Trends in Outsourcing Within the Agrochemical Industry

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It used to be thought that outsourcing was a necessary evil being reserved for the activities that you could not, or did not wish to, do. The make-up of the agrochemical industry has changed significantly. The R&D based organisations have combined and disappeared while the significance of manufacturing, distributing and trading organisations has grown greatly. Many of these new players have no internal R&D facilities and depend entirely on external partners for development and registration of their products. Getting new agrochemical products registered as quickly as possible is absolutely critical to their profitability and a key element of any internal justification to develop. External research organisations offer the opportunity to launch activities on the critical path in parallel rather than sequentially and hence can play a part in shortening the duration of development programs. The rise in global food prices has improved profitability in the agrochemical industry. Products which were previously financially unattractive are now able to generate worthwhile returns. A higher number of new products are coming to the market and new markets are opening up for existing products. Getting all these new products and market opportunities registered successfully has placed a higher burden on agrochemical industry R&D resources. The regulatory barriers to product entry and continued sale of agrochemical products are getting higher. Additional studies and assessments are required, requirements are getting tougher and in more instances higher-tier studies are needed to satisfy them. New regulations such as REACH asking for information on intermediates and formulated product constituents have added to the workload.
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