AgrEvo: From crop protection to crop production

AgrEvo is a German producer of crop protection products. In 1995 it made the strategic decision to shift from crop protection to crop production, with the help of biotechnology. It acquired Plant Genetic Systems (PGS), a successful plant biotechnology company, and started a round of acquisitions in the international seed industry. The company soon found out that biotechnology brings many new uncertainties in strategic decision -making. Hoechst Schering AgrEvo GmbH (or AgrEvo) was a German manufacturer of chemicals for crop protection until 1995. Its main products were herbicides, insecticides, and fungicides, us ed in the production of all major field crops as well as for fruits and vegetables. AgrEvo also produced pesticides for non-agricultural uses, particularly to control insects in human environments. In addition, the company was selling seeds, both for horti cultural and agricultural crops. For maize, canola, and soybeans, AgrEvo had developed genetically modified varieties. The central element in AgrEvo’s strategy was to transition from a crop protection to crop production company. AgrEvo no longer just wanted to sell pesticides but also to become a provider of productivity enhancing solutions to the farmer. Biotechnology was seen as the major element in this strategic reorientation, as the focus of crop protection shifted from the chemical molecule to the genetic constitution of the plant itself. Expanding into the seed business was a necessary step in the implementation of this long term strategy. As an independent company, AgrEvo has only existed for 5 years. It was established in 1994 when two German producers of chemicals and pharmaceuticals, Hoechst and Schering, merged their crop protection divisions into a new joint venture. Both companies wanted to benefit from economies of scale in marketing and research and development (R&D). In 1999, AgrEvo’s majority shareholder, Hoechst, merged with the French pharmaceutical and chemical company Rhone-Poulenc to become Aventis. As a result, AgrEvo and Rhone-Poulenc Agro have been combined into Aventis CropScience. This article presents an analysis of AgrEvo befor e the merger.