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Hungary's Pesticide Industry produces the fluorinated pesticides: Benefin (BENFLURALIN); Flufenzin; Fluometuron; Trifluralin. Hungary's pesticide industry includes partnerships with DuPont, Rhone Poulenc, and the American CEDAR group. February 2000.


http://www.ikm.iif.hu/english/economy/industr/novszer.htm

Hungary: Ministry of Economic Affairs

Pesticide Production

February, 2000

The position of pesticide production in the chemical industry

With regard to product groups of higher production volume, the production structure of the chemical industry did not change significantly in 1998-1999 as compared to the previous year. The biggest share in the industry is almost equally taken by petroleum refining and the production of plastics and rubber (1/3 – 1/3), while pharmaceuticals represent 15-16 per cent, and the rest of the production is taken by pesticides and detergents.

The change of the volume index
of the chemical industry branches
(1998/97)

Branch of production Output Exports

Petroleum refining

112.8 101.8

Plastic base materials

95.2 103.4

Pesticides

43.9 33.3

Pharmaceuticals

90.7 83.4

Cosmetics and household chemicals

110.2 106.9

Rubber and plastic products

119.2 106.3

Source: Hungarian Chemists' Journal, 1999, Vol. 5

The above figures show that between 1997-1998 the production and exports of pesticides decreased the most in volume, consequently, the production of this sub-sector continued to have less significance within the chemical industry.

Production of pesticides in Hungary

In the past years, starting from the early sixties, the development of pesticide production in Hungary was determined by efforts aiming to increase agricultural output and to diminish the imports of pesticides. Until the mid-seventies and late seventies, the development of this segment was greatly promoted by the Government's decision to encourage the satisfaction of domestic demand from an ever-wider range of domestic production. Moreover, the administration at that time supported the satisfaction of the demand of the former COMECON market by investments aimed at the expansion of production capacities.

As a result of state subsidised developments starting in 1981 and Soviet exports under the long-term Hungarian-Soviet Agrochemical Agreement that was in effect between 1976 and 1990, extensive pesticide producing capacities were established in Hungary. Although these capacities were significant even in international terms, they proved to be competitive only in the case of a few products, such as thiolcarbamates, acetochlor and benomyl. Hungary owned capacities to manufacture about 60,000 tonnes/year of active agents of pesticides and in 1992 the country still ranked 20th among the leading pesticide producers of the world. This means that Hungary's chemical industry was able to produce sixty out of the 200-210 most important active agents of pesticides produced world-wide.

Initially, granulating capacities based on imported active agents were developed. Later, as a result of developments aimed at reproducing and imitating other products, the production of several active agents was started. This facilitated exports, in addition to fulfilling domestic demand.

Major features of the Hungarian pesticide market

Until 1989, Hungarian pesticide production increased very dynamically in terms of the value of output – its growth was 2.7-fold between 1960-1970, 8-fold between 1970-1980 and 2.3-fold between 1980-1989. In 1990, the volume and value of production dropped considerably. The negative trend continued over the following years, though at a declining pace.

According to the figures of the Central Statistical Office (KSH) in the following table, the production and sales of pesticides increased slightly at current prices between 1995 and 1997, however, in 1998 it saw a significant drop.

The main figures of pesticide production between 1995-1998

  Value of output (HUF billion)
1995 1997 1998

Production

18.2 21.4 10.9

Sales

18.1 21.3 11.5

of which: domestic

7.9 10.1 6.9

Exports

10.2 11.2 4.6

It can be seen that the volume of production and sales, in terms of current prices, continued to grow until 1997 as compared to the bottom value, but declined considerably in 1998. This was mainly due to the unfavourable development of Hungarian agriculture, but also to the shrinkage of export markets. Moreover, the liquidity problems of agricultural producers resulted in diminishing solvent demand in the domestic market.

This is also supported by the fact that the total size of land treated with pesticides in 1997-98 was below the 1995 figure, although the size of total agricultural territory increased to a small degree. Owing to the adverse meteorological conditions, floods and inundation in 1999, the size of arable land got further reduced, resulting in an obvious fallback in pesticide utilisation.

It is worth mentioning, however, that according to KSH data published in "Production of the Major Industrial Products" the volume of output in 1998 was 18.1 tonnes, while total sales amounted to 13.3 tonnes. The discrepancy may be caused by the fact that the breakdown of data by products include "other agrochemical products", as well, as required by the BTO classification. The difference between data based on the TEçOR and BTO classification, respectively, is caused by the different methodology.

Due to fierce import competition, the ratio of Hungarian-made products declined in total pesticide utilisation. Within total imports the ratio of granulated finished products increased the most, and commissioned work in the field of granulating represented got more widespread.

Foreign trade in pesticides

In terms of turnover value, the foreign trade balance of this product group shows a growing deficit, however, on the basis of volume data the balance saw surplus for the first time in 1997, and this tendency continued in 1998.

The table below indicates that the value and composition of the Hungarian exports are of substantially lower quality and technical standard than that of imports, and that this trend has not changed in the past years.

Also, the terms of trade were rather unfavourable in the foreign trade turnover of this product group in the past few years.

Foreign trade turnover

  1995 1997 1998
Value (USD thousand)

Exports

68,446 58,928 47,563

Imports

103,195 118,484 124,373

Balance

-34 ,748 -59,556 -76,810
  Volume (tonnes)

Exports

9,567 30,109 28,800

Imports

21,827 18,631 18,654

Balance

-12,261 11,476 10,146
  Average price (USD thousand/ton)

Exports

7.15 1.96 1.65

Imports

4.73 5.49 6.67

Source: KSH

Almost 80 per cent of all foreign pesticides, imported to Hungary from 30-35 countries, is produced in six countries – in 1998 the country bought pesticides from France (in a value of USD million 28.7), Germany (USD million 21.8), Switzerland (USD million 14.3), Italy (USD million 11.9), USA (USD million 10.8) and Belgium (USD million 10.6) – meaning that imports are rather concentrated in terms of supplier countries. This is not the case as regards exports, as the same share is taken by twelve countries. In 1998, exports were predominantly geared towards Poland (USD million 7.5), Russia (USD million 5.9), France (USD million 5.3), Ukraine (USD million 3.1), Germany (USD million 2.4) and Italy (USD million 2.2), with the Czech Republic, Bulgaria, the USA and Thailand being also significant targets of Hungarian exports.

Out of the several hundreds of Hungarian companies importing pesticides, the following ones were the most important in terms of turnover value: Novartis Hungaria Kft, Zeneca Hungary Kft, Conoco Hungary Kft, Basf Hung‡ria Kft, Agrevo Hungaria Kft, Rhone Poulenc-Agro Borsod Kft, Cynamid Hungary Kft, Bayer Hungaria Kft, Dow Hungary Vegyipari Kft, and the Monsanto Kereskedelmi Kft. These leading companies accounted for 70 per cent of the import turnover of pesticides. Almost every major foreign pesticide producer is present in the Hungarian market through a company or a representative office managing imports and domestic distribution.

In 1998, the most important Hungarian companies exporting pesticides – in total there were over one hundred – were as follows: Chinoin Rt, Chemark Kft, Unilever Hungary Kft, NitrokŽmia 2000 Rt, Chemol International Kereskedelmi Rt, NitrokŽmia Vegyipari Rt, Alkagro Kft, Richter Gedeon Rt, B‡bolna Kšrnyezetbiol—giai Kšzpont Kft and Budapesti Vegyimõvek Rt. The above companies covered almost 90 per cent of the export of pesticides.

Domestic producers and distributors

In Hungary, about 13 companies are involved in the production of pesticides, the majority of production, however, is related to five companies: Chinoin, NitrokŽmia, Alkagro, Rhone-Pulenc-Agro Borsod and Budapesti Vegyi Mõvek. The two pharmaceutical companies previously involved in the production of pesticides, Richter Gedeon (lenacil - Adol) and Alkaloida (gliphosate - Glialka) stopped manufacturing pesticides, thought the latter of the two manufactures pesticides under commissioned work schemes, similarly to the limited liability companies operating at the premises of ƒszak-magyarorsz‡gi Vegyimõvek.

Major companies and their main products

Chinoin Gy—gyszer Žs VegyŽszeti TermŽkek Gy‡ra Rt. benomyl - Fundazol, Carbendazim - Kolfugo, beta-cipermethrine - Chinmix, permethrine - Chinethrine, tetramethrine - Chinetrin, cipermethrine - Cyperil, Carbofuran - Chinufur, flufenzine - Flumite 200 (the latter product is made of the original active agent developed by the company, and was put on the market in 1996).

Due to rationalisation of its profile, Chinoin had already years ago initiated the sale of its pesticide producing plant in NagytŽtŽny. Following a long period of preparatory talks with several interested companies, it was bought by Riegel Invest Kft, a company set up by Hungarian investors. The company exports to 30 countries and has business relations with several leading partners, including the Du Pont concern. It has entirely preserved the former plant's activities, developments, products (Fundazol 50 WP, Flumite 200) and their distribution.

NitrokŽmia Vegyipari Rt. Acetochlor - Acenit, Erunit, Alachlor - Flexenit, Propizochlor - Proponit, 2,4-D - Dikamin, EPTC - Niptan, Diuron - Lucenit.

NitrokŽmia 2000. Rt. – Last year the company completed an investment of HUF 400 million, producing, among other things, base materials for pesticide production.

At the end of 1998, the company obtained the MSZ EN ISO 9001 certificate for the development and production of pesticides and its intermediates. Certified by SGS, NIKE 2000 Rt. ranks among the first 6 Hungarian distributors of pesticides and is market leader in the production of weedkillers used in corn cultivation.

ƒszakmagyarorsz‡gi Vegyimõvek Rt. alachlor - Satoklor, propachlor - Satecid, fenuron, diuron, fluometuron, EPTC - Alirox, Witox, butilat - Anelda, cikloat - Sabet, molinat - Sakkimol.

Rhone-Poulenc-Agro Borsod Kft. efozit-Al+ copper(II)-oxychloride - Mikal, Aliette, iprodion - Rovral, Cuprosan.

Budapesti Vegyimõvek Rt. trifluraline - Olitref, benefine - Flubalex, Aktinite - Hungazin, seed treatment agents.

In the product structure and sales turnover of BVM Rt. a significant role is played by the production of active agents of pesticides and the manufacture of the products. The company's latest research, "Development of liquid fungicide pesticides containing contact active agents" has been aimed at the development of products that would combine the pesticide agent and the plant-based intensifier agent in one product.

As part of the co-operation between BVM Rt. and ƒszak-magyarorsz‡gi Vegyimõvek Rt, the two companies issue a joint pesticide catalogue. As it is known, BVM Rt. owned part of ƒMV Rt., and though it sold its share in the latter company to the American CEDAR group, the two companies maintain close relationship.

At the audit of the end of 1999, the quality assurance system of BMV Rt. was found to comply with the requirements of the ISO 9001 standard. The certification of its Environmental Management System is planned to be carried out in the spring of 2000.

Due to the adverse market situation, BVM Rt. stopped pesticide production in one of its older plants (situated on KŽn street) in the autumn of 1999.

AgrokŽmia Rt. dodine - Efuzin, Vazeline - Agrol Plus.

Agroterm Kft. Bordeaux mixture, sulphur - KŽnkol, copper(II) - oxychloride + zineb - Miltox, copper(II)-oxychloride, metam-ammonium - Ipam.

Ownership structure, foreign investors

With the exception of NitrokŽmia Rt., all producers are privately owned companies. In addition to pesticides, NitrokŽmia produces, among others, organic compounds (phtalic anhydride, fumaric acid, iron fumarate, glycine and glycine ester, monochloracetic acid, chloro-acetyl-chloride, nitrobenzene, sulphanilic acid, dimethyl phosphite), unsaturated polyester resin, ion exchange resin and nitrocellulose. ƒszak-magyarorsz‡gi Vegyimõvek (ƒMV) is 100 per cent owned by Tri Chem Kft. Besides pesticides, the company manufactures intermediates for pesticides and pharmaceuticals, and has significant production capacities and advanced infrastructure.

Chinoin Gy—gyszergy‡r is in the majority ownership of Sanofi. Rhone-Poulenc-Agro Borsod Kft. is the successor of the pesticide production division of Borsodchem. The majority owner of the company is Rhone-Poulenc Agrochimie. Budapesti Vegyimõvek (BVM) is now 51 per cent owned by its employees (ESOP). Besides producing pesticides, inorganic compounds (sodium hydroxide, hydrochloric acid, hypo) and fertilisers, organic intermediates such as 3-nitro-4-chloro-benzoic acid, 3-amino-benzotrifluoride, 4-chloro-3,5-dinitrobenzotrifluoride, 2-chloro-propionic acid provide a major part of their production. AgrokŽmia and Agroterm are also privately owned.

Future opportunities in the production of pesticides

Because of the drop in the production and use of pesticides in Hungary, idle production and granulating capacities are available. NitrokŽmia has capacities suitable for the production of aromatic nitrocompounds, chlorinated acetic acid derivatives, glycine, phtalic anhydride. ƒMV has capacities for aromatic nitration, capacities for the production of aromatic isocyanates and chloro-aceticacid esters, thiocarbamates via phosgene. BVM has nitration and hydrogenation capacities suitable for the production of toluene derivatives chlorinated/fluorinated in side chain.

It is primarily companies under Hungarian majority control that make efforts to attract foreign partners with extensive financial resources. Opportunities for co-operation exist in the areas of research and development, marketing, joint production or commissioned work.

The GLP-accredited Toxikol—giai Kutat—kšzpont (Toxicology Research Centre) of VeszprŽm, a company in US ownership with an advanced background infrastructure, accepts orders for toxicological analyses of international quality but at prices much below the Western level.