Efforts by agrichemicals giants to protect sales of ageing blockbuster products, plus a switch to more sustainable farming methods, promises a boon for companies at the forefront a new chapter in farm sprays.

A "fundamental shift in perspective" on how best promote yields, with support switching to crop products less damaging to the environment, is fostering a new generation of farm sprays groups, Hardman & Co said.

"Some of these technologies and the company that develop them will become very valuable," the London-based broker said.

The broker noted companies including California-based AgraQuest and London-listed Plant Health Care and Plant Impact, although the sector is likely to attract an "increasing number of new innovative players".

Patent angle 

The groups' appeal will be based in part on the direct appeal of their products for improving yields with less environmental impact, Hardman said, noting that "use of chemical fertilizers is thought to have unbalanced or destroyed much of the microbial life in the soil".

Plant Impact's Pint spray, for instance, is aimed at improving nitrogen take-up, so reducing rates of fertilizer application required.

However, their case for investment gains an extra gloss from a knock on effect from mounting competition from makers of generic chemicals, whose expansion in glyphosates has prompted a price collapse which has caught out big names such as Monsanto, Nufarm and Syngenta.

"Many of the leading products of these giants... will be coming off patent over the next five-or-so years," Hardman said.

"By adapting their herbicides, fungicides pesticides and fertilizers with clever plant technologies, they cannot only re-establish patent protection, but they can implement a strong new sales pitch as well."

Takeover targets? 

Syngenta is already working on trials with Plant Health Care's Harpin protein, which claims to improve plant disease response, as an addition to glyphosate.

And fungicides "offer an even bigger opportunity" if Harpin can be shown to offer benefits as an additive.

"Many of these products are due to come off patent between now and 2016, leaving their respective market shares open to attack by cheap generic suppliers," Hardman said.

"However, if the formulae can be recombined with Harpins, then the products can be repackaged with unique features."

Ultimately, investors in the new generation of agrichemicals groups might benefit from a takeover premium too, with "the likelihood that the companies will be acquired by the global brands they partner with to give their products access to millions of hectares of arable land".