FMC’s chief executive talks pesticides and his company’s $200 million deal for a sustainable crop protection start-up

FMC Corp., headquartered in a Philadelphia office tower with its three-letter logo visible for miles, produces insecticides for farmers.

It’s one of the largest crop protection companies in the world and relies on selling synthetic chemical products for most of its business: Those insecticides, herbicides and fungicides comprised 94% of FMC’s $5 billion in revenue last year, while biologic and other products made up the small but growing remainder.

Chemical-based products have done a lot of good to help feed the globe’s populations. But the chemicals can evaporate into the air or run off with rainwater, polluting waterways.

Recognizing a growing demand for more sustainable crop protection, FMC recently announced a deal to buy Danish insect-control start-up BioPhero for $200 million. The company manufactures with a yeast-based fermentation process — similar to how biologic human drugs are made from natural sources — and its products emulate pheromones in nature, tricking males and females in a way that frustrates mating.

“You cannot be a chemical company in today’s world, and not be fundamentally linked to sustainability,” said FMC’s president and chief executive, Mark Douglas. Farmers and the public “are all interested in the technologies that have less of an impact.”

BioPhero could add $1 billion in revenue to FMC by 2030 as it develops a product pipeline that targets crop-devouring pests: cotton bollworms on soybeans, cotton and corn; rice stem borers on rice; fall armyworms on cotton, corn, soybeans and fruits and vegetables; diamondback moths on vegetables; and European corn borers on corns and cereals.

The deal is expected to close after regulatory approvals later this year.

Douglas, 59, was raised in England and worked at the Philadelphia specialty chemical giant Rohm & Haas for 21 years. He has been at FMC for a dozen years, promoted to CEO in 2020. He replaced Pierre Brondeau, also a former Rohm & Haas executive. In a recent interview with The Inquirer, Douglas discussed why pheromones are so effective, the industry’s transition to sustainable products, and what he hears from farmers all over the world. His comments were edited for brevity.

We want to bring these products to market that can lower the overall load in the industry of synthetic chemicals, give you new modes of action, and be more sustainable. ... It’s totally chemical free.

Pheromone technology is very, very expensive to produce through chemical synthesis. So it tends to be used on high-value crops like fruits and vegetables. Anything that’s grown in a greenhouse. This methodology is completely unique [and] has a much lower cost. We intend to make it available for soy, corn, rice, wheat, some large row crops. We’re looking to expand the market from being very niche to be very broad.

In nature, insects produce pheromones to attract mates. That is what they do. So over a large distance, very small amounts of pheromones. The females will put these pheromones out. The males find the females. What you do with these pheromones is you spray them in a field and it confuses the insects so they literally can’t find a mate. So you think about it. The next population is much less and you can use less chemicals and it’s very sustainable. So you can alternate between chemicals and pheromones. And ultimately you’re lowering the infestation, you’re lowering the pest pressure.

Yep. So pharmaceuticals went from chemistry to biology; we’re following the same route.

We think the manufacturing is going to be a hybrid model. Some of it will be done in-house and some of it will be done through [contract] manufacturing.

Two-hundred million dollars for a new technology is probably our biggest acquisition in this area. We have made smaller ones in the past. We continue to invest in R&D in this space at quite a high rate. So yes, our biggest one. I don’t think it’ll be the last one, either. We have other targets that we’re looking at.

This is a platform technology. There is no reason why we can’t tweak that genetic yeast to produce other chemicals. We believe this is a manufacturing platform that can deliver other chemicals for us that would replace the chemicals that we make synthetically. So it’s a much bigger play.

We’re almost $6 billion [in revenue] this year. So we have about a 9% market share of the global market for pesticides [that’s] about $68 billion. We think that these types of biologicals will reduce the synthetic market but that will not impact FMC’s growth because we have so much growth to go. We don’t really care whether the volumes come down in some of these areas because we can still take market share with the new technologies.

When you’re developing something, it had better have an unmet need or it’s never going to win. As I travel the world and talk to farmers, and I do it all the time, I get questions on where are the biologicals. When are they going to perform like chemicals? When are they coming?

The synthetics are very, very efficient. So if you’re a grower and you’re used to spraying a field ... as soon as that insecticide hits, the insect drops dead. You can do that, and your dad did it before you, and your grandfather did it. I come along with a biological that doesn’t quite work in the same way. Maybe takes a little longer, but it’s still good. That’s a hard sell. So it’s a case of getting the technology to a point where it can compete efficiently with the synthetics. That’s been the key. Not because we don’t want to do it.

It’s exactly the same molecule. They work just as efficiently as Mother Nature. So the hit rate on this is super high. Now there are other areas of biologicals that we’re producing in other ways. They’re not quite as good. So it’s going to be an iterative cycle. It’s going to take us years ... to get the right product performing in the right way.

It’s a $68 billion market. To say you’re going to produce $30-plus billion dollars of biologicals, it’s a long way out.