Chairman's - FMC Corporation

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Agricultural PRODUCTS Though sales of $1,051.6 million declined 1 percent versus the prior year, earnings of $289.0 million increased 18 percent — record earnings for the seventh straight year. Growth was driven by new product introductions, particularly in North America and Brazil, improving second-half market conditions in Brazil, higher selling prices in most regions and lower raw material costs. Undoubtedly 2009 was a challenging year for the global chemical crop protection industry. A recessionary global economy coupled with tight credit markets, volatile commodity prices, less favorable weather conditions in several key markets and increased regulatory pressures all contributed to a “perfect storm” for the industry. Agricultural Products, however, managed to weather this storm better than most. 4 Favorable Long-Term Macro Trends The global crop protection industry should continue to beneft from favorable, longterm macro trends, which should provide signifcant opportunities for our continued growth. The world’s population is growing at approximately 1.7 percent per year while planted acreage is static or declining in many countries. We expect higher demand for food to be produced on a relatively fxed amount of arable land. There is an increasing demand for protein, which is being driven by rising per capita income in the world’s most populated regions. Continued growth in demand for biofuels will increase competition with food, fber, and feed for land and other resources. Given the long-term outlook for energy costs, Qun Jia, left, North China area manager, FMC Agricultural Products, and Xiaogang Gao, FMC sales representative, evaluate product trials at Northwest Agricultural & Forestry University in Shanxi Province. FMC has achieved remarkable success in North China, especially in wheat herbicides where our carfentrazone product portfolio is the market leader. With several strong positions in our focus segments around the world, Agricultural Products successfully weathered the global recession, achieving its seventh straight year of record earnings. FMC Agricultural Products Group focuses on shortening the innovation cycle by rapid development of product co-formulations and premixes for conventional and biotech crops. From left, FMC biologists Alison Burnett, F. Larry Marek and Mark Wusaty evaluate the propagation of plants to be used for the testing of experimental formulations in advanced greenhouses at the new FMC Innovation Center in Ewing, New Jersey, that opened in September 2009. biofuels should remain politically as well as economically attractive. Together these three trends are likely to drive strong agricultural commodity prices and, simultaneously, the demand for products and technologies that increase farm productivity and yields. The long-term trend is clear: strong and increasing demand by growers for products and technologies that enable yield increases in a consistently economic and environmentally sustainable way. Agility in Global Markets We are a focused competitor in the $40 billion global agricultural chemical market with several strong positions in our focus segments in North and South America, Europe and Asia. While demand is high for crop protection products, there are forces in our industry that require us to stay agile and focused — ongoing consolidation and vigorous competition; product competition from agricultural biotechnologies; and a demanding regulatory environment that
1000 800 600 400 Dollars in Millions 1200 200 0 SEGMENT REVENUE AND OPERATING EARNINGS • Acquisitions – To complement our internal initiatives, growth also will be realized through bolt-on acquisitions that are 1,058.7 1,051.6 consistent with our focus and strategy. 889.7 • Full solutions – We are expanding our Segment existing product lines to offer “full Revenue solutions” in our focus markets, including launching of co-formulations and premixes. Many of these combinations 207.0 245.2 289.0 Operating Earnings are complementary to biotech crops. • Expand and extend offerings – We 2007 2008 2009 will continue our focus on life cycle management and accessing new products and premix partners to expand and extend our offerings in our focus markets. is increasing the cost to introduce new products and keep existing products registered. Despite this competitive, challenging and dynamic industry, we believe our growth strategy is well suited to this projected environment. Future Growth Although we are likely to make mid-course corrections, the strategies that have helped us achieve seven straight years of record earnings will continue to drive our proftable growth: • Focus – We focus on key customers, markets, crops and products. Given our relative size, this is a key element of our strategy. • Global supply chain – We are now sourcing most of our products from a low-cost, virtual manufacturing operation. With a variable cost structure of approximately 95 percent, we are globally cost competitive with any of our competitors, including generic manufacturers, and relatively immune to large demand swings. • Shorter-term innovation – A few years ago, we changed our innovation paradigm by redirecting R&D spending from the discovery of new active ingredients to focusing on shorter-term innovation. This includes accessing and developing technology platforms that will enable us to differentiate existing chemistries resulting in a consistent stream of new product opportunities for our business. FMC is a major supplier of crop protection products for the Mexican vegetable market. Amy O’Shea, Mexico country manager, FMC Agricultural Products, and Martin Amigon Villenueva, pest control and disease manager for Agricola Paralelo 38, examine green peppers in Culiacan, Sinaloa, an area known for high-quality production of tomatoes, peppers and cucumbers for export to the United States. • Alliances – We are fnding and realizing strategic opportunities that enhance our long-term proftability and strengthen our strategic positions in key markets. • Our organization – Finally, and most importantly, we are developing a highly committed organization that is empowered and structured to execute on these initiatives, with agility and speed. Outlook We have set an aggressive growth strategy for Agricultural Products. In 2010, we expect to achieve record earnings for the eighth straight year. Not every opportunity we pursue will materialize and, undoubtedly, there will be challenges and obstacles along the way. However, we are confdent that through the efforts of our people, Agricultural Products will continue to fourish for many years to come. FMC has a strong presence in the rice market in India. Shown here is rice being transplanted near Ganapavaram Village in the Andhra Pradesh State. FMC Corporation | 2009 Annual Report | Agricultural Products 5
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Cash required by operating activiti
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indemnification obligations with re
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On January 19, 2009, the European C
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Environmental obligations. We provi
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Sensitivity analysis related to key
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Our debt portfolio, at December 31,
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FMC CORPORATION CONSOLIDATED STATEM
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FMC CORPORATION NOTES TO CONSOLIDAT
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NOTE 3: ACQUISITIONS 2009 Acquisiti
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MANAGEMENT’S ANNUAL REPORT ON INT
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FMC CORPORATION SCHEDULE II—VALUA
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ITEM 13. CERTAIN RELATIONSHIPS AND
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Exhibit No. Exhibit Description *10
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Exhibit No. Exhibit Description 23.
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Signature Title Date /S/ ROBERT C.
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COMPUTATION OF RATIO OF EARNINGS TO
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The Board of Directors FMC Corporat
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I, W. Kim Foster, certify that: CHI
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CFO CERTIFICATION OF ANNUAL REPORT
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Chairman's - FMC Corporation

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