Dow AgroSciences sorting out Rohm and Haas acquisition

Company to expand its golf presence

INDIANAPOLIS - As the consolidation trend in the chemical industry continues to unfold and competition heats up, companies are scrapping for whatever market advantages they can yet their hands on. In the case of Dow AgroSciences, it made the move earlier this year to purchase Rohm and Haas because the added product lines boosted its position in fungicides and expanded its presence in the turf and ornamentals market.

"As we looked at our product line, we realized that we've always lacked a strong fungicide line," said Scott Eicher, Dow AgroSciences' senior product marketing manager for turf and ornamental.

The need to balance its product portfolio, which is strong in both herbicides and insecticides, was made especially clear last summer when the rates and uses of its popular Dursban insecticide was scaled back by the Environmental Protection Agency. According to Eicher, addressing product gaps was important for the company if it was going to be an effective competitor going forward.

"We wanted to grow our business and Rohm and Haas appeared to have the best fit because it offered patent-protected chemistry," he said. "This allows us to invest and grow the business."

The Rohm and Haas acquisition will also expand Dow AgroSciences' global presence, especially in Latin America and the Pacific Rim.

ADDING TOP PRODUCTS

The deal netted Dow AgroSciences a number of top products including Dimension pre-emergent herbicide and Eagle and Fore fungicides. The company is also negotiating the purchase of MACH 2 insecticide that was made by Rohmid, a joint venture between Rohm and Haas and American Cyanamid.

"MACH 2 was included in the purchase price," Eicher said. "We want to own it outright because we believe that it will be better sold, positioned and promoted by one company. The legal issues are being worked out right now."

While the turf and ornamental group is still evaluating the Rohm and Haas product line, Eicher said that all products will continue to be offered and that he does not anticipate much overlap.

"At this point all the products are staying," he said. "But we need to make sure they fit.

"For example, Dimension is a pre-emergent herbicide for crabgrass control that is unique - it does not stain, has excellent pre-emergent control and has some postemergent activity on young crabgrass, and can be used on cool- and warm-season grasses. In addition, we will continue to make and sell Team Pro herbicide, which also controls crabgrass, to formulators because it is a traditional, costeffective, value-priced product. Dimension has a price premium."

A similar situation exists when it comes to Eagle and Rubigan fungicides. "Rohm and Haas' Eagle fungicide is from the same class as Rubigan," Eicher noted. "But Eagle has a stronger reputation as a fungicide for the golf course market. Do these products fit together? That is the question."

Other possible changes involve cutting back the number of product formulations.

"With Fore fungicide, we'll carry both the traditional formulation and the one formulated with the new "rainshield" technology," Eicher said. "We need to figure out if that makes sense for our business. We might drop a formulation if it doesn't, or find a channel partner or a formulator that might want to go private label with it."

GOLF IS A PRIORITY

As the product evaluation continues, Eicher and his team are working on making sure customers continue to be served and products continue to be properly and efficiently manufactured.

"We need to make sure that our important distribution channel partners are serviced properly so the end user won't see any change in the quality of service they receive," said Eicher. "We also need to make sure the manufacturing transition goes well. We don't have the history and knowledge that the Rohm and Haas management had so we have to make sure we are making the same quality of product that they were delivering."

To help in these efforts, the company has added three new sales staff and a field research biologist. Distribution channels will also be streamlined this fall, said Eicher.

In the long-term, Eicher expects to have product rationalization wrapped up in the next six to 12 months and will ramp up efforts to go after the golf course market.

"Previously, we did not spend many resources on the golf segment," said Eicher. "But now that we have expanded our fungicides line we will be more active in the golf course business."

Dow AgroSciences' expanded product line:

INSECTICIDES: Address, Confirm, Conserve SC, Dursban

SOIL FUMIGANT: Curfew

HERBICIDES: Confront, Dimension, Gallery, Goal, Kerb, Lontrel, Snapshot 2.5 TG, Surflan, Team Pro

FUNGICIDES: Dithane, Eagle, Fore, Rubigan, Systhane

IN THE PIPELINE: Dimension Ultra SC, a new micro-encapsulated formulation that offers less volatility and lower rates.

Copyright United Publications, Inc. Oct 2001
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