German group Bayer’s business in Romania will reach the EUR 300 million threshold with the acquisition of Monsanto Romania, which is part of a bigger international transaction involving the two companies' parent-groups, Romania-Insider.com has learned.

The two companies have combined sales of close to EUR 200 million in the Romanian agriculture sector, representing seeds, crop treatment solutions and other inputs. The remaining EUR 100 million come from Bayer’s pharma and consumer health divisions.

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“The acquisition of Monsanto adds significant turnover to our operations in Romania, including significant exports, and will bring Bayer’s operations in Romania close to the EUR 300 million benchmark,” Bayer Romania CEO Pascal Cassecuelle told Romania-Insider.com. Following this transaction, the Monsanto corporate brand will disappear from the local market, but some of its product brands will remain, Cassecuelle explained. “From a timing perspective we expect to have one organization in place towards autumn 2019 and until then both teams operate independently and remain focused on their customers and objectives.”

Read below the full interview with Pascal Cassecuelle, the CEO of Bayer in Romania, Bulgaria and the Republic of Moldova, about the evolution of Bayer’s business in Romania and the challenges and perspectives of the local pharma and agriculture sectors.

Romania-Insider.com: Bayer Romania reached a turnover of over EUR 200 mln last year, when you took over the company. How did the business evolve in 2018, did it continue the growth trend in recent years? Pascal Cassecuelle: We continue to see positive development across our divisions in 2018 but the forecast is that we will not repeat this year the double-digit organic growth of last year. Of course, the acquisition of Monsanto adds significant turnover to our operations in Romania, including significant exports, and will bring Bayer’s operations in Romania close to the EUR 300 million benchmark. (Note from the editor: In 2017, Bayer Romania had a turnover of EUR 203 million and Monsanto Romania had sales of EUR 97 million, according to data from the Finance Ministry). RI: Bayer completed the acquisition of Monsanto in June. How will this impact the operations in Romania, will there be a merger or the two companies will continue to operate independently? PC: This acquisition creates globally and in Romania the market leader in the agriculture industry. It is positive news for our customers who will benefit from more and faster innovation but also from the combined knowledge of both organizations in seeds, crop protection, agronomy and digital farming with the arrival FieldView in Romania. I have been personally impressed by the level of professionalism of the Monsanto organization in Romania and I am really excited about the opportunities the integration will create for farmers and for our teams. I also would like to highlight the very good collaborative spirit I see in the interactions we are having today between the 2 teams. We clearly have a shared passion for science and agriculture and a common vision for modern sustainable farming. Operationally, the Monsanto corporate brand will disappear but the seeds brand Dekalb will remain. From a timing perspective we expect to have one organization in place towards autumn 2019 and until then both teams operate independently and remain focused on their customers and objectives. RI: What is the structure of Bayer’s business in Romania (the share of each division in the total turnover)? PC: Before the acquisition of Monsanto, our Cropscience division represented approximatively 50% of our sales, Pharma 30% and Consumer Health 20%. After the acquisition of Monsanto, the share of our Cropscience business in the portfolio will grow significantly. This reflects the importance and the potential for modern sustainable farming in Romania. RI: What were the most dynamic market segments this year? PC: Healthcare markets have been more dynamic than the crop protection market, which we expect to be relatively stable this year because of the late cold wave that hit the country at the end of March and the severe drought that has been affecting autumn crops since August. The pharmaceutical market increased overall 9.8% in local currency as MAT9_2018 (Moving Annual Total, the 12 months ended on September 30, 2018), reaching an estimated RON 14.9 bln (EUR 3.2 bln). The highest growth was posted by the new therapeutic class “direct Factor Xa” inhibitors, a modern approach to anticoagulation. Bayer is also well represented in this class with our global blockbuster drug Xarelto. The OTC market increased by 10.1% in value, in the same period, with the fastest segments being analgesics (+13%) nasal decongestants (+17%), allergy (+10%), mental health products (+17%). Bayer is participating in this growth with its well known Aspirin, Alka-Seltzer, Saridon and Afrin brands. RI: Romania’s agriculture sector has increased in recent years. A recent article showed that Romania surpassed France as the biggest corn producer in EU this year. What are, in your opinion, the factors that contributed most to this evolution? Do you see more room for growth? PC: Romania has indeed become EU’s largest corn producer and exporter with a record 2018 harvest partly thanks to favorable weather conditions, partly thanks to technology, especially seeds technology. Nevertheless, average yields in the country remain significantly below EU average and more than 500,000 hectares are still planted with low technology seeds. Corn will certainly be the crop with the highest growth potential in the future if irrigation develops and if Romanian farmers continue to have access to the technologies they need. For example, there is no viable alternative today to CNI (chloronicotinyl insecticide) seed treatment in the fight against tanymecus (an insect that eats the corn plants in its early stages – e.n.) and it is important that Romanian farmers continue to benefit from derogations granted by the Agriculture Ministry (MADR). Losing these valuable tools would endanger the viability of corn as a crop and discourage seeds companies from producing in the country. RI: Which sector is more challenging in Romania, agriculture or pharmaceuticals and what are the main challenges? PC: The main challenge we see going forward for the development of modern sustainable farming in Romania is to guarantee Romanian farmers access to the technology they need. The debate has left the field of science on topics like CNIs or Glyphosate and has been politicized. Fortunately, Romanian authorities, as well as farmers associations like LAPAR or APPR, remain vigilant but their voice needs to be heard more loudly at EU level. I also believe that we –Bayer- as a leader need to do more to improve the understanding of modern farming, especially for urban citizens. Each sector is very challenging, having its own particularities. The pharmaceutical sector is a very sensitive topic always, with a high ranking on the public agenda. The biggest challenges in the pharmaceutical sector are: insufficient funding, access of patients to new medicines due to lack of reimbursement, predictability and transparency of decision-making process at the level of health authorities. Last but now least, the medicines pricing system in Romania favors significant parallel trade, exposing the local market to out of stock situations, at the same time being an additional limiting factor for entry of new molecules on the local market. All these challenges are then reflected on the patient who has to pay a high contribution for medicines, investigations or is unable to have access to modern therapeutic options or is even unable to find certain drugs on the local market. Responsible Self-care offers opportunities to consumers and healthcare systems alike be it globally or in Romania. This not only from a socio-economic perspective but also in empowering consumers to take responsibility for their health to lead a better life. In order for Romanians to fully harness these benefits, a further increase in health literacy among consumers and all market participants is essential. Bayer is fully committed to this cause, also as a founding member of RASCI (Romanian Association of OTC Drug Producers), which initiated the educational campaign ‘about health, with responsibility’. Interview by Andrei Chirileasa, andrei@romania-insider.com  (Photo source: courtesy of Bayer Romania)