Sales and product stewardship

Cheminova’s sales in 2007

Cheminova’s sales of plant protection products include supplies of both active ingredients and ready-for-use formulations to more than 100 countries. In 2007, Cheminova’s subsidiaries handled approx. 85% of sales, which is on a par with 2006.

The distribution by product type and country is largely the same as last year. The relatively higher share of sales in higher middle income countries is primarily due to the fact that Brazil now belongs in this category.

For further comments on sales, please refer to Auriga’s annual report.

Sales by product type 2007                Sales by product type 2006

Sales by geography 2007                   Sales by geography 2006

Sales broken down by rich and poor    Sales broken down by rich and poor

countries 2007                                   countries 2006

2007: Sales broken down by rich and poor countries (breakdown according to the World Bank’s categories of gross national income per capita: Low income USD 905 or less p.a.; lower middle income USD 906-3,595 p.a., higher middle income USD 3,596 - 11,115 p.a., higher income USD 11,116 or more p.a.).

2006: Sales broken down by rich and poor countries (break-down according to the World Bank’s categories of gross national income per capita: Low income USD 875 or less p.a.; lower middle income USD 876-3,465 p.a.; higher middle income USD 3,466-10,726 p.a.; higher income USD 11,116 or more p.a.).

Sales of the most toxic products

The most toxic products are those which, according to the WHO classification (The WHO Recommended Classification of Pesticides by Hazard and Guidelines to Classification 2004), fall into class Ia “extremely hazardous” and class Ib “highly hazardous”.

The active ingredients which fall into this category are methyl parathion, monocrotophos, DDVP and triazophos, which are produced by Cheminova, as well as methamidophos, carbofuran, methomyl and fenamiphos, which are third-party products sold by Cheminova in the form of formulations, i.e. ready-for-use products.

WHO classification of pesticides based on acute risk
Class Ia	Extremely hazardous
Class Ib	Highly hazardous
Class II	Moderately hazardous
Class III	Slightly hazardous
U	Unlikely to present acute hazard

The active ingredients methyl parathion and carbofuran are included in both class I and class II formulations, while the ready-to-use triazophos products are only class II formulations. Cheminova’s phase-out concerns class I ready-to-use products in countries outside the US, Canada, Australia, Japan and the EU. In 2007, total sales of class I products accounted for about 5% of revenue and were thus on a par with 2006.The breakdown of products by country can be seen in the table below. The new class I products mentioned in the table all belong to countries which are not covered by the phase-out programme.

Overview of which class I ready-to-use products Cheminova were sold in 2007 and where
Country	Product
Australia	Methyl parathion EC Methomyl EC
USA	Methyl parathion EC
Mexico	Methyl parathion EC Methamidophos EC Methomyl SP*
Colombia	Methyl parathion EC Methamidophos EC Monocrotophos SL Carbofuran SC**
Brazil	Methyl parathion EC Methamidophos SL
Argentina	Methamidophos EC
Spain	Fenamiphos EC Methomyl EC
Taiwan	Methyl parathion EC*
India	Monocrotophos SL DDVP EC Phorate GR
* products which were phased out during 2007.  ** phased out and not sold in 2007.  EC = Emulsifiable Concentrate; SP = Soluble Powder; SL = Soluble Liquid; SC Suspension Concentrate.

Product stewardship

The underlying principle for Cheminova’s stewardship of plant protection products is risk reduction. Here, the cornerstones are:

Legislation

Cheminova complies with national legislation in all the countries where Cheminova’s products are sold. A key element is that Cheminova only markets products for which marketing permission has been obtained in accordance with local rules as well as the rules outlined in the Rotterdam convention concerning “Prior Informed Consent”, which are also contained in EU legislation and which regulate the export of specific chemical substances.

FAO’s Code of Conduct

In 2007, the FAO’s Code of Conduct was formally implemented in all the subsidiaries’ management principles. The FAO’s Code of Conduct specifies standards which purport to reduce the risks involved in distributing and using plant protection products.

Phase-out of the most toxic substances

Cheminova’s phase-out plan relates to ready-to-use products which fall under the WHO classes Ia and Ib, i.e. products which are classified as “extremely hazardous” and ”highly hazardous”, respectively.

The phase-out plan has been acknowledged by the FAO, which in its report from the “1st FAO/WHO joint meeting on pesticide management and 3rd session of the FAO panel of experts on pesticide management 22-26 October 2007” has found reason to draw attention to Cheminova’s plan as a concrete initiative from the pesticide industry aimed at reducing the availability of the most toxic substances in developing countries.

Cheminova’s phase-out plan
Country	Product	Phase-out year
Mexico	Methyl parathion EC (class I) Methomyl SP (class I) Methamidophos EC (class I)	2009 2007 2009
Brazil	Methyl parathion EC (class I)  Methamidophos EC (class I)	2010 2009
Colombia	Methyl parathion EC (class I)  Monocrotophos SL (class I)  Methamidophos EC (class I)  Carbofuran SC (class I)	2009 2009 2009 2007
Taiwan	Methyl parathion EC (class I)	2007
Cuba	Methyl parathion EC (class I)	2009
Argentina	Methamidophos EC (class I)	2009
India	Monocrotophos SL (class I)  DDVP EC (class I)  Phorate granulate (class I)	2009 2010 2009
EC = Emulsifiable Concentrate; SP = Soluble Powder; SL = Soluble Liquid; SC = Suspension Concentrate.

Meeting targets

In 2007, we focused on reducing the risks associated with handling the most toxic of our products. The targets which have been achieved for specific activities as shown in the CSR report 2006 can be seen under “Status for individual countries” on page 16.

Progress in the Indian project for developing a class II formulation of monocrotophos and the Brazilian campaign to encourage farmers to use personal protection gear is described in the article below.

Phase-out according to plan

In last year’s CSR report, we published a detailed country-based plan for phasing out WHO class I products. In 2007, we had planned to phase out the sale of three products in three countries, so that these products are no longer included in Cheminova’s list of sales products in 2008. This has been effected. The products methomyl, carbofuran and methyl parathion are no longer part of the product programme in Mexico, Colombia and Taiwan, respectively.

Implementing stewardship guidelines

The managements of all the subsidiaries as well as Cheminova’s sales organisation in Denmark have approved a set of stewardship guidelines which, among other things, require compliance with the FAO’s Code of Conduct and the phase-out of the most toxic products – WHO class I products – in specified countries according to the schedule we published last year. Moreover, the guidelines oblige all the subsidiaries to join local industrial organisations for which user safety and complying with the FAO’s Code of Conduct are part of their principles.

Less toxic alternatives

The work to develop a WHO class II monocrotophos product is going according to plan at our Indian subsidiary. The project is described in the article below. Moreover, Cheminova’s global development activities include a number of projects aimed at introducing new and less toxic products.

Labels

All labels on WHO class I products in all packaging sizes which are sold by Cheminova have been checked. It has been confirmed that, as far as Cheminova’s own products and third-party products are concerned, the labels carry warnings, hazard symbols, first-aid information and instructions for use. With regard to products sold outside the USA, Australia and Europe, the labels also carry pictograms which, by means of simple drawings, support the safety instructions. 

Labelling policy: The work on preparing general internal guidelines on labelling started but was not completed in 2007 as planned. The final presentation of this policy has been waiting for a new regional sales structure to be decided, which is being implemented in 2008.A global labelling policy will be prepared in 2008.

Laboratory animals

To avoid repeating tests which have already been conducted and consequently the unnecessary use of laboratory animals, a policy has been implemented which to the widest possible extent aims to ensure that the rights to existing test data are purchased. Documentation in the form of such test data for vertebrates is a precondition for having the products approved by the authorities before marketing commences.

Development of new class II formulation of monocrotophos in India   Satisfactory progress in the development of less toxic formulation.   Today, monocrotophos is marketed as a liquid concentrate which needs diluting with water before use. The product is a WHO class I product (highly hazardous product) because of its acute toxicity. Consequently, the product is included in Cheminova’s phase-out programme for the most toxic plant protection products. Last year, it was announced that Cheminova India had initiated a project which was aimed at developing a less toxic formulation to replace the class I product.   In the early development stages of the project, it has been possible to produce a new formulation based on innovative technology. The character of the monocrotophos molecule and the warm and humid environment in which the formulation needs to be stable have made it a particularly challenging task to develop a granular product with the required properties. A high-quality granular formulation must be uniform, low odour and easily soluble in water with minimum deposition of carriers in the spray tank to ensure the spray liquid does not block the spraying equipment.   Toxicological tests performed by two independent laboratories have confirmed that it is a less toxic product: WHO class II.   The first field trials in rice and cotton have shown that the product is just as efficacious as the old formulation. Further tests of efficacy and environmental parameters are being performed, and it is expected that the required data can be submitted to the regulatory authorities according to plan.       The product’s properties are documented through field trials. Here, its effect against harmful insects in cotton is studied.

Campaign to promote use of protective gear in Brazil   In 2007, Cheminova’s subsidiary in Brazil launched a national campaign to promote the use of personal protective gear. At all agricultural fairs and “field days” where Cheminova was represented, focus was on user safety. The campaign has been run under the slogan “Protective clothing or hospital admission – the choice is yours”, and followed up with a brochure contain-ing detailed instructions and illustrations showing that protective clothing is a basic require-ment in a number of situations.   Likewise, a DVD has been produced with the same message as well as more detailed and user-friendly instructions. The material is being actively used at all Cheminova’s sales events, and considerable interest has been shown by farmers and distributors in the business. The campaign continues in 2008, when Cheminova’s DVD will also be made available to training institutions.        Printed matter such as posters and brochures are important media in the campaign.

Status regarding individual countries

Mexico Sales of the product methomyl have been discontinued in accordance with the phase-out plan. Supplies of methyl parathion class I products in small containers have been discontinued, as sales of this product are limited to distributors in the northern part of the country where farming is dominated by professional farmers. The product methamidophos is also being sold within a similar geographical boundary. Industrial sales of technical methyl parathion are restricted to companies that manufacture class II products such as low-concentrate powder formulations.

Cuba In 2007, Cheminova sold no methyl parathion to Cuba. Cheminova has not managed to conduct negotiations with the Cuban authorities with the aim of replacing methyl parathion with less toxic alternatives. However, with the kind assistance of Danish occupational health and safety doctors (from the organisation ICOEPH, International Centre for Occupational, Environmental and Public Health), contact has been established with the National Institute of Occupational Health in Havana, which we hope can influence the process of replacing methyl parathion with less toxic alternatives.

Colombia The company CropTech, in which Cheminova holds a majority interest, is in future participating on an equal footing with other subsidiaries in Cheminova’s stewardship activities. Class I products based on carbofuran were phased out during 2007 in accordance with the plan. Efforts are being made to supply the market with less toxic alternatives. Generally, the Colombian market participates in a number of Cheminova’s development projects concerning new, less toxic, generic products.

Brazil Supplies of class I products in small containers have been discontinued, and sales of these products are limited to states where farming is dominated by professional farmers. The product approvals for class I products have been withdrawn in states where the working conditions in farming are more underdeveloped. In 2007, Cheminova launched a national campaign aimed at promoting the use of the right protection gear in the form of personal protective gear. Providing training in correct product use is still an integrated part of the marketing efforts. Here, the efforts of technical employees as well as those of the sales personnel are regularly reported and assessed. Cheminova is committed to an eradication programme where a class III product is used rather than the toxic class I products for eradicating boll weevil. This activity is being extended in 2008 with a sponsorship for the programme in the state of Goias.

Uruguay Cheminova does not sell class I products to farmers in Uruguay. The manufacturer of a low-concentrate powder formulation of methyl parathion (WHO class II) has agreed to furnish the product labels with pictograms. This will be followed up on in 2008.

Argentina Cheminova’s only class I product is sold exclusively in 20-litre containers, the preferred container size of professional farmers. Information on the safe use of the product is an integrated part of the marketing efforts. We are starting to phase out metal cans in favour of plastic containers, which can be directly disposed of via one of the trade organisation’s subsidised collection and recycling schemes for used pesticide containers.

India Work on developing the less toxic solid formulation of monocrotophos is going according to plan, as described elsewhere in this report. Considerable training is still being provided regarding safety and the correct use of Cheminova’s products, with 114,000 people being instructed in connection with product marketing during the year.

Taiwan As of the end of 2007, methyl parathion has been phased out, so that in future Cheminova only sells the less toxic micro capsule formulation in Taiwan. After this, Cheminova sells no class I products on the Taiwanese market.

Targets for 2008

• Preparing a global labelling policy concerning the products which are marketed under the Cheminova trade marks.
• Introducing a system to document that information about safety issues and using products according to the rules is an integrated part of the sales and marketing initiatives.
• Integrating product stewardship activities in Cheminova’s new regions under which the present subsidiaries belong, so that the division of responsibility reflects the new organisation.
• Continuing phase-out plan for the most toxic products.