity
is currently planned or underway. Twenty-one
of 29 firms have reported they were expanding
or planning capacity expanalone of production
facllltlee . . . ."
"Increases in peetlcida use similar co Chose in
the last 10 years are not likely. Peer control
costs are expected to continue to rise, but more
gradually. The high percentage of crop acreage
Created implies that there Is not enough un-
treated acreage left to sustain earlier growth
rates. However, eome growth is anticipated as
nsw products are Introduced to supplement
existing products or to provide peat control noc
now being achieved."
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Quotations about the Future of the World Pesticide Market*
Source
Remark*
Source
Remarks
Farm Chemicals.
Sept. 1977, p. 38
Stanford Research
Institute, New
Innovative Pesticides:
An Evaluation of
Incentives and Disin-
centives for Commercial
Development bv Industry,
prepared for OPP, EPA,
Hay 1977, p. 1
"The [pesticide] Industry's leading International
marketers . . . peg the world market at $8 billion
by 1980, climbing to $9.9 billion by 1984, a
projected growth of 24X over the five years."
"The companies participating . . . predict
greatest growth In sales will come in Africa,
followed by Central and South America and the
Middle Ease." "They see registration require-
ments and government controls on pesticide use
In both developed and developing countries as the
¦oat limiting factor, followed by rising research
and development costs, and Inadequate exchange
financing or credit." "The projections given
here , . , leave little question that pesticides
will continue to be a growth Industry."
"Over Che next cen years the flow of products
froo the chemical industry for [pest control]
uses will continue, although there may be tem-
porary shortages of some chemicals in certain
functional or regional markets .... It is
also possible that a serious constriction in
the supply of selecced existing efficacious
products will result from EPA cancellations or
restrictions. However, the chemical pesticide
industry has been healthy and profitable, and
many major companies In the United States and
abroad are maintaining or increasing their
Investments in R&D and new plants, and are
expected to continue their efforts to commer-
cially develop new chemical pesticides that
an commensurate with stabilized environmental
guidelines."
Chemistry in the
Economy, American
Chemical Society,
1973, p. 241
Farm Chemicals.
Feb. 1977, p. 22
Goring, "Prospects,
Problems for the
Pesticide Manufacturer",
Farm Chemicals.
Jan. 1976
ERS/USDA, Evaluation
of Pesticide Supplies
and Demand for 1977,
A£R No. 366, Feb. 1977,
pp. 10-11
"The world market for pesticides is still
expanding profitably but Is growing steadily
more competitive."
Richard Llndstadt, Director of Market
Research for Elanco Products Co., said, "The
general level of world agriculture Is on an
upward trend with a growing sophistication
of pesticide activity abroad. At the noment
we can outproduce the demand for herbicides,
but ue will need additional capacity over
the coming years."
"The use of pesticides should Increase more
than the three-fold growth projected for
[world] food production." "The United States,
Japan, and Western Europe spend considerably
more per acre for pesticides than the rest of
the world. Expenditures in other countries
for pestlcldee are therefore expected to in-
crease at a greater rate than Increases in
agricultural productivity. Existing trends
In sales suggest a two-fold increase by the
mid-1980's and as much as a five-fold growth
vlthin two to three decades."
"Although the pesticide growth rate for the
next several years in the developing nations is
projected at twice that for the developed
nations, the latter are still expected to ac-
count for over 70 percent of world pesticide
use by 1980."
"Often insects and plant diseases [In develop-
ing nations] almost completely destroy many of
their crops. Tor example, one disease (black
pod) was reported to have destroyed up to 90
percent of Nigeria's cocoa crop. Further,
40 percent of Asia's rice crop and an estimated
third of Latin America's total crop potential
Is lost to insects, diseases and weeds each
year. Thus, In most of the developing nations,
the benefits of increased pesticide use will ,
probably exceed the risks for some tine to come."
"The developing nations rely moetly on the
developed nations for their pesticides. FAO
estimates Indicated that slightly over half of
the pesticides used In the developing nations
vere Imported In the early seventies. This
share was expected to Increase to about 60 per-
cent by the late seventies becauae of greater
use of sore complex pesticide chemicals."
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TRENDS IN PROFITS AND SALES OF FIRMS MANUFACTURING PESTICIDES
Profits in the chemical industry specifically relating to pesticide
operations are not well reported because most major firms do not report
profits separately for their pesticides operations. Profits are high due
to "strong patent protection, competition based on price with heavy emphasis
on R&D, significant barriers to new entrants, concentration of sales among
a few dominant manufacturers and market segmentation into many submarkets",
according to one study specifically on the pesticide industry (Wm. Blair
and Company Report, July 7, 1975). This study characterized the industry
as one with "extraordinary profitability", in which "the most important
determinant of marketing success is the R&D capability of a firm". Price
elasticity of demand was found to be inelastic, which means that prices can
be raised without equally proportional reductions in sales, (e.g., generally
speaking, a price increase would increase profits).
Presented in this section is an analysis of recent data on profits and
sales of pesticide firms. The primary data are those presented in the annual
Fortune 500 Series (1972-76) and recent data published by Forbes magazine.
Sales and Profit Ranks
Review of sales and profit data reported in the Fortune 500 Series
indicates that: (1.) pesticide firms rank in the top one-third of the 500 firms
covered in the series, on an average-rank basis; and (2.) the rankings have
remained quite stable since 1972.
In 1972, when FEPCA became law, 39 manufacturers of pesticides were
included in the list of the 500 largest manufacturing firms in the U.S.
published by Fortune magazine (see Table 4) (Fortune, May 1973). By 19.76,
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Table 4
Sales and Profit Ranks of Pesticide Manufacturers^ in
Fortune Top 500 Industrials, 1972 and 1976
Company
Industrial
Class-
Sales
1972
Rank
1976
Profit
1972
Rank
1976
Mobil
Petroleum Refining
7
5
6
5
Gulf Oil
Petroleum Refining
11
7
24
10
Shell Oil
Petroleum Refining
17
13
15
11
E.I. DuPont
Chemicals
16
16
11
17
Tenneco
Petroleum Refining
26
20
22
23
Union Carbide
Chemicals
27
21
21
18
Phillips Petroleum
Petroleum Refining
36
24
35
20
Dow Chemical
Chemicals
41
25
28
13
Monsanto
Chemicals
46
42
46
25
Ashland Oil
Petroleum Refining
70
43
87
74
3M
Scientific Equipment
51
53
17
29
CPC International
Food
82
79
59
86
Allied Chemical
Chemicals
89
82
93
95
Warner Lambert
Pharmaceuticals
92
93
45
57
Uniroyal
Rubber Products
69
95
135
369
FMC
Industrial Equipment
91
97
129
141
PPG
Chemicals
104
100
64
64
American Cyanamid
Chemicals
106
107
52
75
Kerr-McGee
Petroleum Refining
202
114
122
79
Pfizer
Pharmaceuticals
130
118
53
56
Merck & Co.
Pharmaceuticals
147
132
36
36
Hercules
Chemicals
153
142
81
102
Olin
Chemicals
114
164
488
156
Diamond Shamrock
Chemicals
219
167
183
71
Eli Lilly
Pharmaceuticals
172
171
41
44
International
Minerals &
Chemicals
Chemicals
265
181
249
77
-------
Table 4 (cont.)
Sales and Profit Ranks of Pesticide Manufacturers^ in
Fortune Top 500 Industrials, 1972 and 1976
Company
Industrial
Class-
Sales Rank
1972
1976
Profit Rank
1972
1976
00
I
Martin Marietta
Rohm & Haas
Stauffer
Abbot Laboratories
GAF
Universal Oil Prdt.
Upjohn
Pennwalt
Mor ton-Norwich
Reichhold Chemical
Hitco Chemical
Kewanee _,
Industries-
Vulcan Materials
Nalco Chemical
Ferro
Aerospace
Chemicals
Chemicals
Pharmaceuticals
Scientific Equipment
Petroleum Products
Pharmaceuticals
Chemicals
Chemicals
Chemicals
Chemicals
Chemicals
Mining
Chemicals
Chemicals
NUMBER OF FIRMS
134
218
247
251
181
269
258
286
324
480
390
425
497
39
189
195
204
209
216
220
272
318
325
336
411
427
447
451
40
116
138
182
159
204
342
137
303
222
402
353
287
344
143
486
97
123
377
144
280
484
401
345
278
270
240
373
1/ Pesticide Manufacturers are those which either appear, or that have subsidiaries that appear in the
1976 International Trade Commission report, Pesticides and Related Products.
2/ As indicated by Fortune, that area which represents the greatest value of industrial sales.
Source: Fortune, "The 500 Largest Industrial Corporations," May 1973.
Fortune, "Fortune's Directory of the 500 Largest U.S. Industrial Corporations," May 1977.
-------
the number of pesticide manufacturers included on the list had increased
by one, to forty.
The average sales rank of these firms was 163 in 1972 and a slightly
higher 154 in 1976 (see Table 5). The average rank by profit was somewhat
lower (137 in 1972 and 145 in 1976) (see Table 5).
Based on sales, 30 of the 39 pesticide firms increased their rank in the
Fortune 500 list between 1972 and 1976, while eight ranked lower and one firm
maintained the same rank (see Table 5).
Rankings remained about the same on the basis of profits. Twenty firms
were ranked higher in 1976, 19 firms were ranked lower, and two firms remained
at the same rank (see Table 5).
According to these data, almost 10 percent of the 500 largest manufac-
turing firms in the U.S. produce pesticides and this percentage has not
changed since the implementation of FEPCA in 1972.
Leading pesticide manufacturers are among the largest industrial
corporations in the U.S., and generally have fared well compared with
other corporations on basis of sales and profits since 1972. Also, there is
the following tendancy: the larger the firm, the better the record, e.g., none
of the top 10 in sales in 1972 had a decline in sales rank between 1972 and
1976 (eight of them had increasing rank on basis of profits).
-19-
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Table 5
Changes in Sales and Profit Ranks of Pesticide Manufacturers
Appearing in Fortune
List of 500 Largest U.S. Manufacturers, 1972-1976
Sales Profit
No. pesticide firms changing rank
from 1972 to 1976
40
39
Pesticide firms ranked higher in 1976:
No.
30
20
%
75
51
Pesticide firms ranked lower in 1976:
No.
10
19
%
25
49
No. pesticide firms ranked same in 1976
1
2
Average rank - 1972
163
137
- 1976
154
145
SOURCE: EPA calculations based on data from Fortune, May 1973 and May 1977.
-20-
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Pre- r itability
Most of the large firms producing pesticides are multi-product firms.
When categorized by the product line which produces the largest volume of
sales, 49 percent of the pestle'-le producers on Fortune's list are classed
in the chemical industry, 20 percent in the petroleum refining Industry,
15 percent in the pharmaceutical.industry, and 17 percent distributed about
evenly among the scientific equipment, aerospace, food, rubber products,
Industrial equipment, and mining industries (see Table 4 for classification
of firms).
It is likely that the profitability of pesticide manufacturing Is slightly
higher than for chemical manufacturing in general. Averaged over the last
five years, the pesticide manufacturers on the Fortune 500 list had an
average return on equity of 16.2 percent (see Table 6), compared to 15.6
percent for the chemical industry
-------
Table 6
y,ost Recent 5-Year Average Profitability and Sales Growth of
Pesticide Manufacturers in Fortune Top 500 Industrials, 1976
Profitability
Company Return on Return on
Equity Total Capital Sales Growth
(%)
(%)
(%)
Mobil
*
14.6
12.0
22.7
Gulf Oil
14.0
11.5
19.7
Shell Oil
15.7
11.9
16.7
E.I. DuPont
12.8
10.7
11.8
Tenneco
17.5
8.7
16.5
Union Carbide
16.7
12.0
13.5
Phillips Petroleum
16.5
12.4
16.9
Dow Chemical
27.2
16.5
20.3
Monsanto
18.3
13.4
13.2
Ashland Oil
20.3
11.6
19.1
3M
19.0
16.8
13.1
CPC International
17.4
13.7
13.3
Allied Chemical
12,9
8.9
11.8
Warner Lambert
16.1
13.7
13.5
Uniroyal
6.2
4.7
7.4
FMC
12.9
9.4
8.5
PPG
13.2
9.8
10.7
American Cyanaraid
14.1
11.3
10.1
Kerr-McGee
16.6
13.4
24.3
Pfizer
17.4
13.5
13.5
Merck & Co.
28.1
25.9
14.2
Hercules
12.4
10.2
12.9
Olin
11.3
9.5
10.7
Diamond Shamrocl-.
24.9
14.2
14.7
Eli Lilly
22.3
21.5
14.2
International1
Minerals &
Chemicals
28.4
16.8
16.0
Martin Marietta
13.0
8.7
5.4
Rohm & Haas
6.7
6.4
15.5
Stauffer
20.6
14.6
13.7
Abbot Laboratories
18.6
13.8
16.0
GAP
4.6
4.0
8.3
Universal Oil Prdt.
7.2
5.1
8.7
Upjohn
18.5
15.4
16.8
Pennwalt
12.3
9.1
10.7
-22-
-------
Table 6 (cont.)
Most Recent 5-Year Average Profitability and Sales Growth of
Pesticide Manufacturers in Fortune Top 500 Industrials in 1976
,Company
Profitability
Return on
Equity
Return on
Total Capital
Sales Growth
Morton-Norwich 8.5
Reichhold Chemical 14.5
Witco Chemical 16.1
Kewanee , ,
Industries-
Vulcan Materials 19.9
Nalco Chemical 24.7
Ferro 15.5
6.8
10.5
10.1
14.1
23.7
13.5
10.3
21.1
16.2
11.9
14.2
16.2
Range
High
Low
Median
Mean
28.4
4.6
16.1
16.2
25.9
4.0
12.0
12.2
24.3
5.4
13.7
13.6
If Profitability and sales growth not available in Forbes.
Source: Companies selected from Fortune, May 1977.
Profitability and Sales Growth from Forbes, January 9, 1978.
Ranges, Medians and Means calculated by EPA.
-23-
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Table 7
How the Chemical Industry Compares to Other Industries on
Profitability and Growth, 1973-Present
Profitability
Return on Equity
5-yri/
aveRank
(%)
Return on Capital
5-yr.
ave. Rank
(%)
Growth
Sales
5-yr.
ave. Rank
(%)
Earnings/Share
5-yr.
ave. Rank
(%)
Chemical
15.6
10.8
10
13.6 8
18.0
30-Industry
Median
12.9
9.7
12.4
10.1
Highest
Industry
18.8
14.0
22.5
25.4
Lowest
Industry
7.9
30
4.3
30
6.6 30
2.8
30
If 1973 through 1976 plus 12-month period ending with most recent quarterly report.
Source: "Who's Where in the Industry Groups," Forbes, January 9, 1978, pp. 170-176.
-------
Sales Growth
Forbes magazine also provides information about five-year average growth
in sales (Forbes, "Who's Where . . . 1978). Both the pesticide firms
listed by Fortune (Table 6) and the chemical industry (Table 7) grew in sales
by an average of 13.6 percent per year during the past five years. This
performance ranked the chemical industry eighth of 30 industries, slightly
above the 30-industry median sales growth rate of 12.4 percent (see Table 7).
-25-
-------
Quotations Relevant to Pesticide Industry
Maturity, Prices and Profitability
Quotations about the maturing of the pesticide industry and its effect
on prices and profitability are contained on the following page.
In summary, the major markets for pesticides in the U.S. have been
identified, products developed and demands reasonably well satisfied. In
the future, growth will depend more upon expansion of existing markets than
upon development of new markets, e.g., spectacular growth of pre-emergence
herbicides market during 1970's. However, as discussed above, the outlook for
the pesticide industry is one of growth in sales and favorable prospects for
profitable operations compared to other industries.
-26-
-------
quotation* Relevant to Pesticide Industry Maturity, Prices and Profitability
Soure*
Remarks
Sourea
Remarks
Saahuian, "The Economic
Heslth of cha Faselelda
Industry", Jea. 1978
Firm Chemicals.
Fab. 1977, p. 22
Forbes. Jan. 1, 1970,
p. 90
"The (pasclclda] market Is also maturing. There
ars a number of produces available for each crop;
nearly all the major needa have bean satisfied
reasonably veil. The probability of a basic
manufacturer discovering a lower cose and/or
¦ore affective products appears to be rather
small."
"Aris ?. Chriscodoulu, vice-president of Blych
Eastman Dillon brokerage firm, presented a
picture of significant ternlngs on a per-share
basis from agricultural chemicals vs. other
chemical buslnasa among leading companies.".
Ia discussing the declining profits in the fer-
tilizer Industry back In Che lace 1960's,
J. PeCer Craee stated, "As a result of the long-
term and consistent grovth In demand for ferti-
liser materials, averaging 8.6Z per year for the
laic decade, new Investment vaa actracted In
unpracendented amounts, producing capacity far
In excess of any current demand. The result was
a severe price deterioration in 1968."
"IMC plunged $21 million Into the red, and Craee
suffered a decline in fertilizer profits of
nearly 70Z."
Nobel, td., Sllne Culdg
eo the Chemical
Industry. 197i,
p. 142-3
Forbes. Jan. 9, 1978,
p. 191
Forbes. Jan. 1, 1970,
p. 90
Forbes, Jan. 1, 1970,
p. 91
"Prices and proflcs are quite variable In
pesticides depending upon the proprietary
positions obtained by the producers."
"Prices of (chose patented pesticides ¦-•hith
don't have competition from other products)
can be maintained along with reasonably
good proflcs."
"Many of the older produces, however, . . .
do noc have the procecclon of parents and
have degeneraced to Che state ot cormodlcies.
"Competition between similar products chus
forces prices and profits down."
"Like people, companies often burst Into
prominence In their youch, show signs.of
macuricy, chen lapse into decline and decay.
In discussing the maturing of the chemical
industry, the following scacenenc was vriccsn,
"Thus, chough chealcal sales continue Co jrov
very nearly as rapidly as ever, che induscry
no longer hes anything like che profit
potanclal le once had . . . ."
"Traditionally, Che Industry's greac screngch
has lain In tcs aollicy co produce a dizzying
succession of new produces, ca =ove on inco
another new markec jusc as les previous one
begins Co sacure, Co keep its growth crendlng
uninterruptedly upwards. The industry's
massive research outlays . . . have sade such
a record possible, but research has noc come
up with a major nev product in some years, and
Chare Is at least a posaibllity that chemical
research la nearlng che point of diainiihing
returns."
"Says Stauffer's, director of research, Donald
Maselck, What we need Is a big nev Innovation -
something chat will do for us vhac che cran-
sistor did with the vacuum tube. This does not
mean that the induscry's technical resources
are exhausted, or that there Is noc a great desl
af mileage eo be gained from refining existing
products .... But It probably does mean
Chae - without such a discovery - che Induscry
will bs hard puc co malnealn che spectacular
grovth of che Last two decades."
-27-
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U.S. PESTICIDE INDUSTRY /"jjNTRANCES AND EXITS
There has been no significant trend toward net entry or exit of firms
in the pesticide industry since FIFRA was amended in 1972, based on firms
reporting production and sales of pesticides and related products to the
U.S. International Trade Commission. During the period 1972 through 1976,
the number of entrances was twelve (12), compared with nine (9) exits (aside
from five instances where firms both entered or exited or vice versa during
this period) (see Table 8). A total of 96 firms reported during the five
year period, giving average rates of entry and exit (turnover) of 2 to 3
percent per year, with little tendency for net change (see Appendix II).
The ITC report series, is thought to be quite representative of the
industry. It accounts for 90 percent or more of U.S. production and sales of
pesticides and related products. Most major basic pesticide producing firms
report consistently to ITC, whereas minor producers and firms involved largely
in formulation/marketing may report less consistently. Reporting by the
latter groups may cause year-to-year variations in the number of firms reporting
which are of little significance. The tabulation of firms reporting to ITC is
considered by EPA to be indicative of trends in the pesticide producing
industry, although data on individual firms may not be a clear indication of
"entry" or "exit" during a given year.
Another way of looking at entries to the pesticides industry is the
number of firms becoming newly registered as pesticide manufacturers.
According to EPA Registration Division records, 1,879 firms were first registered
as pesticide manufacturers between 1972 and 1977 (see Table 9). This is an
average of over 300 firms per year.
-28-
-------
Table 8
SUMMARY OF PESTICIDE ADD RELATED INDUSTRY ENTRANCES AND EXITS SINCE 1972
BASED ON REPORTS OF INTERNATIONAL TRADE COMMISSION
ENTRANCES EXITS
Firm
Year
Firm
Year
Sandox, Inc.
1973
Occidental Chemical Company
1971
Ashland Chemical Co. (Division Ashland Oil)
1973
Fisher Chemical Co., Inc.
1973
Nlklor Chemical Company
1973
Valchem
1973
Interscab Chemical, Inc.
1974
Cincinnati Mllacron Chemicals, Inc.
1974
Lakevay Chemicals, Inc.
1974
Cordon Corporation
1974
Nalco Chemical Company
1974
Sheperd Chemical C:npany
1974
Greenwood Chemical Company
197S
Ventron Chemical Company
1974
Pelron Corporation
1975
FMC: (Industrial Chemicals Division only)
1975
Vlnings Chemical Company
975
Michigan Chemical Corporation
197*
Vlcksburg Chemical Company
1973
Kay-Fries Chemicals, Inc.
1976
Parke-Davis + Company
1974
TOTAL ENTRANCES - 12
TOTAL EXITS • 9
NOTE: Does noc count instances In vhlch firms both entered and exited (or
Chemicals; R.S.A. Corp.; Salisbury Laboratories; Martln-Karletta Corp
SOURCE: U.S. International Trade Commission. U.S. Production and Sales of
vice versa) list during period es was case with
.; Pflster Chemicals, Inc.)
Pesticides and Related Products, (or yeari 1972
five firms (Sob in
through 1976
<-2J-
-------
Table 9
Number of Firms Registering for the
First Time With EPA.As a Pesticide
Manufacturer,— 1972-1977
Year Number of New Firms
1972
396
1973
413
1974
347
1975
199
1976-77
Total
524
1,879
1/ Includes basic manufacturers and formulators but
not distributors.
Source: Registration Division, OPP, EPA, January 1978
-30-
-------
In examining exits from the pesticide industry, EPA staff made a survey
of the firms filing for bankruptcy under Section X of the Securities and
Exchange Act. From this source it was determined that none of the 173 firms
reported in the SEC annual reports from 1972 to 1976 as having gone into
bankruptcy, were pesticide firms. This finding indicates that firms in the
pesticide business are either profitable or, when leaving this industry, can
be sold to others at a price sufficient to cover all obligations.
The pesticide industry is planning plant expansions well in line with
trends for industry growth discussed above. In 1975 and 1976, USDA surveyed
the pesticide industry to collect data on plans for plant expansion, among
other information. In 1975, 21 of 29 firms surveyed indicated that they were
expanding capacity or planning to expand capacity in the next few years (ERS/
USDA, July 1975). These 21 firms accounted for expansion programs at 49
separate pesticide plants.
Respondents to the 1976 surveys reported plans to expand pesticide plant
capacity by 12 percent in 1976 and another 16 percent in 1977. The expansion
activity focused on herbicide production with plans for expansion in herbicide
production capacity of 19 percent for 1976 and 23 percent for 1977 (ERS/USDA,
April 1976, February 1977).
-31-
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PESTICIDE R&D EXPENDITURES
Magnitude of Pesticide R&D Expenditures
Reported pesticide R&D expenditures have increased from approximately
70 million dollars in 1970 to approximately 195 million dollars in. 1976,
according to National Agricultural Chemical Association reports (NACA, 1971,
1975, 1976) (see Table 10). These results are not statistical estimates
based on a sample of firms, but they are believed by NACA to represent
most of the pesticide industry's R&D expenditures in each year. They are
thought to be a good indication of U.S. pesticide R&D expenditures.
Time trends are observed by converting these expenditures to a per-company
basis for the period 1970 through 1976. During this period, R&D expenditures
per company nearly trippled (from 2.1 million dollars in 1970 to 5.9 million
dollars in 1976). If all expenditures are deflated to the 1970 price level,
the increase in R&D expenditures is 68 percent. This considerably exceeds
the trend of R&D expenditures in U.S. industry generally, which at a constant
price level has remained level since 1970 (from 19.8 billion dollars in 1970
to 19.9 billion dollars in 1976) (NSF, 1976, 1978).
Comparison of R&D Expenditures and Sales
The magnitude and growth in pesticide R&D expenditures can be put in
perspective by comparing them to pesticide sales during the same time period.
For the period from 1970 to 1976, reported pesticide research and development
expenditures of 857 million dollars equalled 7.6 percent of the 11,340 million
dollars reported sales (see Table 10).
-32-
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Table 10
Pesticide R&D Expenditures and Sales, 1970-1976
Pesticide R&D Expenditures Pesticide Sales
Per Comoanv—
Registration- Registration- ,, Total R&D Registration-Related
Year Total Related— Total R&D Related R&D Total Per Company— As Percent q( R&D as Percent
Current 1970 Current 1970 Currenc 1970 Current 1970 Current 1970 Current 1970 Total Sales^ Of Tocal R&D^-
Price Price Price Price Price Price Price Price Price Price Price Price
levels Level Levels Level Levels Level Levels Level Levels Level Levels Level
— million dollars—
—
-thousand
dollars-
million doLlars
.....percent—
1970
70
70
13
13
2,118
2,118
403
403
722
722
22
22
9.7
18.6
1971
S3
85
18
17
2,436
2,361
497
482
1,044
1,012
29
28
8.4
20.5
1972
98
91
21
19
2,736
2,537
589
546
1,154
1,070
32
30
8.5
21.4
1973
111
91
26
21
3,075
2,518
714
585
1,417
1,161
39
32
7.3
23.4
1974
135
93
39
27
3,643
2,513
1,046
722
1,956
1,349
53
36
6.9
28.9
1973
160
101
45
28
4.338
2,739
1,214
766
2,471
1,560
67
42
6.5
28.1
1976
195
118
60
36
5,915
3.565
1.821
1,097
2,576
1.552
78
47
7.6
30.8
Total
857
649
222
161
—
—
—
—
11,340
8,426
—
—
7.6
25.9
Change,
1970j.
1976=-' — — — 3,797 1,447 1,418 694 — — 56 25
Percenc-— — — — 179 68 352 172 — — 254 114
1/ 1970 includes following R&D categories: Toxicology and metabolism, registration and others.
1971-1975 includes following R&D categories: Toxicology and metabolism, environmental testing, registration and others.
1376 Includes following R&D categorise: Toxicology, metabolism, environmental chemistry, residue analysis, registration, all ocher expenditures.
2/ EPA calculations.
Source: National Agricultural Chemical* Association, "Industry Profile Study," 1971, 1975, 1976.
-------
However, with the exception of 1976, this percentage followed a declining
trend. On a yearly basis, R&D expenditures declined from 9.7 percent of sales
in 1970 to 6.5 percent in 1975, and then increased slightly to 7.6 percent in
1976 (see Table 10 and Figure 3). This increase in 1976 can be explained
by the combination of a relatively small increase in reported sales in 1976
with the largest increase in R&D expenditures of the 1970's. Overall, sales
increased by 254 percent from 1970 to 1976, while R&D expenditures increased
by 179 percent (see Table 10 and Figure 4).
In summary, despite the large increase in pesticide R&D expenditures
from 1970 to 1976, there has been a trend for R&D to absorb less of the
sales dollar. The industry has shown confidence in the future of the industry
by increasing its investments in R&D, and has received some confirmation of
that confidence by its receipt of even greater increases in sales.
Comparison of Registration-Related R&D Expenditures
and Total R&D Expenditures
Changes have occurred in the distribution of individual elements of R&D
expenditures during the 1970's. Most notably, those R&D expenditures related
to the registration process have increased from a low of 18.6 percent of
total R&D expenditures in 1970 to a high of 30.8 percent in 1976 (see Table 10
1/
and Figure 5). These elements— averaged 25.9 percent of total R&D expenditures
during the 1970-1976 time period.
— For most years these include the "toxicology and metabolism," "environ-
mental testing," and "registration and other" categories of R&D reported
in the NACA Pesticide Industry Profile Studies. In 1970, environmental
testing was not included and in 1976 the categories were changed to the
following: "toxicology," "metabolism," "environmental chemistry,"
"residue analysis," "registration," and "all other expenditures."
-34-
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FIGURE 3
U.S. Pesticide R&D as Percent of Sales, 1970-1976
Percent
16 •
12 ¦
i
iji
in
8 -
it
1971 1972 ]<)7.'J 1974 1975 .1976
SOURCE: EPA calculations from data in: NACA, "Industry Profile Study", 1971, 1975, 1976.
-------
FIGURE 4
R&D Expenditures and Pesticide Sales per Company
Million Dollars
80
70
60
50
AO
30
20
10
SALES
R&D'
1970
1971
1972
1.973
1974
1975
1976
SOURCE: EPA calculations from data in: NACA, "Industry Profile Study", 1971, 1975, 1976.
-36-
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FIGURE 5
Registration-Related R&D Expenditures as a Percent of Total R&D Expenditures, 1970-1976
Percent
AO -
32 -
24 -
16 -
8 -
1970 1971 1972 1973 1974 1975 1976
SOURCE: EPA calculations from data in: NA.CA, "Industry Profile Study", 1971, 1975, 1976.
-------
Reflecting this shift in R&D expenditure patterns,. registration-related
R&D expenditures increased by 352 percent (from 403 thousand dollars per
company in 1970 to 1,821 thousand dollars per company in 1976) during the
same period that total R&D expenditures increased by 179 percent (from 2,118
thousand dollars per company in 1970 to 5,915 thousand dollars per company
in 1976) (see Table 10 and Figure 6).
There are a variety of reasons for this shift in emphasis. One is
the greater cost associated with developing a new pesticide as compared to
finding a new use/market for an existing pesticide, combined with the
time and effort involved in obtaining EPA registration. Other reasons are
associated with changes internal to the pesticide industry and the greater
risk associated with introducing a new chemical to the environment.
Internally, the industry has matured to the point where synthesis and
screening activities have a smaller probability of producing a successful
pesticide than they used to have. For example, NACA reported that an
average of 5,481 compounds were screened per commercialized product in 1967
(NACA, 1970). By 1970, the average number of products screened had increased
to 7,430 (NACA, 1970), and in 1976 an industry spokesman stated that from
8,000 to 15,000 chemicals were screened for each commercialized product
(Goring, 1977). As stated in the Kline Guide to the Chemical Industry, "the
cost of discovery and successfully introducing new products is increasing
rapidly since most chemicals already synthesized have now been screened for
their pesticidal properties (Nobel, 1974)."
Another reason for the shift away from basic R&D concerns the risk of
finding environmental problems with a chemical product after it is marketed,
e.g., Monsanto's Cycle-Safe bottles. Since experiments include neither the
-38-
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FIGURE 6
Registration-Related and Total R&D Expenditures per Company, 1970-1976
Thousand Dollars
7,000
6,000
5,000
TOTAL R&D
EXPENDITURES
4,000
3,000
2,000
REGISTRATION - RELATED
R&D EXPENDITURES
1,000
1970
1971
1974
1972
1973
1976
1975
SOURCE: EPA calculations from data in: NACA, "Industry Profile Study", 1971, 1975, 1976.
-39-
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volume of product that will be introduced to the environment nor the variety
of ways or geographic locations of product-environment interaction realized
after the product is marketed, environmental hazards cannot always be pre-
dicted with accuracy. This risk is considerably reduced for chemicals
previously marketed, since they have already passed this marketplace test.
For new chemicals there is also the risk of greater economic loss if a
new pesticide is removed from the market. When a product is removed from
the market, the manufacturer must absorb a loss on the production and distri-
bution costs associated with the product in addition to the research and
development costs. Both R&D costs and production costs are likely to be
higher for a new pesticide than for a new use of an existing pesticide. For
a new pesticide, at least screening costs will be incurred in addition to
the R&D costs associated with developing either a new chemical or a new use
for a currently used chemical. In addition, the cost of designing and
constructing production facilities for a new chemical are likely to be greater
than for a new use of an existing chemical.
Consequently, the trend among pesticide manufacturers is less reliance
on the strategy of developing a new pesticide, patenting it and pricing it
at a premium for those years before competition sets in and more on the
strategy of finding new uses and specialty markets for chemicals which are
already being marketed.
When a pesticide is removed from the market by EPA via cancellation/
suspension, a market is automatically generated for substitutes to fill the
void. Such major actions to date (DDT, aldrin, dieldrin, mercury, chlordane/
heptachlor) have taken an equivalent of approximately 5 percent of U.S. total
usage of pesticides (active ingredient basis) off the market (Aspelin, Gaede,
and Luttner, September 1976).
-40-
-------
Time Required for Pesticide R&D for New Products
Offsetting the impact of increased registration-related R&D expenditures
is the recent decline in the average length of time between discovery and final
registration. After a peak of 97 months in 1974/1975, the elapsed time fell
by almost 2 years, to 74 months. This is less than the average elapsed time
of 77 months in 1970 (NACA, 1973, 1975, 1976).
Year
Average Elapsed
Time for Discovery to
to Final Registration
1970
1973
1975
1976
1974/75
77
80
97
93
74
-41-
-------
Quotations about Pesticide Research and Development
The following page contains quotations about pesticide R&D from trade
publications and government reports.
These quotations indicate that traditional basic pesticide R&D has
reached a stage of diminishing returns. Consequently, screening activities
are becoming less random and more directed towards specific market oppor-
tunities, as are other aspects of R&D.
Addressing the issue of agency use of data in its files when considering
registration applications, Patricia Wald argued that history contradicts
the industry contention that unrestricted use of this data is a deterrent to
investment in pesticide R&D.
-42-
-------
Quotation* About Peetlclde Research and Development
Souk*
Remarks
So arc*
laitkl
Chemistry In the
Economy, American
Chemical Society, 1973,
p. 241
"Profits ar« reetrlcted, moreover, by the nature
of patent law combined wtlh the long gestation
period for new pesticides. The world market for
pesticide* Is sclll expanding profitably but is
(rawing steadily more competitive. Because of
chese fsetors, many experts feel that research
and development: on nev pesticides alresdy Is
aubject to dlninlehlng returns,"
Coring, ed.. Kline Guide
to the Chemical
Industry. 1974, p. 143
"Much of the past success of the Industry
has been due to the Introduction of more
specific and higher-priced products. However,
the coat of dlacovering and successfully in-
traducing new products is increasing rapidly
since most chemicals already synthesized have
new been screened for their pestlcidsl
properties."
Stanford Research
Institute, New
Innovative Pesticides:
An Evaluation of
Incentives and Disin-
centives for Cowaerclal
Development bv
Industry, prepared for
OPr. JEPA, Hay 1977,
P- 1
"A tranaltlon in reseerch from random-screening
techniques to a more sophisticated approach In-
corporating targeted searches for control
products that act on specifically Identified
biochemical or physiological processes within
target organisms appears to be under way within
the chesilcal induacry. This reflects acknow-
ledgement that random screening nay be approaching
a point of diminishing returns, and :hat a more
sophisticated understanding of mode-of-action
characteristics will probably be required for
future successes, particularly In insecticide
development."
"Pesticide Reseerch in
Europe," farm
Chemicals. Sept. 1973
"But developing new and interesting pesticide
products Is not as easy at it was."
"There are sons 500 pastlcldal compounds
available to the farmer and these first and
second generation pesticides mean that any
new candidates must be developed for specific
asrket opportunities. This in turn maans
that pesticide research is increasingly
product and market oriented with leea
emphasis on basic or innovative reseerch."
"A previous survey
-------
R&D COMPETITIVE ENVIRONMENT
The pesticide industry at the basic producer level is highly concentrated
or oligopolistic, i.e., individual firms have important shares of the various
pesticide markets. These market shares allow them to assert themselves by
influencing price, quality and quantity of pesticides available. Market
power such as evidenced in the basic producers of pesticides generally comes
about because of barriers to entry into the market by other firms. Barriers
to entry include such factors as patent protection and a requirement for large
initial investment. The basic pesticide producing industry has both of these
factors involved.
In 1970, seven firms accounted for 63 percent of U.S. pesticide sales,
indicating the degree of concentration in the pesticide industry (NACA, 1970).
Furthermore, a market survey conducted for EPA by Doane Agricultural Service
showed that, for many major crops, 8 or fewer insecticides and 8 or fewer
herbicides account for 75% of the respective markets. In some crops, including
corn, cotton, and soybeans, 4 insecticides account for 75% of the insecticide
markets for those crops (see Table 11) (Doane Agricultural Service, 1976).
Competition in these markets is further reduced in the geographical submarkets
of each market, e.g., the markets are even more concentrated at the state
level than at the national level.
Of 82 companies registered with ITC in 1974 as pesticide and related
products manufacturers, about 30 supported pesticide research staffs and
submitted registration data to EPA. These companies are generally large,
multi-product firms which can support the long-term studies of hazard which
are required (ADL, 1975).
-44-
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Table 11
Concentration in Pesticide Markets
Commodity
Herbicides
Market Share
Leading Active
Ingredient
percent
Number Active
Ingredients
Comprising
75 percent of
Market
Insecticides
Market Share
Leading Active
Ingredient
percent
Number Active
Ingredients
Comprising
75 percent of
Market
Corn y
47.2
6
37.3
4
Cotton.!/
40.5
7
45.0
4-6
Soybeans.!/
30.7
5
24.3
4-8
Wheat?/
50.2
4-6
—
—
Peanuts2/
32.8
4
17.4
9
Tobacco^/
35.0
3
27.7
6-8
Potatoes^/
55.6
2
21.1
6
Tomatoes^/
32.0
4
28.8
4-6
1/ Estimated 1975 level.
2/ 1973-74 average.
Source: Derived from Doane Agricultural Service, "Current Pesticide User
Profiles for Selected Pesticide Intensive Crops," 1976 (Nonproprietary
data)
-------
R&D expenditures are highly concentrated among a few firms. Of 33 firms
reporting 1967 R&D expenditures to NACA, seven accounted for 46 percent of all
pesticide R&D expenditures. This concentration appears to be increasing, as
in 1970, seven firms iaccounted for 50 percent of R&D expenditures (NACA, 1970).
Exclusive use of data functions as a barrier to entry, benefiting those
companies with existing R&D programs to the detriment of smaller firms
wishing to enter a market. If companies which submit data to EPA are allowed
exclusive use of these data, smaller companies wishing to enter the market
will either be prevented from entering or forced into wasteful duplication of
the data with their own research.
In addition, an exclusivity provision would prevent EPA from implementing
a workable generic standards program. Such a program has the benefit of
streamlining the EPA registration process and enhancing the competitive
aspects of the pesticide industry by making it easier for small firms to
gain entry to the market.
The lack of an exclusive-use-of-data provision in FIFRA does not represent
the loss of a traditional privilege. Rather, its addition to FIFRA would
represent a special privilege to the pesticide industry which is not enjoyed
by other industries and has only been enjoyed by the pesticide industry on
a de facto basis since the passage of FEPCA in 1972. Prior to 1972, EPA and
USDA before it, utilized any test data in its files when processing regis-
tration applications.
Exclusive use of data was first proposed by NACA during the debate over
amendments to FIFRA in 1971, based on the argument that "the then-current EPA
practice of allowing applicants to rely on data developed by the original
registrant was causing pesticide firms to abandon their research and develop-
-46-
-------
ment programs (Senate, July 1977)". The proposal was defeated at that time
because It would restrain trade, providing monopoly-like power to companies
for several years after the patent period had expired (Senate, July 1977).
Essentially, exclusive use of data does not become useful to a company
until after one of Its products no longer has patent protection. Patent
protection Is a barrier to entry which gives its holder greater control over
competition than an exclus ive-us e-of-dat a provision would. When a product Is
patented, a competitor must be licensed by the patent holder before producing
the product. Under a situation where an exclusive-use-of-data provision
exists, but no patent, a competitor can enter the market if willing to
fund the research needed to develop the product and obtain a registration.
Thus, while exclusive use of data is a barrier to entry, it is effective only
i
for products which have been on the market so long that their patents have
expired.
Recently, the Department of Justice addressed the issue of exclusive
use of data in the pesticide industry, and found it to provide patent-like
protection and, therefore, objectionable on legal grounds. In a June 1977
letter to Senator Patrick J. Leahy, Particia Wald, Assistant Attorney
General, stated, "We . . . find the extension of patent protection inconsistent
with long-standing law accommodating the patent laws with our system of free
competition. The courts have held that the patent grant, as an exception
to the competitive system's general prohibition of monopolies, must be strictly
confined to its boundaries." "Any proposal having the effect of extending
the patent protection beyond the statutory period would be inconsistent with
-47-
-------
existing law and with the spirit of free competition. Furthermore* since the
Inception of our patent laws, Congress has provided a single period of patent
protection for all industries. We see no reason for a special exception for
the pesticide industry."
In conclusion, the pesticide industry has no need of the special
privilege of exclusive use of data. The industry is already highly con-
centtated and such privilege will only further reduce competition in the
industry, eventuating in higher consumer prices for pesticides. Further-
more, the Department of Justice argues that the courts have taken a strong
stand against this type of privilege, routinely striking down attempts to
-extend patent protection.
-48-
-------
SURVEY OF FINANCIAL/MARKET DATA ON MAJOR PESTICIDE MANUFACTURERS
A review of financial and market data for domestic pesticides manufacturers
indicates that most are experiencing favorable economic outcomes and are
expected to do so in the future. Most of the 17 firms reviewed in Table 12
indicate good to excellent overall future economic prospects based on available
data. No firms are known to face highly negative prospects.
-49-
-------
TabU 12
Survey at Financial/Market Oata on M-iJor U.S. Dumatlc P«»tlcid* Manufacturer
Haae of Company
Typa ofj.
Coapanv—
Relative
laportanca
Of Peatlcldea
To Flrma^'
Principal
Focua of
Pcatlclde
Sualnoaa
Salaaj.
Trend—
Proflj.
Trend—
Chantaa In Paatlcldaa luatnaaa Activity^'
Ovarall
tconoalc
S",K2'
Shall
Oil
Minor
Inaactlcldaa
Up
up
Significant raeearch affort undaruay -
coaacrucclon of n«w planta.
facallant
Dupont
Chaalcal
Minor
FunglcIdea
Inaactlcldaa
Marbleldaa
Dp
Mix ad
Record aalaa in agrlc«chaalcala par-
ticularly la Inaactlcldaa.
Cood
Union Carbide
Chaalcal
Mlaor
Harblcldaa
Op
Mlxad
Dadlcatad to agricultural chaailcala.
Ruaaall Train appointed director.
Aachaa vaa acquired la 1977.
Good
Sow
Oiaalcal
Minor
Harblcldaa
Inaactlcldaa
FUnglcldaa
Up
Op
Highly aucceaaful/expendlng
txcellent
Honaanto
Chaalcal
Minor
Harblcldaa
Inaactlcldaa
Up
Up
Oaaand for agricultural chaalcal will
lead to aalaa advanca.
Excallant
Unlroyal
Tlra
Minor
Fungicide
Study
Down
Growth axpactad In agrlc./chaalcala
Fair
IMC
Chaalcal
Minor
All
paatlcldaa
Op
Mlxad
Favorabla In paatlcldaa
Geo*
Aaaclcan Cyanaald
Chaalcal
Mlaor
All
paatlcldua
Up
Mlxad
Proalalng nav harblcldaa. Inaactlcldaa
hava growing aarkata. Haw planta vindar
conatructlon.
Good
Hareulai
Chaalcal
Minor
Inaactlcldaa
Staady
Mlxad
Uneartaln In paatlcldaa
Pali
Diamond Shanroek
Chaalcal
Minor
Funglcldaa
Harblcldaa
Inaactlcldaa
Op
Op
Excallant
111 Lilly
Drug
Mlaor
Harblcldaa
Up
Up
Ixcallant
loin t Kaaa
Chaalral
Major
Funglcldaa
Harblcldaa
Hltlcldaa
Staady
Dom
Proapecta aavaraly curtailed la
paatlcldaa by CPA daclalon to
review all saw uaaa.
Pair
Stauffar
Chaalcal
Major
Harblcldaa
Inaactlcldaa
Funglcldaa
Op
Op
Incraaaaa la aarkat ahara of paatlcldaa
txcellent
Panawalt
Chaalcal
Major
Inaactlcldaa
Up
up
Strang aalaa gala ovar 1973.
Iiaallaat
Cbavroa (Std. of CA)
Oil
Mltfor
All
Paatlcldaa
VP
Op
Staady aalaa galna
baallaat
Horthwaat induatrlea
(Valalcol)
Cangloaerata
Minor
Inaactlclda
Op
»P
Paatlclda aalaa aat naw racord
but chlordana and haptachlor
raglatratlona under cancallatlaa
procaadlnga.
laaallaat
Upjohn
Drug
Ml oar
Harblcldaa
Puaglcldaa
Op
Staady
Agricultural product) aalaa ara rlatag
bat aamlnga ara alxad with thraa
yaara of praflta, two af laaaaa la tha
laat five yaara.
6aad
1/ Forbaa Claaalflcatlon Torbaa JOth Annual Report on taarlcan Induaery", January 9, 1978.
1/ lie Raporta, Standard t Poor*, International Trad* Com lee Ion, (major: 2QX or aore of Mill, alnort 1m* thaa 20X af aalaa)
T/ Standard t Poor a Stock Market Raporta and coapany annual raporta.
4/ Baaed on abova aourcea.
-50-
-------
REFERENCES
American Chemical Society, Chemistry in the Economy, Washington, D.C., 1973.
Arthur D. Little, Inc., Environmental Evaluation of the Possible Impact of
Pesticide Legislation on Research and Development Activities of Pesticide
Manufacturers, prepared for Office of Pesticide Programs, Environmental
Protection Agency, EPA-540/9-75-018, February 1975.
Aspelin, Arnold L.; Gaede, Harold W., Jr.; and Luttner, Jark A., "EPA
Pesticide Cancellation/Suspensions: A Survey of Economic Impacts,"
Economic Analysis Branch, Office of Pesticide Programs, Environmental
Protection Agency, September 1976 (mimeographed).
Blair, Wm. & Company, The Pesticide Industry—An Overview, July 7, 1975.
Crop Reporting Board, Statistical Reporting Service, U.S. Department of
Agriculture, Crop Production; 1976 Annual Summary, January 17, 1977.
Doane Agricultural Service, Current Pesticide User Profiles for Selected
Pesticide Intensive Crops, 1976, (nonproprietary).
Economic Research Service, U.S. Department of Agriculture, Agricultural
Outlook, AO-26, October 1977.
, Agricultural Outlook, AO-28, December 1977.
Economic RSesearch Service, United States Department of Agriculture, Evaluation
of Pesticide Supplies and Demand for 1974, 1975, and 1976, AER No. 300,
July 1975.
, Evaluation of Pesticide Supplies and Demand for 1976, AER No. 332,
April 1976.
, Evaluation of Pesticide Supplies and Demand for 1977, AER No. 366,
February 1977.
Farm Chemicals, "A Look at World Pesticide Markets," September 1977.
, "Pesticide Research in Europe," September 1973.
, "Pesticide Roundup," January 1977.
, "Pesticides to Grow 6-8% Annually," February 1977.
"World Pesticide Markets," September 1975,
Forbes, "Fings Ain't Wot They Used to Be," January 1, 1970.
. , "The Industry Reports," January 9, 1978.
, "Who's Where in the Industry Groups," January 9, 1978.
-51-
-------
, "Fortune's Directory of the 500 Largest U.S. Industrial Corpora-
tions," May 1977.
Goring* Cleve A.I., "The Costs of Commercializing Pesticides," Presented at
the International Congress of Entomology, August 20, 1976 (mimeographed),
also published in Pesticide Management and Insect Resistance, eds.,
David L. Watson and A.W.K. Brown, New York, N.Y.: Academic Press, 1977.
"Prospects, Problems for the Pesticide Manufacturer," Farm Chemicals.
January 1976.
National Agricultural Chemicals Association, "Industry Profile Study," 1970,
1971, 1975, 1976.
National Science Foundation, Industries Studies Group, private communication,
February 1978.
» Science Resources Studies Highlights, NSF 76-324, Washington, D.C.,
October 27, 1976.
Nobel, Patricia, ed., The Kline Guide to the Chemical Industry, 2nd ed.t
Fairfield, N.J.: Charles H. Kline & Co., Inc., 1974.
Ouellette, Robert P. and John King, "Pesticides '76," Chemical Week.
June 23, 1976.
Seehusen, Marven H., The Economic Health of the Pesticide Industry, prepared
for OPP, EPA, January 1978.
Stanford Research Institute, New Innovative Pesticidest An Evaluation of
Incentives and Disincentives for Commercial Development by Industry.
prepared for OPP, EPA, May 1977.
U.S. Department of Commerce, Industry and Trade Administration, 1978 U.S.
Industrial Outlook. Washington, D.C.: U.S. Government Printing Office,
January 1978.
U.S. House of Representatives, Committee on Agriculture, "Amendments to
Federal Insecticide, Fungicide, and Rodentlcide Act," House of Representatives
Report No. 95-663, October 5, 1977.
U.S. International Trade Commission, United States Production and Sales of
Pesticides and Related Products. 1972 through 1976.
U.S. Senate, Committee on Agriculture, Nutrition, and Forestry, "Extension
of the Federal Insecticide, Fungicide, and Rodentlcide Act", Senate
Report No. 95-334, July 6, 1977.
Wild, Patricia, Assistant Attorney General, U.S. Department of Justice,
letter to Senator Patrick J. Leahy, published in Senate Report No. 95-334,
July 6, 1977.
-52
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HOUSE OF REPRESENTATIVES
PROPOSED AMENDMENT
TO SECTION 3(c)(1)(D)
OF FIFRA
APPENDIX I
ECONOMIC ANALYSIS BRANCH
CRITERIA AND EVALUATION DIVISION
OFFICE OF PESTICIDE PROGRAMS
FEBRUARY 15, 1978
-------
USE OF DATA TO SUPPORT REGISTRATION:
ADDITIONAL DATA TO SUPPORT EXISTING REGISTRATION
Sec. 2. (a) Section 3 of the Federal Insecticide, Fungicide, and Rodentlclde
Act, as amended, is amended by—
(1) in subsection (c) (1), redesignating existing subparagraph (F) as
(G), and amending subparagraph . . . (E) and adding a new subparagraph
(F), such subparagraphs . . . (E), and (F) to read as follows:
"(E) if relied upon by the applicant, data first submitted to the
Administrator after January 1, 1970, by another applicant to support
an application for registration or for an experimental use permit,
or to satisfy a request by the Administrator: Provided, That such
data shall not, without the written permission of the original data
submitter, be considered by the Administrator to support an appli-
cation by another person, except—
"(i) in the case of data originally submitted to support an
application for an experimental use permit or for registration
of a new pesticide product, the Administrator may consider the
data to support another person's application for registration
after passage of a period of five years following the date the
Administrator first issues a registration, to the extent permitted
by subparagraph (F) of this subsection;
"(ii) in the case of data submitted in support of an application
for an amendment adding a new use or uses to an existing registra-
tion and which pertains solely to such new use, such data may be
considered in support of another person's application for registra-
tion after passage of a period of five years following the date the
Administrator first registered the pesticide, to the extent per-
mitted by subparagraph (F) of this subsection; and
"(ill) in the case of data requested by the Administrator and
first submitted to support or maintain in effect an existing
registration or to support rereglstration, the Administrator may
consider the data to support another person's application for
registration after passage of a period of five years following the
date of submission, to the extent permitted by subparagraph (F)
of this subsection;
"(F) an offer to compensate the original data submitter, during the
five-year period commencing immediately upon the expiration of a period
of exclusive use, for an item of data under subparagraph (E)(1), (11),
or (ill) of this subsection. The Administrator may, without the per-
mission of the original data submitter, consider such item of data in
support of an application for registration by any other person (herein-
after in this subparagraph referred to as the 'applicant') only if the
applicant has submitted to the Administrator such offer accompanied by
evidence of delivery to the original data submitter of the offer.
(b) The amendments to section 3(c)(1)(D), (E) and (F) of the Federal
Insecticide, Fungicide, and Rodenticlde Act, as amended, made by this section
shall apply with respect to all applications for registration or rereglstra-
tion approved on or after the date of enactment of this amendment.
-54-
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PESTICIDE INDUSTRY ENTRANCES AND EXITS
BASED ON ITC REPORTS OF PRODUCTION
AND SALES OF PESTICIDE AND
RELATED PRODUCTS
APPENDIX II
ECONOMIC ANALYSIS BRANCH
CRITERIA AND EVALUATION DIVISION
OFFICE OF PESTICIDE PROGRAMS
U.S. ENVIRONMENTAL PROTECTION AGENCY
JANUARY 27, 1978
-------
FIRMS APPEARING ON U.S. INTERNATIONAL TRADE COMMISSION
DIRECTORY OF MANUFACTURERS, PESTICIDES AND RELATED PRODUCTS, 1972-1976
Firm
1972
1973
1974
1975
1976
Abbot Laboratories
Allied Chemical Corp., Agricultural Division
American Cyanamid Company
Alco Chemical Corp.
Alpha Laboratories, Inc.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Amchem Products, Inc.
Kerr-McGee Corporation
Arapahoe Chemical Inc.
Ansul Chemical Company
Millmaster Chemical Co., Div. of Kewanee Industries,
Buckman Labs, Inc.
Occidental Chemical Company
Cincinnati Milacron Chemicals, Inc.
Ciba Geigy Corp. and Ciba Agricultural Co.
Chemical Formulators, Inc.
Mobay Chemical, Chcmagro Division
W.A. Cleary Corp.
Upjohn Co., Fine Chemicals Division
E.F. Houghton + Company
Diamond Shamrock Corp.
Inc.
X
X
X
X
X
X
X
X
X
X
X1-/
X
X
X
X
X
x3/
X-
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
&
x
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
&
X
X
X
X
X
X
X
Dow Chemical Company
E.I. Dupont deNemours + Company
Eagle River Chemical Corp.
Ferro Corp., Ferro Chemical Division
Fisher Chemical Co., Inc.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
-------
FIRMS APPEARING ON U.S. INTERNATIONAL TRADE COMMISSION
DIRECTORY OF MANUFACTURERS, PESTICIDES AND RELATED PRODUCTS, 1972-1976
Firm 1972 1973 1974 1975 1976
FMC Corp: Agricultural Chemicals Division
Industrial Chemicals Division
Fairmount Chemical Company
Vulcan Materials Co., Chemical Division
GAF Corp., Chemical Division
X /
X—
X
X
X
.4/
X
X
X
X
X
X
X
X
X
X
X
Culf Oil Corp., Gulf Oil Chemical Co., United States
Cuth Chemical Company
Great Lakes Chemical Corporation
Hooker Chemical Corporation
Tenneco Chemicals, Inc.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Hercules, Inc.
International Minerals + Chemical Corporation
Eli Lilly + Company
Mallinckrodt Chemical Works
Michigan Chemical Corporation
Mooney Chemical Corporation
McLaughlin, Gormley + King Company
Monsanto Company
Motomco, Inc.
Merck + Company, Inc.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
x9 /
X-
X
X
X
X
X
X
X
Morton Chemical Company
Montrose Chemical of California
Nease Chemical Co., Inc.
Niklor Chemical Company
01in Matheson Chemical Corp. and Agricultural Division
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
-------
FIRMS APPEARING ON U.S. INTERNATIONAL TRADE COMMISSION
DIRECTORY OF MANUFACTURERS, PESTICIDES AND RELATED PRODUCTS, 1972-1976
Firn 1972 1973 1974 1975 1976
Chevron Chemical Company
Story Chemical Company
Pennwalt Chemicals Corporation
Gordon Corporation
CPC International, Inc., Penvlck Division
*5/
X—
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Pfizer, Inc.
Pierce Organlcs, Inc.
PPG Industries, Inc.
Reichold Chemicals, Inc.
Rhodia, Inc.
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Rohm + Haas, Co.
Riverdale Chemical Company
Stauffer. Chemical Co., Agricultural Division
Shell Oil Co., Shell Chemical Co. Division
Sheperd Chemical Company
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Mobil Oil Corp., Mobil Chemical Co. Div., Industrial Chen. Div. X
Thompson-Hayward Chemical Company X
Troy Chemical Company X
Union Carbide Corporation X
Universal Oil Products Co. UOP Chemical Division X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Pfister Chemicals, Inc.
Uniroyal, Inc., Chemical Division
Velsicol Chemical Corporation
Vineland Chemical Company
Vanderbilt Chemical Company
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
-------
FIRMS APPEARING ON U.S. INTERNATIOKAL TRADE COMMISSION
DIRECTORY OF MANUFACTURERS, PESTICIDES AND RELATED PRODUCTS, 1972-1976
Firm 1972 1973 1974 1975 1976
Wltco Chemical Co., Inc.
Phillips Petroleum Company
Flke Chemicals, Inc.
Stauffer Chemicals, Calhlo Che*.t Inc. Division
Valchem
l
Ul
VO
I
Ventron Corp., Ventron Chemicals
Sandoz, Inc.
Salsbury Laboratories
Sobin Chemical Company
Ashland Oil, Inc., Ashland Chemical Co. Division
Interstab Chemical, Inc.
Lakevay Chemicals, Inc.
Halco Chemical Company
R.S.A. Corporation
Greenwood Chemical Company
Pelron Corporation
Martin-Marietta Corp., Sodvco Division
Vinings Chemical Company
Vlcksburg Chemical Company, Sub of Vertac Consolidated
Kay-Fries Chemicals, Inc.
Parke Davis -(-Co., Sub of Varner Lambert Company
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
*2/
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
-------
FIRMS APPEARING OH U.S. IHTERHATIOHAL TRADE COMHSSXOH
DIRECTORY OF MANUFACTURERS, PESTICIDES AMD RELATED PRODUCTS, 1972-1976
Fir*
1972
1973
1974
1975
1976
1/ Prior to 1971, Cheatsgro Corp.
2/ Prior to 1972, Organic Cheaicals Division
3/ Prior to 1973, Arapahoe Cheaical Division, Syntex Corp.
4/ Prior to 1973, Mlagra Cheaical Division
5/ Prior to 1972, Ott Cheaical Company
Prior to 1974, Baychea Corp., Chemagro Division
7/ Prior to 1974, Sandoz-Waoder, Inc.
8/ Prior to 1976, Millaaster-Onyx, Corp.
9/ Prior to 1976, International Minerals + Cheaical Corp.
SOURCE: U.S. International Tariff Comlssion, U.S. Production and Sales of Pesticides and Related Products, for years 1972 through 1976
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