THE big boys in Australia's $1.6 billion-plus agricultural chemical market may not be too happy about it, but farmers are increasingly drawn to the growing market for generic spray products.
The local market for generic off-patent farm chemicals has boomed in the past decade, stoked by a raft of new suppliers in recent years.
Generics, mostly made in Australia or in burgeoning Asian chemical production hubs, now represent three quarters of all crop protection products sold here - possibly more.
That compares with generics holding just 30 per cent of European and North American ag chemical markets.
While mainstream chemical makers are concerned about surging generic sales, quality variations and the long term squeeze on branded chemical product margins, import specialist, Titan Ag, has been working overtime to prove that good generic brands do exist and have plenty to offer.
"With China producing more than 30 per cent of the world's ag chemicals and its output now increasing by about 25pc a year, even the big western chemical companies source active ingredients from China," said Titan director, Andrew Ericsson.
"The world relies on China. The thing is to only rely on the right sources in China."
Titan was established in 2006 when Mr Ericsson, a former ag chemical buyer with farm services agribusiness, Elders, teamed up with one of the early players in the generic market, agricultural scientist, Paul Cayzer.
The new company started specifically to build a house brand product line exclusive to Elders.
Titan now has Australian registrations for more than 80 imported products sourced from 25 key suppliers in China and 10 in India.
Business turnover doubled last financial year as farmers looked for more generic options and Titan's range expanded to keep pace, including recently moving into animal health drench and pour on parasite treatments and ammonium sulphate fertiliser.
"We think about 85pc of Australia's ag chem market's products are now off-patent and most of those formulations could be available as generic lines," Mr Ericsson said.
Although not involved in Titan's day-to-day operation, Mr Cayzer's experience and contacts within the Chinese farm chemical industry, gave the new starter valuable early traction, particularly finding credible suppliers.
His chemical sector experiences have included co-founding the Farmoz import and distribution brand, now owned by Israel's big Makhteshim Agan Group, the world's largest maker of branded, off-patent crop protection products (and recently partly acquired by a Chinese chemical giant).
Mr Cayzer's son, Martin who spent 17 years in Europe and Asia in the computer software industry, now heads up much of the logistics and procurement strategy planning for Titan.
In the low-margin generic ag chemical business, the Cayzer-Ericsson partnership has managed to establish Titan Ag as a sustainable and proven low cost supplier by streamlining import and distribution "touch points" to a bare minimum.
"We've built a competitive and strategic supply chain designed to get product to the shop floor with minimal handling, but without taking shortcuts on the original quality specifications we need," Martin Cayzer said.
"When you're dealing with a listed public company like Elders you can't afford to take risks on quality."
"Both parties have done a lot of due diligence on reliability of supply, quality and price - and for us it's a big deal to ensure our product keeps it shelf space in Elders's stores," said Mr Ericsson.
While not all farm customers were interested in generic products, some were well acquainted with them and wanted "a quality house brand alternative", said Elders sales and marketing general manager, Mark Geraghty.
He said it was hard to specify how much cheaper generic products were because the whole ag chemical market had fluctuated wildly in recent years, but the price gap between branded and generics was narrowing.
"However, a few per cent's difference can be a big difference for some clients, especially if you've got a lot of cropping country to apply with herbicide," Mr Geraghty said.
"We won't drive the generic market, but the ag chem sector is reflecting a trend towards more generic labels everywhere.
"We've responded by being very careful in choosing Titan to provide the quality we want in that market segment."
To meet the trend Elders rolled out its house brand range to all its 250 outlets last year, also ramping up its agronomy field trial work to monitor the efficacy of the products and inviting Titan's directors to talk about their business and the generic industry at farmer meetings.
