Russian Specialty Pesticides Market Open for Multinational Suppliers; Kline's Advice: Invest with Caution

PARSIPPANY, N.J., Oct. 3, 2011 /PRNewswire/ -- In the first-ever look at the Russian specialty pesticides market, a new report by worldwide consulting and research firm Kline & Company has found the $218 million market to be dominated by local suppliers and generic products, yet still ripe for new product formulations—a situation that demands cautious optimism for multinational suppliers looking to establish a presence in the market.

Despite these challenges, Kline's Specialty Pesticides 2011 Russia: Market Analysis and Opportunities reveals there is still room for branded suppliers to make inroads with more advanced formulations and technical expertise to help customers find the safest, most effective products to meet their pest and weed control needs. Backed by more advanced product formulations, technical assistance, and a consultative approach, multinational suppliers have a distinct competitive advantage—particularly with industrial and commercial customers who demand a higher level of efficacy, safety and efficiency for their higher-volume applications—over generic suppliers whose only real competitive differentiator is low price.

"The Russian economy is growing, but also still adjusting to a free market economy devoid of government control," said Dennis Fugate, Specialty Pesticides Industry Manager with Kline. "In pest control, the lack of product registration in some segments has opened the doors to off-label usage, low-cost generic imports from India and China, and some imitation products that aren't nearly as effective as the genuine product."

Meanwhile, the Russian government is making progress on enforcing product patents to reduce the prevalence of counterfeit products. In some cases, value-priced generic imports fall outside product registration requirements; in others, registration is extremely difficult and costly. This lack of quality assurance in some areas raises questions about the efficacy and safety of the products themselves, leaving patent enforcement as their only form of regulation.

Fugate adds: "Multinational brands could have a strong advantage with products that can offer certified genuine ingredients and deliver guaranteed results." Rather than rely on the government, some multinationals are taking their own action, incorporating unique identifying marks to their product packaging. For example, Bayer Cropscience offers information on its website that helps customers identify genuine products and even offers a hotline for consumers to call and report a counterfeit product or get information to verify the authenticity of a product they've purchased.

Finally, while the Russian government has conceded some control of the economy, the government "tender" process often awards supply contracts to the same companies year after year, mostly based on established relationships and extremely low pricing. This is most prevalent in the industrial vegetation management (IVM) segment. However, despite this challenge, Kline's data shows the market for IVM is growing, which could lead to more room for competition based on efficiency, efficacy, and technical services.

Fugate says that in spite of these issues, the Russian market is enticing—as the economy modernizes, consumers are eager to try more contemporary Western products, giving technologically advanced suppliers the opportunity to introduce new active ingredients that have yet to make their way into the Russian market. While generic suppliers depend on tried-and-true formulas, this leaves room for product innovation by aggressive formulators who understand the market dynamics.

To gain additional insights, attend Kline's free webinar at 9 a.m. ET on Wed., Oct. 12. Go to http://www.klinegroup.com/market-research/webinars/AGkline2011_fall_webinars.asp to register.

Kline's Specialty Pesticides 2011 Russia: Market Analysis and Opportunities offers in-depth analysis of the professional pest control, stored grain, consumer, forestry, IVM and rural hygiene markets to help subscribers identify potential business opportunities and new markets, understand the competitive landscape, spot market trends and future growth and identify potential alliances, acquisition opportunities or customers.  

About Kline

Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

For more information, contact:
Vera Sandarova
Marketing Communications
+420-222-316-282
[email protected]

SOURCE Kline & Company

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