Good morning and welcome to this investor technology update for FMC Corporation. This event is being recorded and all participants are in a listen-only mode. Should you need assistance, please signal conference specialist by pressing the star key followed by zero. After today's prepared remarks, there will be an opportunity to ask questions. To be placed in the Q&A queue, please press the star key followed by one at any time. If you're using a speakerphone, please pick up your handset before pressing the keys. I would now like to turn the conference over to Mr. Michael Wherley, Director of Investor Relations for FMC Corporation. Please go ahead.
Thank you and good morning, everyone. Welcome to FMC Corporation's investor technology update. Joining me today are Mark Douglas, President and Chief Executive Officer, Andrew Sandifer, Executive Vice President and Chief Financial Officer, Dr. Kathleen Shelton, Vice President and Chief Technology Officer, and Diane Allemang, Vice President and Chief Marketing Officer. Following prepared remarks from Mark and Kathy, we'll have a short Q&A session with those two executives only. Then Diane and Andrew will have more prepared remarks followed by a longer Q&A session with all four executives. Today's slide presentations are available on our website, and the prepared remarks from today's discussion will be made available after the call.
Let me remind you that today's presentation and discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including but not limited to those factors identified in our earnings release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's understanding. Actual results may vary based upon these risks and uncertainties. Today's discussion and the supporting materials will include references to adjusted EPS, adjusted EBITDA, free cash flow, and organic revenue growth, all of which are non-GAAP financial measures. Please note that as used in today's discussion, earnings means adjusted earnings and EBITDA means adjusted EBITDA. A reconciliation and definition of these terms, as well as other non-GAAP financial terms to which we may refer during today's conference call, are provided on our website. With that, I will now turn the call over to Mark.
Thanks, Michael. Good morning, everyone, and thank you for joining us. As you may recall, we had planned to hold an Investor Day earlier this year at our Stine Research Center in Delaware. Unfortunately, due to COVID-19 and restrictions on large gatherings, we had to postpone that event. At some point in the future, we look forward to inviting you to our R&D campus where you'll meet FMC's world-class team of scientists. Our researchers are developing some of the most advanced technologies in the ag industry, and we would like to offer you the opportunity to see these products up close and to tour our facilities. We'll spend the next two hours updating you on our R&D progress.
This will include a review of our new product pipeline, what you can expect from our portfolio in the coming years, and a discussion of new investments and partnerships that are broadening our technical capabilities. While not quite the same as an in-person experience, I think you will find today's session highly informative. Following my opening comments, I'll turn the floor over to Dr. Kathleen Shelton. She will review FMC's R&D strategy and provide an update on our synthetic and biological pipelines. Kathy will also discuss our new external collaborations that augment our in-house capabilities. Diane Allemang will highlight recent and soon-to-be-launched products. She will also provide an update on major new compounds that are planned to launch during this decade, highlight expected revenue contribution from new active ingredients, and discuss how we model the value of our pipeline. Finally, we'll conclude today's presentations with remarks from Andrew Sandifer.
He will discuss the financial impacts of our technology investments over the next several years. Andrew will also update you on our financial policies, cash generation, and cash deployment priorities. Society is facing monumental challenges. Demand for protein, food, and feed are rising every year as the world population grows. Farmers are constantly searching for new technologies that can help them produce more crops on the same or less farmland. These are difficult challenges presented on a backdrop of significant environmental concerns for biodiversity and climate change. According to a recent World Economic Forum report, environment-related risks now rate the highest in terms of their impact and likelihood to affect the world's economy. Earlier this year, the UN World Food Program warned that an additional 130 million people could face acute food insecurity by the end of 2020.
That raises the total number of people worldwide facing hunger to 265 million. These are sobering statistics for crop protection companies. Expectations are high for meaningful commitments in sustainable agriculture. Investors, customers, and employees want to invest in, do business with, and work for companies that are socially progressive, committed to protecting the environment, and willing to take bold actions. At FMC, we couldn't agree more. Sustainability is integrated throughout our enterprise, including in R&D, and you will hear more about this from both Kathy and Diane. We've set a high bar for sustainability with new targets that further reduce our environmental footprint, improve our industry-leading safety performance, and commit more R&D spending, 100%, on developing technologies that are better for the planet than the current products in the marketplace.
Under the framework of ESG, we are looking beyond environmental targets by broadening investments in social and governance areas, including diversity and inclusion, racial and gender equity, transparency, and risk management, to name but a few. A few weeks ago, we further elevated sustainability at FMC by naming the company's first Chief Sustainability Officer. Karen Totland is transitioning from her role as Vice President of Procurement, Sustainability, and Global Facilities into this new executive role beginning January the 1st. Under her guidance since 2013, we have advanced our sustainability programming, goals, and stakeholder engagements. Karen will broaden our strategy, expand its scope, and ensure our sustainability efforts around the world are delivering real impact for FMC, our customers, and society.
Turning to our R&D pipeline, which just received top honors at the prestigious Crop Science Forum and Awards two weeks ago, we have more than 35 new synthetic and biological active ingredients currently in discovery and development. All have unique properties that address major grower challenges, including better resistance management, improved application timing windows, and enhanced residual control, to name a few. Many also feature new modes of action. The 11 molecules in development today are expected to contribute between $1.8 billion and $2.1 billion in additional revenue by 2030. Peak sales for these molecules are forecasted to be in the range of $2.5-$3 billion. Diane will describe how we assess the financial value of our molecules in development. Ag technology is evolving with new and potentially disruptive opportunities coming from unconventional places.
We are broadening our investments to ensure we have access to innovation that augments our capabilities or extends our business into new areas of opportunity. In June, we launched a new venture capital arm focused on strategic investments in startups and early stage companies, primarily in areas such as artificial intelligence, biopesticides, precision agriculture, and emerging business models. FMC Ventures makes early-stage investments that provide us a better view of where crop protection, biologicals, and precision ag markets may be heading. You'll hear more from Kathy about several initial investments and collaborations. In precision agriculture, we've taken a deliberate, focused approach in what is a very diverse and fragmented space. Our precision ag team is highly focused on crop care. This past spring, we launched Arc Farm Intelligence, the first mobile platform in agriculture with technology that provides growers real-time data and predictive modeling of pest pressure.
Predicting pest pressure with high accuracy before it impacts a grower's crop provides significant benefits, including the ability to better manage infestations before they escalate, supporting more targeted spraying at the right time, and delaying pest resistance through more effective application schedules. We have seen significant development and expansion of our platform's capabilities, and interest from customers has exceeded our expectations. Kathy will provide more details about Arc Farm Intelligence in her remarks. Finally, I will comment briefly on our five-year long-range plan. We are tracking well against the key targets as we conclude our second year. On an organic basis, we are significantly outperforming our original revenue growth target of 5%-7%. On an as-reported basis, we expect to deliver revenue growth of 5.3% through the first two years of the five-year plan. We are also delivering on EBITDA growth.
At the conclusion of year two, we expect to deliver more than half our original 300 basis point target for EBITDA margin expansion. At the midpoint of our 2020 guidance, we expect EBITDA growth of 8.5% over the first two years of our plan, despite cost increases in 2019 and significant FX headwinds in 2020. We have also made strong progress on free cash flow generation. This has received significant management focus. FMC officers and key leaders have elements of their long and short-term compensation tied to free cash flow improvements. Andrew will discuss the major drivers of free cash flow conversion, as well as other details about our financial priorities in his remarks. And with that, I'm pleased to now turn the program over to Kathy Shelton.
Thanks, and good morning. As Mark noted, COVID interrupted our plans for a live investor event at our Stine Research Center in Newark, Delaware. We look forward to hosting you in the future when you can meet our scientists and see our technologies up close. While coronavirus has affected everyone's lives, it has not significantly impacted our research efforts. To date, we've produced and shipped nearly 6,000 samples around the world from our Stine site. This includes almost 4,000 shipments for the U.S. field needs early in the COVID pandemic. In the region, we have completed our planned field programs, over 10,500 so far this year. As of July, our Stine laboratories have been operating at full capacity, and our R&D sites around the world are open and operating with appropriate wellness and safety measures in place.
This morning, I'll provide an update on our synthetic and biological pipeline, including significant progress in advancing key molecules through our stage gate process. I'll review key active ingredients in development that we're preparing for launch. And finally, I'll conclude with an overview of our precision ag platform and how we are broadening FMC research through strategic investments and partnerships. Our technology organization is driven by a set of priorities that guide how we approach our mission every day. Foremost is anticipating grower needs, translating their needs into potential market opportunities, and directing our research to create new sustainable products that address those opportunities. FMC innovation centers around the world ensure we understand local needs in every key market. We focus on synthetic and biological crop protection chemistry. We're developing a diversity of technologies to give farmers a choice for what they want and need.
We're not the largest ag R&D organization, but we are one of the best. Our pipeline is highly valuable because we're biased for new modes of action. FMC scientists are passionate about discovering new molecules that will become technical and commercial winners. We also believe every product must meet the sustainability expectations of key stakeholders. We're guided by FMC's sustainability goals to dedicate 100% of R&D investments to develop more sustainable products. We are increasing our impact through precision agriculture technology, including a new predictive insect modeling platform that helps growers more precisely apply crop protection products. Lastly, we use external collaborations, partnerships, and investments to enhance the diversity of our research efforts. We have invested in and partnered with companies that are complementary to our own efforts. I'll describe some of those at the end of my remarks.
In recent years, we've sharpened our focus on bringing sustainably advantaged technologies to market. To help achieve this, we use the FMC Sustainability Assessment Tool. This tool, along with other stewardship processes, helps ensure we develop and commercialize sustainable solutions for growers. Assessment questions compare our product to a benchmark product already in the market. Results are indicated in a sustainability matrix diagram, similar to the one on this slide. We assess six global challenges most relevant for agricultural production. A product is considered sustainable if its score is better than the benchmark in at least one area, but it cannot retreat in any other area. FMC was recognized with an American Chemistry Council award in 2019 for this tool, and we've since shared it with other companies. Turning now to our pipeline. Early, high-risk research takes place in discovery on the left side of this graphic.
It's where we identify and create new molecules the world has never seen to control pests that challenge growers. We focus on molecules that can meet future registration requirements and criteria for a successful, competitive commercial product. We screen more than 60,000 compounds annually. We identify so-called hits at the beginning of our pipeline process. A hit is a molecule with biological activity that fits a market need. We'll then make thousands of analogs of that molecule during discovery, measuring the activity and attributes of these new molecules against objective criteria. Our pipeline is managed through a stage gate process. We advance a molecule only when it meets a gate's objective criteria. Progressing a synthetic molecule through discovery takes about two to four years. For biologicals in discovery, the process is slightly shorter. Successful molecules will progress to the development pipeline. Before this move, a molecule must meet multiple criteria.
Most importantly, can it be a successful commercial product? Our goal is to advance one new molecule from discovery to development annually, a milestone we track carefully. Last year, we progressed three. The development pipeline on the right has its own set of gates where product offerings are defined, regulatory studies are conducted, sustainability assessments are performed, formulations for specific crops and regions are created, and the product is prepared for commercial launch. According to Phillips McDougall, research companies like FMC spend about $260 million throughout the entire process for a single synthetic molecule. This includes discovery and the development stages leading to commercial launch. In total, it takes 10 to 13 years. Earlier this month, we were recognized with the Best Pipeline at the Crop Science Forum and Awards, our second Best Pipeline win in three years. We are very proud of this external recognition.
Let's take a closer look at each pipeline, starting with synthetic discovery. This graphic shows our discovery pipeline with 19 lead areas in synthetic chemistry. We have broadened this pipeline over the last few years, especially in fungicides. Most feature new modes of action and target various key crops. We're also excited about strengthening other areas of the pipeline with new classes of chemistry that address specific grower needs. Molecules in discovery feed our development pipeline. If they successfully pass our stage gate, they will eventually become the next generation of products driving FMC's growth. We update our performance screens biannually to ensure new compounds in discovery will fit a market need. For example, as different weeds gain resistance, we'll validate those targets and add them to our performance screening to ensure we can effectively control those resistant weeds.
We advance new molecules that demonstrate a clear differentiation in biological control in a major market compared to competitors' products. Turning to our biological discovery pipeline, this diverse group of plant protection products are derived from microorganisms found in nature. They're formulated to meet shelf life and stability requirements. Biologicals offer performance benefits beyond their environmental profile. They can help plants overcome difficult growing conditions, fight disease, and assist in regulating the plant's uptake of nutrients and use of limited water. They provide different modes of action compared to synthetic molecules and can be used by growers to broaden the spectrum of pest and disease control beyond those of synthetic products. We are working on new bioinsecticides, bionematicides, and biofungicides at our European Innovation Center in Denmark. There are eight biological molecules in our discovery pipeline, and we continue to test and quantify their control of diseases and insects.
As I previously mentioned, we have made substantial progress in our development pipeline. We have progressed nine molecules since 2018, seven synthetic molecules and two biologicals. Three of the nine have advanced from discovery to development, and one, Insect One, has progressed two stage gates over the last 24 months. This progression demonstrates our pipeline's productivity and our disciplined approach to advance the most promising new molecules. This graphic shows our pipeline's strength and value to our company and to growers around the world. We have excellent diversity across target markets, target regions, indication areas, as well as synthetic and biological active ingredients. Many molecules provide new modes of action, as indicated in the fourth column. We're biased for new modes of action molecules, which can better control pests that are building resistance to other products.
They maintain efficacy longer because growers have a new tool to help rotate different products, and they typically provide greater sustainability benefits. Four products in this pipeline will launch next year with other launches throughout this decade and beyond. Isoflex active is our new herbicide scheduled for launch in Australia early next year using the brand name Overwatch Herbicide, followed by other countries globally. This herbicide will help growers address problem grass and broadleaf weeds across a wide range of agronomic environments. Its mode of action, inhibiting a unique site within the carotenoid biosynthesis pathway, is new in cereals and delivers high performance and flexibility for rapeseed, cereals, corn, and sugarcane growers. It provides excellent crop selectivity and controls resistant weed species such as ryegrass, blackgrass, and windgrass. Isoflex offers early season application flexibility, a significant benefit to growers.
It can be applied pre-emergence, meaning before the weeds have started to emerge, as well as early post-emergence, providing a longer interval time to spray and thus maximizing grower productivity. It provides selective residual weed control, offering season-long activity on key grass weed species, including ryegrass and blackgrass that can germinate over extended periods of time. It has a major competitive advantage over products that can only be applied pre-emergence. In more than 100 replicated trials conducted in Australia, Overwatch Herbicide has proven to control a wide range of important weeds with up to 12 weeks of residual weed control. Isoflex can be a complementary mixing partner with other herbicides and will expand the utility of existing products by broadening the weed spectrum controlled. It's a new tool for resistance management, offering a new rotational product to growers.
As a molecule progresses through development, we conduct tests and generate data comparing our technology against competitive products. Data will range from technical performance, human safety profiles, resistance or cross-resistance, residual controls, beneficial insect safety, application and timing windows, and many other attributes. We have included a summary of results from key data for each molecule we'll discuss today. For Isoflex, you can see how this molecule outperforms the competition's best-in-class product across multiple areas. In addition to controlling weeds, we have also observed in Australia that, on average, the biomass of crops treated with Overwatch Herbicide is higher than plots treated with products currently in the market. This increase in biomass from Overwatch Herbicide is believed to be due to its limited effect on crop growth and development, extended length of control, and broad weed spectrum.
Turning now to tetflupyrolimet , which we referred to as Herbicide One at our last investor day event in December of 2018. This weed control technology is being developed for the rice market, primarily in Asia. Its mode of action, dihydroorotate dehydrogenase, DHODH, is brand new and was discovered by FMC. It's the first new herbicide mode of action discovered in over three decades. It works by interfering with an enzyme necessary for the synthesis of DNA and RNA in cells so they can no longer survive. Tetflupyrolimet is expected to launch in 2023 in Korea, followed by multiple countries in Asia. It provides season-long control of important grass weeds, broadleaf weeds, and sedges. Due to its new mode of action, tetflupyrolimet has no known cross-resistance. It controls herbicide-resistant grasses such as Echinochloa, key sedges, and some broadleaf weeds with just one application in the growing season.
It will be launched in both the transplanted and direct-seeded rice markets worldwide. When tested in the field, the most important attributes were consistent efficacy on weeds and crop safety. We are exploring the use of Tetflupyrolimet in other crops, including sugarcane, wheat, soybeans, and corn. Technical work is progressing and remains on track. As you can see in our technical attribute summary chart, Tetflupyrolimet is outperforming the competition's best-in-class products across multiple areas. In addition to its biological weed control, this molecule provides a large margin of safety for workers, enables short re-entry intervals after application, and uses low dose rates. A single application of Tetflupyrolimet provides season-long 95%-100% control of grass weeds, while through our competitive intelligence, we know that farmers are getting about 80%-90% control of grass weeds with two or three herbicide applications.
It provides reliable and consistent weed control within seven days of application, with lasting control up to 50 days. It can be applied when the rice is transplanted, decreasing labor costs. Resistance has become a very serious challenge in many of the largest rice markets around the world. We have listed just a few of the many grass weeds that have developed resistance to current commercial standards. Tetflupyrolimet has demonstrated very strong control in each of the grass weed species on this slide. It provides growers with a new tool in their herbicide arsenal. Moving to Herbicide Two, this new mode of action herbicide is a very effective mixed partner with Isoflex and will provide flexible application timing similar to that of IsoFlex. In fact, Herbicide Two complements the activity of Isoflex. Together, these products will control broadleaf and grass weeds.
As a phytoene desaturase-type herbicide, or PDS, it will be a new mode of action in several markets. In the European Union, this mixture will launch in the pre-emergent cross-spectrum segment for autumn and spring wheat and barley markets, as well as corn and beans. The ecotoxicological and environmental profile of Herbicide Two is an advantage in gaining regulatory approvals in the European Union due to the competitive products going through the EU's regulatory renewal process. In cereals outside the EU, we have demonstrated control for key grasses and key broadleaf weed species that are resistant to current herbicides. On our technical attributes chart, you can see how Herbicide Two's weed spectrum of control and environmental profile compare favorably to several competitive products on the market today, especially its ecotoxicological and environmental safety profiles.
We are pleased with the technical progress, including completion of important regulatory studies, finalizing the manufacturing process at two FMC sites, and completing a multi-year European Union field trial program for a solo formulation. Growers in North America are eagerly awaiting Herbicide Three's launch because it controls a type of Amaranthus weed called Palmer amaranth. This pervasive weed, which is largely resistant to current herbicide modes of action, can grow 10 feet, produce a million seeds from one plant, and devastate crop yields. Growers have increased their use of herbicides for weed-resistant management of Amaranthus and are using mixtures of three or four active ingredients. Herbicide Three's mode of action controls resistant broadleaf weeds in corn and soybeans. We're exploring additional crops for this molecule, including cotton, wheat, sunflower, and pulses in North America, soybeans, corn, cotton, and rice in Latin America, and wheat and pulses in Asia.
Herbicide Three is applied as a pre-emergent product to control other small-seeded broadleaf weeds such as waterhemp and red or root pigweed, as well as Palmer amaranth. With long-lasting residual control, growers will be able to better manage these problem weeds. Other attributes that make Herbicide Three an attractive commercial product are its flexibility of use in different formulations and its crop safety. In addition to testing in other geographies and crops, we are field testing key mixture partners to broaden the spectrum of weed control. With these pre-mixtures, we see greater than 95% control of Amaranthus weeds, which is higher control than competitive products on the market. We advanced Herbicide Four from our discovery pipeline into development in the fourth quarter of 2019.
This technology is effective in pre- and post-emergent applications and has both a broad spectrum for weeds as well as a high degree of crop selectivity. Applying Herbicide Four with post-emergence burn down control provides commercial-level efficacy on marestail, greater than 99% control of ragweed, and strong control of bedstraw weeds. Herbicide Four has a novel target site for its mode of action, HST, or homogentisate solanesyltransferase inhibitor. It has value in a large addressable market because it's effective on resistant weeds and provides broad spectrum control over multiple crops such as corn, soybeans, and rice. Let's now move to insecticides. Insecticide One's key attribute is that it's systemic, meaning when it's applied either through sprays on the leaves or with irrigation, it is taken up in the plant, protecting the entire plant. It controls aphids that feed on the plant by sucking and piercing the leaves.
This molecule works quickly by disrupting or stopping aphids from continuing to feed on plants. Fast acting is important because it can stop or greatly reduce the withdrawal of large quantities of phloem sap that the insect removes from the plant. It's important to recognize that insecticides offer many benefits to a grower beyond simply controlling insects. Infestations will lower yields, suppress crop vigor, and potentially lead to the transmission of disease-causing pathogens into plants. Insect control technologies help growers reduce or eliminate these serious problems. Our Insecticide One controls destructive aphids not only to protect the plant from damage caused by the insect feeding on the leaves, but also protecting the plant from viruses that can be transmitted by the aphids in certain vegetables and ornamentals.
Insecticide One provides outstanding residual activity, 25-38 days when applied in the soil and 14-28 days when applied to leaves. It has broad-spectrum control of sucking pests with no known pest resistance. It's also safe to honeybees, other beneficial insects, and soil organisms such as earthworms, with an excellent human safety profile and low persistence in the environment. Moving to fungicides. Fluindapyr is a novel broad-spectrum fungicide. Its mode of action, SDHI, or succinate dehydrogenase inhibitors, addresses multiple rust diseases in cereals, soybeans, and other crops by arresting the development of various fungal diseases. It controls important pathogens that are resistant to other chemical classes, such as diamides and strobilurins. Fluindapyr is a strong standalone fungicide, but it's also an ideal partner for mixtures and application programs with other fungicides to provide broad-spectrum disease control. It's a very important addition in resistance management programs.
SDHIs have utility in controlling Asian soy rust, a key crop disease in Latin America. Products with other modes of action that controlled this disease a few years ago, such as strobilurin fungicides, are much less effective today. Fluindapyr also combats a variety of other diseases in turf. As a standalone, it provides excellent control of dollar spot and brown patch. Mixing Fluindapyr with flutriafol, another FMC fungicide active, will strengthen its disease spectrum for turf disease control. We have completed regulatory submissions in Brazil, the U.K., Korea, China, Argentina, Paraguay, and Mexico, and we are launching a mixture of Fluindapyr with flutriafol for turf applications in the U.S. next year. In trials against current market standard fungicides, Fluindapyr 's performance in key crop segments and target diseases, including Asian soy rust and leaf spot, exceeds the performance of competitive products. You will notice on this chart reference to mixtures.
Because growers will typically see multiple diseases attack crops at the same time, it's important that a fungicide can serve as an effective mixture partner. Our field studies confirm that Fl uindapyr is an excellent mixture partner with other fungicide active ingredients. Shifting now to biologicals. As I mentioned earlier, biologicals feature new modes of action and excellent sustainability profiles and are a strong complement to our synthetic portfolio. Our R&D team focuses on biologicals with performance attributes that exceed the competition, such as high stability, long shelf life, low use rates, and compatibility with other chemistries. We recently launched Acudo biostimulant in the South Korea market and have submitted other new bacterial strains to regulatory authorities across all geographies for evaluation and approval. Acudo biostimulant was recognized earlier this month as the best new biological product at the Crop Science Forum and Awards.
The graph on this slide shows four FMC biologicals in development. For each, we've included a summary of targeted diseases and pests, key attributes, and how we are prioritizing crop segments. Our next launch will be Avodigen, a seed treatment bionematicide strain that provides protection against nematodes along with biostimulant activity and control of key soil diseases in soybeans, corn, cotton, sugarcane, and other crops. We currently have two biofungicide molecules in development. Biofungicide One is effective against soil diseases such as Rhizoctonia, Fusarium, and Pythium when applied in the soil or through seed treatment for fruits and vegetables. This biofungicide also has biostimulant properties and will complement traditional synthetic fungicides. Biofungicide Two advanced into our development pipeline last year. It targets foliar diseases such as Septoria, powdery mildew, and leaf spot in the high-value fruit and vegetables market. We're also exploring the use of biofungicide Two in row crops.
This product will complement traditional synthetic fungicides. And lastly, Bioinsecticide One is a novel Bacillus strain that has insecticidal activity for soil pests. This product can be used in seed treatment, in furrow, as well as drip or drench applications in fruits and vegetables and row crops to control wireworm and corn rootworm. Our teams are assessing possible upside for nematode control properties. Let me now move to other investment areas beyond our Arc. In May, our Precision Agriculture team announced the launch of Arc Farm Intelligence, the industry's first predictive modeling platform that helps advisors and growers predict insect pressure one week in advance with more than 90% confidence for key insects in select crops.
Our technology uses real-time agronomic data to help growers apply the right crop protection products where and when they are needed to improve sustainability, optimize crop yields, and enhance the farmer's return on investment. Arc features automated scouting, trap data that's visualized through pest pressure heat maps, predictive pest forecasting, and a tool to facilitate grower and product advisor communications regarding product application strategy and agronomic advice. Arc was successfully piloted in Greece, Spain, and Brazil, and we recently announced a partnership with Nutrien to use the platform for prediction of diamondback moth in California. We have close to four million acres covered by Arc, with more than 500 active users this year. The platform supports product recommendations for multiple FMC active ingredients. Several have been targeted for specific positioning with Arc, led by our diamides.
In 2021, we are planning more than 20 countries and about 25 million acres covered, including monitoring 13 different crop types and 21 different insects. Next year's plan is to expose about 20% of FMC's revenue to Arc Farm Intelligence. Finally, a few comments about FMC Ventures and our external investments and partnerships. We have a world-class R&D team that develops amazing technologies. But innovation moves rapidly and emerges from many different sources. It's important to have visibility and access to new or disruptive technologies that can support and augment our in-house capabilities. In June, we launched FMC Ventures, our new venture capital arm focused on strategic investments in startups and Early Stage Companies, primarily in technology areas such as precision ag, artificial intelligence, synthetic biology, and biopesticides. We invest in or collaborate with companies we believe have developed a technology platform that could create opportunities for FMC.
FMC Ventures announced its first investment in Trace Genomics earlier this summer, a startup that combines superior DNA sequencing and machine learning to explain how soil diseases emerge. This data can identify beneficial organisms, which may ultimately be developed into biological products that counter harmful pathogens. We began collaborations with Cyclica and Zymergen. Cyclica is a leading biotech company specializing in artificial intelligence and computational biophysics that can help accelerate and improve the efficiency of our discovery process. Working with Zymergen will help us identify natural products in their proprietary library of desert arid soils. These can be starting points for new molecules in our discovery efforts. We also recently invested in Kiwi, an autonomous aerial spraying startup. We'll continue to assess companies that we can collaborate with or invest in to help broaden our capabilities and create new tools for growers.
FMC has a strong pipeline of new molecules and new products scheduled for launch starting next year. Our discovery pipeline is rich in new modes of action with promising synthetic and biological molecules. Our development pipeline addresses a diversity of growers' needs in different pest areas, different geographies, and different crops, providing new products for every region around the world, and we've expanded our technology programs and tools into new areas such as Arc and new external partners and collaborations. Best R&D pipeline, the award FMC received from the Crop Science Forum and Awards a few weeks ago. We're proud of that recognition, but the significant value of our pipeline comes from what FMC will bring to growers around the world with diverse products and some of the most advanced technologies farmers need and want to protect their crops. Thanks for your attention. Turn it back to Michael.
Operator, we'll now take a few questions before moving on to Diane Allemang's presentation,
And we will now begin the question and answer session. To be placed in the queue, please press the star key, then one on your touch-tone phone. If you're using a speakerphone, please pick up the handset before pressing the key. Please limit yourself to one question only. If you have additional questions, you can jump back into the queue. To withdraw yourself from the queue, you can press the star, then two, and our first question today will come from P.J. Juvekar with Citi. Please go ahead.
Yes, good morning, and thank you for the detailed presentation, and it's good to see R&D dollars flowing back into our chemicals.
I guess my overall question was, you know, what we didn't see was the TAM, the total addressable market for each of these herbicides and insecticides, et cetera. And also, you know, what could be the yield advantage or benefit to the grower? Because I think that will really determine how you price this product. So any thoughts on that would be helpful. Thank you so much.
Yeah, thanks, PJ. You have the unfortunate task of going first and not seeing Diane's presentation. Diane does walk through all of these molecules and talks about the addressable market, how we expect to take share in those markets, and also the attributes of those molecules. What are they actually doing for the grower? What are the key requirements that they're meeting that are either problematic for the grower today or will be in the future?
So I think we'll just hold that thought until we get to the presentation because I think you'll have a lot of the answers there when we go through Diane's section.
Maybe I can ask a quick one saying, you know, a lot of these herbicides that are coming to the market, is the growth driven by ineffectiveness of glyphosate due to resistance?
You know, PJ, it's not just glyphosate. There is resistance to numerous herbicides that are out there, whether they be the broadcast-type herbicides, dicamba, 2,4-D, glyphosate, or some of the more specialty selective herbicides as well. So, you know, what you're seeing here is just a facet of how resistance builds over time. More weeds become multi-resistant to many different types of chemistries. And therefore, we need that strong pipeline of herbicides to keep the tools in the grower's hands.
I would say it's very similar, except much quicker with fungicides. You know, fungus develops resistance much faster than weeds or insects do. So that notion of having breadth in your pipeline that allows you to bring multiple products to market within a reasonable time frame really helps your growth and market access.
Thank you. And our next question will come from Stephen Byrne with Bank of America Securities. Please go ahead.
Yes, thank you. I wanted to ask a little bit about your biologics research platform, and maybe I'll layer it in as a multi-part one question. And that is, if you had to look down the road 10 years, what fraction of your revenue do you think would be from biologicals versus traditional synthetics? Do these biologicals survive the winter? Do they have to be reapplied each spring?
And then just lastly, are you using gene editing to amplify the pathway that produces the biopesticide?
Thanks, Steve. I'll take one of those. I'm certainly not going to talk about gene editing in research. I'll leave that up to Kathy. I can tell you from a biologicals versus synthetics, you know, we do see biologicals as stand-alone products. We do sell them either as single-use products or in a rotational spray program with synthetics. So you can see biologicals replacing synthetics as you go through a seasonal spray. Usually, the biologicals are used at the end of the program, low residuals or no residuals, so they have beneficial properties. But what we've also found, and we have a number of successful products that are hitting the market and selling well, is pretty sophisticated formulations of synthetics plus biologicals.
So what you're bringing is complementary modes of action, but you're also lowering the load of synthetic products that are in that formulation and replacing with biologicals. So we think they have utility both ways, straight as replacing synthetics in spray programs, but also in formulations. Your second question about how big will this business be? You know, we have targets as we roll through the next mid this decade, sort of 2025 through 2027, for this business to be anywhere from $350-$500 million. So it's not going to be the vast majority of the portfolio, but what we do see is steady growth and steady adoption of these technologies. And I think what's important here is there is a significant educational element that has to occur. And I would say that occurs both at the grower level through retail and distribution, but also internally as well.
You know, we've been selling synthetic crop protection products for many, many decades. Biologicals tend to work in different ways. They have different application technologies that are used. They perform differently. They don't behave the same way as synthetics. So we have to educate the whole value chain of the value of biologicals and how they perform. And Kathy, do you want to answer the gene editing question?
Yeah. So when you're looking for biological biopesticide activity, you know, and you're testing the materials, it could either be the microbe itself that has those activities, or it could be a material that it makes as it's part of its natural state and therefore has some kind of biopesticide activity that can be applied. So we have not employed gene editing to date in our efforts.
We've been looking at a fairly significant library of microbes that we purchased a couple of years ago and screening that library. To date, we've stayed away from the gene editing portion mainly to assure that we can get regulatory approvals in every region of the world. But that is an amazing tool and one that we're keeping our eye on and looking hard at as well as it could advantage us in the future.
And our next question will come from Vincent Andrews with Morgan Stanley. Please go ahead.
Thank you. Good morning, everyone, and thank you for the presentation. It's nice to be talking about the future rather than dwelling in the present or the Brazilian reality or whatever else.
But my question would just be, if you could talk a little bit about, I'm just kind of looking through the pipeline slides, and there's a lot of different exciting things you're working on, whether it's synthetics or biologicals or the precision ag or even, you know, what could come out of the venture portfolio. You know, assuming, you know, your R&D budget is, you know, going to stay within a reasonable range, how do you manage the evolution of these pipelines, particularly at the early stage? And I guess what I mean is, how do you think about funding sort of the lumpiness of some of this?
And when you're making the decision to advance products through the pipeline, and presumably a lot of it's based on scientific data, but how do you think about the funding of it and, you know, what you want to push forward in terms of sort of the totality of the portfolio and how much you want to be new active ingredients versus how much synthetic versus how much biological? How do you, how do all these things compete against each other and, you know, stay within the budget, I guess is my question.
Yeah, thanks, Vincent. Listen, Andrew has a section that he is going to talk more about what makes an attractive investment in R&D. So he'll talk a little bit more about, you know, how we value the individual opportunities that are coming along.
I'll just take a higher view until he makes his presentation and just say that, you know, the rate we're spending at in that 6.5%-7% of revenue, obviously as the revenue line continues to inflate at a rough 5%-7% range, we will continue to inflate our R&D dollars. I think one thing that's been important for us over the last three years or so is I think the R&D organization has become more productive, utilizing different techniques, thinking about how we progress from stage to stage, when do we actually kill products. So that, you know, that 6.5%-7%, I would say we're doing more with the dollars today than we were three or four years ago. How do we pick between the different types of molecules that are coming out of discovery?
The reality is there's a very strong connection between Diane's group in global marketing and Kathy's group in R&D because we're basically looking at products that will come to life in 10 to 12 years' time. So blending in the regulatory environment, what do these molecules look like? Will they be able to address whatever the regulatory concerns are 10 years from now? That's an important consideration. There are molecules in the pipeline, sorry, in the hits that we look at that we don't develop from the sustainability assessment tool. There are things that we see that they may look okay today, but in 10 years' time they won't be okay. So we don't invest in those types of molecules. That gives you kind of a high-level view. I will hold the rest until Andrew's had a chance to do his presentation.
And our final question for the first Q&A session will come from Kevin McCarthy with Vertical Research Partners. Please go ahead.
Good morning. Mark, I was wondering if you could speak to your long-term goals and your thought process around fungicides relative to your leadership in other areas. It seems like you have more headroom to grow. Can you address how much of that you would foresee from organic growth molecules like Fluindapyr and others versus opportunity to add to fungicides via acquisitions, for example?
Yeah, Kevin, good question. And one we get, you know, we've talked about numerous times. I think it's a multi-pronged approach for us. I mean, Fluindapyr was obviously a clear example where we already had a development relationship. We part-owned the molecule. It was a great opportunity to go and acquire.
I would say the other two areas that we're looking at is, first of all, our own pipeline, and if you go back to the slide that Kathy had, you know, we have seven fungicides in our discovery pipeline. Now, I know they're a little longer term, but the fact that we have seven, I think that's the highest number we've had in that discovery pipeline since we began tracking and working through. So we're obviously expanding our biological screens that we use to look for fungicidal activities. They're obviously getting us more opportunities, and we will continue down that path. But that's a little longer term. I would say the second piece is use of our current technology to swap technology, and what do I mean by that?
There are opportunities for us where we have a competitor who may want access to one of our products, and they have a good fungicide portfolio. We are actually doing deals today where we are swapping technologies or giving access to products that allow us to have access to fungicides. So I think the three elements coming together, we are seeing our fungicides expand. We're having great success in North America with our flutriafol-based products such as Rhyme and Lucento. That will continue. I think one of the problems we've got is the rest of the portfolio is going to be growing so quickly that, you know, the fungicides are not actually making an overall impact. Yet they are growing nicely. So it's something we're going to continue to manage. There's not a silver bullet, and it will occur over time.
Okay. Thanks for that answer and those questions.
I'm now going to introduce Diane Allemang, our Chief Marketing Officer.
Good morning, and thank you for joining us today. I will discuss what our innovation pipeline means for the market and our investors. I will walk you through the development pipeline, starting with the compounds closest to commercialization. For each of these compounds, I will identify the important gaps it fills in the key markets, the addressable market, market share, and our estimated peak sales for the initial targets. But first, I want to discuss how we identify and value the commercial opportunity for new products. We believe outlining this information will allow investors to better understand our outlook and our optimism. Kathy discussed the target product concepts, which drive our discovery work. These product concepts reflect key market needs and grower challenges around the world.
Each concept represents a market need and thus associated addressable market, which is the starting point for any assessment. The addressable market is that portion of a crop protection indication, such as insect control or weed management, that is relevant to the pipeline molecule. It evolves as we learn more about a compound and as the market factors and competitive landscape change. For example, as an herbicide moves through the pipeline and we discover more about its performance and attributes, the addressable market may evolve from broadleaf herbicides in corn to pre-emergent broadleaf herbicides in corn and soybeans. Further, by identifying a mixture compound effective against grass weeds, the addressable market could expand to cover broadleaf and grass pre-emergent herbicides in corn and soybeans. Likewise, we may learn that an insect control compound initially determined to be effective against aphids and thrips is also effective against whiteflies.
The next step is to determine the value of the addressable market. Generally, we estimate the addressable market for all compounds using a combination of secondary market data and primary research. We initially analyze the secondary data with appropriate filters and from our local teams and country. As we learn more about the compound's performance in the field, we supplement our analysis with other market-specific research. This information gathering is often followed by commissioned research to get more specific and precise information that increases our knowledge base and guides us in refining our assumptions. We consider the current market value and the historical trend to estimate near and long-term market outlook. The key next step is to estimate the % of the addressable market the compound will reach, the market share it will obtain. There are a multitude of variables that enter into our market share estimate.
These include product-specific features such as performance and cost, specifically compared to products currently used and in comparison to the anticipated future products. The outlook for the market, whether it will be growing, stable, or declining, is also considered, as the outlook influences whether the product sales will come from market growth or the replacement of other products. Furthermore, our forecast may be for increasing share as we bring new formulations, new mixtures, and supporting technologies to market. The forecast for market share with the associated forecast for pricing and volume leads to our forecasted sales. The process of identifying and valuing the addressable market, forecasting the market share, and estimating the sales opportunity is a continuous process as a compound moves through development and even after commercialization.
As we gather additional data and enhance our knowledge of the product's performance in more and more crops, we expand our understanding of its fit in the market and how it can best meet grower needs. FMC is committed to finding as many opportunities and market solutions with our assets as possible. A great example of this is the fungicide Flutriafol, which started as a cereal fungicide in Europe. We then registered it in Brazil as it was very effective on soybean rust. In anticipation of the movement of soybean rust north, we registered it in the U.S. Although soybean rust has not proven to be a commercial concern in the U.S., we discovered an opportunity to fight diseases in tree nuts and other orchard crops.
This past summer, flutriafol received U.S. EPA registration under the trade name Xyway fungicide as the first and only at-plant corn fungicide to deliver season-long foliar protection from key diseases like gray leaf spot and northern corn leaf blight. As I talk through each of our development pipeline compounds and our current sales forecast, I will present figures that reflect the outcome of the addressable market and market share evaluation I have just outlined. Furthermore, these figures represent the market opportunities that we have identified and quantified to date. There remains tremendous potential to address market needs and achieve sales beyond those discussed today, particularly for compounds in the early stages of development. Our peak sales numbers reflect the life cycle strategy for the molecule and the presented opportunities. For example, we generally aim to achieve peak sales in three to five years in each market.
However, we will consider the options for both solo formulations and mixtures. The mixture strategy may involve a new active ingredient that will not be available for a couple of years. Of course, we also consider any competitive products that may be coming to market. As a result, the year of peak sales may expand beyond that initial three to five-year target. Therefore, I'll present the peak sales forecast for the market opportunities identified to date in a range that balances the risk and opportunity profile identified thus far. For the compounds closer to commercialization, the risks that drive the lower end of the range may include uncertainties around regulatory considerations and open questions about certain performance features. The upper end of the range may reflect expanding target pest resistance to competing chemistry or potential yield improvements.
For molecules in the early stages of development, we still need to learn more about the compound's performance in various conditions and application methods. So the ranges for these molecules are generally wider. Furthermore, the consideration and adjustment for risk are embedded in our processes. We look at financial adjustments as well as other factors like time and potential regulatory outcomes. So the numbers that we are presenting today have been risk-adjusted at each step in our process. We do not roll up the numbers and then adjust. We are cognizant that there are risks and opportunities at any stage of development. We identify, evaluate, articulate, and respond to them throughout the process of developing our market share and sales forecast. For example, we keep a close eye on the regulatory environment, the competitive landscape, and factors that could impact the cost of goods.
Some factors are consistent across compounds, but there may be unique elements depending on the active ingredient and the market segment. Our global marketing, R&D, and operations functions work together with the local team to align our assumptions and forecasts, including how best to adjust the outlook for risk and uncertainty. Launch and other marketing costs are factored into our overall expenditures. Generally, we estimate these costs to be 5%-15% of peak revenue, with variability based on the crop segment and categories. We know that it costs more to launch and market a product in diversified crop segments like fruit and vegetables than in row crops. Furthermore, marketing expenses for insecticides and fungicides tend to be higher than herbicides. So all this is considered when we estimate our ultimate return on investment.
We ground ourselves on appropriate estimates that best match how our compound will fit into the specific segment in which we intend to sell, considering the value to growers and our presence in that market today and in the future. Let's look at the 11 compounds in our development pipeline that Kathy presented and discuss how they will fuel FMC's growth. All of the compounds you will see here have yet to be launched. They are truly in development and therefore have no sales to date. As I discuss each one, you will see the opportunity that lies ahead for these compounds. We plan to launch each new molecule country by country as registration is granted. This staggered approach allows us to bring important global elements to the launch planning, including branding and development of value propositions.
It is important to note that the launch timeline is based on our assumptions and is subject to regulatory approvals. We are enthusiastic about the significant value that these compounds will bring to growers and are confident that this pipeline will generate approximately $2 billion in revenue by 2030, with total peak sales approaching $3 billion. All the sales projections that I'll share today are net. Any cannibalization has been removed. I'm also pleased to say that the compounds in our pipeline involve very limited cannibalization overall. Before we dive into the current development pipeline, I want to provide an update on Lucento fungicide. The last time we shared a technology update, we were preparing to launch this dual mode of action product, which contains a mixture of bixafen plus FMC's proprietary fungicide flutriafol.
Since launching in the U.S. in 2019, Lucento has been well received in the market as a differentiated solution to a wide range of diseases in corn, soybeans, and peanuts. Lucento is an important part of FMC's U.S. fungicide portfolio and a key driver of revenue growth in our U.S. business. This year, demand has exceeded our original launch targets. Lucento was the main driver of FMC fungicide share growth in corn and soybeans in the Midwest this year. Results in peanuts look equally strong, with grower demand increasing significantly in the 2020 season. After two years, we are closing in on the project's original peak revenue target of $30-$50 million. The first compound from our development pipeline that I want to discuss is the closest to launch.
Isoflex Active is foundational to our evolving herbicide portfolio and will serve as the centerpiece to many of our crop segments and mixture strategies over the next decade. Since our Investor Day presentation in December 2018, we have accomplished several milestones as we prepare to launch Isoflex in over 20 countries. Earlier this year, we developed the global trade name Isoflex Active and began commercial-scale production of technical material at our Panoli, India, facility. In April, our active ingredient registration was approved by Australian regulators. We are awaiting formulated product approval for Overwatch Herbicide, which is expected before the end of this year and before the winter crop season in Australia. Overwatch is the first brand powered by Isoflex to be registered. Looking at activities beyond Australia, our active ingredient registration application was submitted to Brazilian authorities this past summer, and the registration review is underway in the European Union.
We anticipate launching other herbicide brands powered by Isoflex in Argentina and China in 2022, and India, Brazil, and parts of Europe over the next five years for cereals, rapeseed, corn, and sugarcane. The estimated market value for controlling the resistant weeds on these crops is approaching $3 billion. Herbicides are increasingly used in mixtures to combat weed resistance. Just as we do with the diamides, we are working with partners to bring differentiated offerings with Isoflex to support more growers around the world with targeted offerings. The largest market opportunity for Isoflex is in Europe, where cereal growers will be able to apply mixture products containing Isoflex in autumn to control herbicide-resistant weeds such as black grass and rye grass. We estimate that growers currently spend $900 million annually trying to control these weeds.
In other European markets, including rapeseed and potatoes, we will offer a mixture of Isoflex and clomazone to control grass and broadleaf weeds. Corn growers will have a pre- and early post-emergent product powered by Isoflex to control grass and additional broadleaf weeds cost-effectively. We estimate peak sales for Isoflex at $400-$600 million and project achieving 15%-20% market share at peak. We feel confident in these projections because weeds are increasingly resistant to current chemistries, and Isoflex is a new mode of action in cereals. It is an excellent tool for resistance management in pre-emergent and early post-crop segments and provides a new rotational product in key markets. As you heard Kathy say, this flexible application timing is a significant competitive advantage over existing products that can only be applied pre-emergent.
Annual rye grass is one of the most costly and damaging weeds in southern Australia's annual winter cropping system. Many of the weed species in Australia are developing resistance to herbicide products currently available. Overwatch gives growers a new and important tool to control weeds that are no longer controlled by other herbicides. Despite COVID-19 challenges, the Australian team and global R&D have safely conducted demonstration trials at over 100 grower sites this year, allowing for virtual field visits of impressive results. These programs demonstrated strong efficacy, crop safety, important weed spectrum, residual control, and mixture partner fit, as well as potential yield benefits. Growers and agronomists are excited by the level of flexibility Overwatch will provide them. They will be able to apply Overwatch to the field and then decide closer to planting whether wheat, barley, or rapeseed is the best crop to grow.
The knowledge that we gained from these demos is being shared with colleagues in other countries, guiding and supporting their work as they prepare for subsequent launches. Fluindapyr, a new SDHI molecule, is another important compound in our development pipeline. Fluindapyr is a novel fungicide with broad-spectrum activity against a wide range of important diseases in row and specialty crops, as well as non-ag uses. Broad-spectrum SDHI fungicides like F luindapyr are among the newest fungicides and are predicted to become one of the most important classes due to their utility in managing increasing resistance reported to other major classes of fungicides. Phillips McDougall expects SDHI fungicides to continue to grow strongly at a rate above industry average. Strong grower acceptance of the class and its use in controlling resistant diseases in crops such as cereals will be key to this growth.
Fluindapyr strengthens FMC's fungicide portfolio by expanding the spectrum of diseases our products control. This is the first new compound we will launch in all four regions. We plan to commercialize Fluindapyr mainly in mixtures designed for local conditions and specific diseases, including Asian soybean rust, cereal septoria, and other leaf spots, as well as fruit and vegetable diseases such as powdery mildew, blights, and scab. We plan to launch the high-performance mixtures for over 20 crops, including soybeans, cereals, rapeseed, and fruit and vegetables in dozens of countries, including Argentina in 2021, China and Mexico in 2022, followed by the key markets of Brazil and Europe in 2024. We are also preparing for a 2021 launch in the U.S. for turf applications. According to AgBioInvestor, the global fungicide market is valued at over $15 billion, with 2.5% growth per year expected.
We estimate the value of the fungicide markets in our scope is around $2.5 billion, and we anticipate peak sales for Fluindapyr at $350-$400 million and project achieving approximately 15% market share at peak. A pre-mixture strategy that encompasses different modes of action and targets additional diseases will enable us to effectively meet growers' needs and combat fungicide resistance while extracting the maximum value out of the molecule. For example, a formulation designed with South American growers in mind is a strong choice for disease control in various crops, including corn, soybeans, peanut, and coffee. As our team in Argentina prepares to launch this new fungicide, they conducted over 50 demo plots, field days, and workshops this year, and in the coming months, they will host approximately the same number of field demonstrations for agronomists and growers to see the efficacy of Fluindapyr products.
The acquisition of the remaining rights to fluindapyr from Isagro will have a positive impact on our life cycle strategy. It opens additional countries to FMC and provides more opportunities to develop additional formulations. The next four products in the pipeline are microbe-based biologicals. Increasingly, the market recognizes that biologicals are complementary to synthetic crop protection. We talk about the importance of rotating chemistry and rotating modes of action to help combat resistance. Biologicals are essentially another mode of action. They can help extend the lifespan and performance of synthetics, and synthetic products can enhance biological crop protection products' performance. Biologicals can also work well in a program as the last spray on an orchard or other specialty crop, helping to balance pest control with trade and residue level considerations. Our current biological pipeline contains a bionematicide, two biofungicides, and a bioinsecticide.
Avodigen is a seed-treatment bionematicide strain combination providing protection against nematodes with added biostimulant activity and control of key soil diseases in fruit and vegetables, cotton, potato, sugarcane, corn, and soybeans. We plan to launch this bionematicide in over 30 countries beginning next year in Korea. Additionally, initial results from a demo campaign conducted this year in the U.S. look promising for a 2021 launch. Biofungicide One is a strain combination for soil diseases to complement standard chemical drip and drench applications and seed-treatment fungicides. One strain provides fungicide activity while the other acts as a biostimulant, providing a possible 5% yield gain. Biofungicide One will target soil diseases as a seed-treatment and an in-furrow application for row crops, including corn, soybeans, and cereals, or through drip or drench applications in potato, cucurbit, tomato, and other fruit and vegetable crops.
We will launch Biofungicide One in over 20 countries, beginning with the U.S., Korea, and Brazil in 2021. Canada will follow in 2022 and Mexico and Australia in 2023. Europe and countries in Asia will launch in 2024. Bioinsecticide One is a novel Bacillus thuringiensis strain that works very differently from foliar-applied Bt products in the market today. It is soil-applied and works through a metabolite that it produces, which repels soil insects. We plan to launch in over 20 countries beginning in 2023 with Brazil and the U.S. The bioinsecticide will be available in Mexico the following year and in European countries in 2027. The last biological is Biofungicide Two. It is a foliar biofungicide that will complement synthetic fungicides in the high-value fruit and vegetable segment by targeting key pests like botrytis, powdery mildew, and leaf spots.
We plan to sell this compound in many countries, beginning with Mexico and Korea in 2024 and Japan in 2025. Europe is expected to follow two years later. We are excited about our biological pipeline and forecast these four products as having a peak sales potential of $150-$300 million. Biological crop protection is a growth platform for FMC that will continue to develop. We are focused on commercializing new modes of action that provide growers with more options to address their needs and enhance their return on investment. As Kathy mentioned, Tetflupyrolimet is an entirely new mode of action. It will be the first in the herbicide segment in three decades. Providing growers with a new herbicide mode of action will offer them the opportunity to overcome resistance from the most troublesome grass weeds and rice.
The target for Tetflupyrolimet includes transplanted and direct-seeded rice worldwide and is valued at nearly $1.5 billion. Tetflupyrolimet will have an excellent fit in mixtures and rice markets where growers prefer to apply herbicides only once per season. As I mentioned previously, we will talk to potential partners regarding mixture opportunities that enable growers to design a weed management program to combat resistance. We'll begin launching Tetflupyrolimet in Korea in 2023, followed by eight additional countries in 2024, including China, Japan, and Vietnam. We anticipate Tetflupyrolimet will be available to U.S. growers in 2025, farmers in India in 2026, and Brazilian growers in 2027. Asia is expected to account for over 80% of the estimated $300-$400 million in sales, with the largest share in China. Our projected sales only account for the use of Tetflupyrolimet in rice.
We are exploring opportunities in corn, soybeans, wheat, and sugarcane. These new crops and market expansions would address additional grower needs and expand revenue potential. Herbicide Two is a new mode of action for resistance management and pre- and early post-emergence control of broadleaf weeds and some grasses. Studies show it provides complementary performance to other herbicides. As Kathy mentioned, we're exploring this herbicide in mixtures with Isoflex. The biological performance allows additional value capture in the cereals market, which we estimate at over 30 million addressable acres in EMEA. The launch is expected in 2027 in the EU, where it will be a lower cost per acre replacement for current herbicides in the cereals market. Potential additive peak sales are in the range of $30-$50 million. The market share for Herbicide Two is reflected in the Isoflex projections.
We are currently exploring additional opportunities in the rice segment. However, the market opportunity and further sales potential have yet to be quantified. We will learn more as this molecule progresses further in the pipeline process. The last three compounds are in what we call the early stages of development. They are in the definition and validation phases and therefore still several years away from commercialization. Because of this, we do not have as much data available, but we do know that there is tremendous potential in the target markets. Whereas the addressable market for later-stage compounds, meaning those in the development and launch realization phases, is better defined, the addressable markets for these three molecules are based on less robust assumptions. To confirm our assumptions and help tighten up the estimates, we'll conduct extensive field testing. This field testing helps us define the scope of the addressable market.
As we have more experience and additional data, the addressable market will evolve. Herbicide Three is another new mode of action in corn and soybeans. This new mode of action provides outstanding pre-emergent residual control of resistant weeds, including Amaranth species and other broadleaf weeds, in corn, soybeans, cotton, wheat, and pulses. We expect to launch this molecule in 2028 with an initial focus on corn and soybeans in the U.S. and Canada, where we anticipate gaining 20%-30% market share at peak. Because this pre-emergent herbicide is proving safe for rotation to soybeans, we estimate North America's addressable market is nearly 100 million acres and approximately $1.5 billion. The peak sales range for Herbicide Three is $300-$450 million. This estimate is only for corn and soybeans in the U.S. and Canada.
It does not account for potentially $100-$200 million in potential sales from row crops in Latin America or other crops in the U.S. and Canada. Further analysis and field testing will help determine the market fit and the value of these opportunities. The next molecule in our development pipeline is an insecticide. Diamides and indoxacarb have positioned the FMC insect control portfolio for future growth. However, opportunities remain to fill gaps in the selective piercing- sucking, acaricide, and biological segments. These additions will further improve portfolio balance. As we discussed, Avodigen seed treatment and Bioinsecticide One will contribute depth in the biological segments. Insecticide One will help close the gap in selective piercing- sucking insect control, a market projected at over $5 billion in 2034. Growers will appreciate that this low-dose insecticide has systemic activity to protect the entire plant.
This is important in row crops like cereals, soybeans, cotton, and corn, as well as high-value specialty crops such as vegetables, potatoes, and tree fruits and nuts. In 2028, we intend to commercialize differentiated mixtures to enhance and broaden the spectrum of control in all major agricultural markets. We define the addressable market for Insecticide One as the aphid control market in these regions. This market is expected to reach approximately $2 billion in 2034. The same year, we expect to attain peak sales of $250-$500 million. We also see an emerging pattern indicating good control of whiteflies. This opportunity is being evaluated and will be addressed. It will be added to the estimated peak sales once confirmed. The final active in our development pipeline is an herbicide with pre- and post-emergent efficacy on resistant weeds and grasses. This herbicide recently moved into the development pipeline.
However, we know that its high degree of crop selectivity, new mode of action, and strong broadleaf activity will be a desirable resistance management tool for corn, soybean, and rice growers. With the information available today, we are focused on the opportunity in North America, where the addressable market for Herbicide Four will be over $2 billion at peak. As Kathy mentioned, there are additional opportunities in Latin America and Asia that we have yet to quantify. The estimated peak sales in the pre- and post-emergent corn and soybean markets in North America are between $150 and $300 million. We are looking at the high-value segments and not looking to compete against lower-value or non-selective chemistry. These 11 molecules are key components of FMC's growth over the next 10 years and beyond. Here you can see how the compounds discussed will broaden our global footprint and diversify our portfolio.
When we look at the development pipeline, the new active ingredients are forecasted to contribute $1.8-$2.1 billion of revenue by 2030. We are incredibly excited and optimistic about the strength of our pipeline. We believe it builds on three of our key strengths: presence, diversity, and sustainability. Our new molecules will deepen our presence in some areas while adding breadth to others. The development compounds add crop and geographic diversity, as well as the diversity of offerings within both the synthetic and biological categories. Lastly, we have a robust pipeline of sustainable solutions. We remain dedicated to developing new solutions to solve growers' most pressing pest challenges in a financially beneficial and sustainable way. Thank you for your time. Now I would like to introduce Andrew Sandifer.
Thanks, Diane, and thanks to all of you for continuing to spend some of your day with us. So far this morning, Kathy and Diane have shared with you detailed updates on our active ingredient pipeline. I'm incredibly excited about how these innovations will enable FMC to generate significant growth. I'd like to wrap up our discussion on active ingredient innovation this morning by sharing some thoughts on the financial implications of these investments. I will then close by refreshing everyone on our key financial policies and updating you on expectations for free cash flow generation and deployment. Active ingredient innovation is a key driver of FMC's mid and long-term growth trajectory. Our active ingredient portfolio, as Kathy and Diane have detailed for you, will provide tremendous value to growers with breakthrough modes of action and truly differentiated technology solutions.
By the end of our current five-year plan in 2023, we expect active ingredient innovation will contribute $200-$250 million of revenue, driven by the introductions of Isoflex Active and Fluindapyr fungicide. More importantly, as we introduce more new active ingredients through the decade, we expect active ingredient innovation to contribute $1.8-$2.1 billion in revenue in 2030, with total peak sales potential of $2.5-$3 billion. Importantly, this growth will be very capital efficient. Yes, we will need to invest in new manufacturing capacity to produce these new molecules. However, given the low capital intensity of our manufacturing network, we anticipate spending less than $350 million over the 2021 to 2030 period to support these new active ingredients. FMC believes technology is the lifeblood of our business, so continued investment in technology is critical to maintaining our industry-leading margins and high returns on capital.
From FMC's perspective, there's not a single lens for evaluating the right level of innovation investment. Rather, we are looking to balance across a number of dimensions. First, from an output perspective, we're driving to move at least one new active ingredient from discovery to development each year. Over time, this builds to a development pipeline where FMC will be able to bring a new active ingredient to market each year. So we want to fund discovery R&D at a level that supports this pace. Similarly, as we look at the active ingredients in our development pipeline, we want to fund the development R&D at a level that lets us maintain progress on the critical path for commercialization, whether this be field trials, regulatory studies, etc. We also want to ensure our innovation investments help maintain FMC's crop and geographic balance.
We believe this balance is a critical part of FMC's ability to deliver consistent financial results by not being excessively exposed to a single crop or geography. Further, we want to make sure that our investments in innovation are in line with key megatrends impacting our industry, especially sustainability and regulatory issues. Finally, from a financial perspective, we balance our desire to fund as many attractive projects as we can identify with our ability to afford to spend. We believe we have a cost structure that allows us to direct 6.5%-7% of sales to R&D while still delivering EBITDA margins at the top of our industry. Let's talk a bit more about what we mean by attractive. When we evaluate individual projects, we look at a number of criteria. A new active ingredient must have the potential to contribute meaningful revenue to FMC's growth.
We expect new active ingredients to be accretive to our overall margin, and as we look at the projected financial results, we target an internal rate of return on each project well in excess of our weighted average cost of capital, or WACC. Projects that fail to meet key technical hurdles or no longer meet these attractiveness criteria are discontinued. Looking at the overall portfolio, we aim for a portfolio IRR of at least twice our WACC, with a portfolio non-discounted payback period of less than 10 years. Let me now shift topics from innovation to financial policies. When we launched our current five-year plan in December 2018, we reset our financial policies to fit a focused agricultural sciences company. Our financial policies start with the balance sheet.
FMC targets average annual gross debt to EBITDA of 2.5 times or less, with some variation through the year due to seasonality of working capital. We believe this target leverage, in conjunction with other metrics and factors that the rating agencies consider, such as geographic concentration or FMC having an overfunded U.S. defined benefit pension, positions FMC as having a solid investment-grade credit profile. We believe FMC's targeted credit profile should equate to BBB/ Baa2 long-term credit rating or better, and importantly, to short-term ratings of A2/P2 or better. An A2/P2 rating allows FMC to participate as a tier two issuer in the U.S. commercial paper market, the most liquid and most cost-efficient financing pool for short-term working capital financing in the world. Commercial paper is an integral part of our operating model.
We intend to keep some amount of prepayable debt in our capital structure going forward, so we have the option to pay down debt to reduce leverage should we experience a sudden unanticipated downturn. As of September 30th, our leverage was 2.5 times. As our leverage continues to trend more firmly into our targeted range, we are hopeful our current split rating will move to a consistent BBB/ Baa2 rating. Given the strong expected EBITDA growth over the five-year plan, we could add incremental debt of up to $1.5 billion and remain in line with our leverage target. This incremental borrowing capacity is an important additional source of cash for deployment and complements our free cash flow, but will only be utilized within the limits of our leverage target. Turning next to our cash deployment policy. Our first and foremost priority is to fully fund our growth.
This includes organic growth, investments in R&D and CapEx, as well as modest inorganic investments that enhance our organic growth, such as our recently completed acquisition of the remaining rights to Fluindapyr and our recent venture investments. These modest inorganic growth opportunities are expected to be in the tens and fifties of millions of dollars, not the 100s. After fully funding growth, we will return the remaining cash available to shareholders through dividends and share repurchases while keeping debt at our targeted leverage levels. FMC's dividend policy is to pay what we believe to be a market median dividend, 25%-35% on a dividend payout ratio basis, growing the dividend at least at the same rate of net income growth. We reset our dividend to this policy in December 2018 and then raised our dividend 10% in December of 2019.
We will be reviewing our dividend again with our board of directors next month. Finally, the substantial remaining cash will be returned to shareholders via regular share repurchases. As you're aware, FMC paused share repurchases earlier this year in light of the global pandemic and its impact on short-term financing markets. As financial market conditions have stabilized and with continued strong performance of our business despite the pandemic, we resumed share repurchases in October and expect to repurchase $50 million of shares in 2020. At year-end, this will leave $550 million remaining under our existing $1 billion share repurchase authorization. We intend to utilize this authorization to make regular share repurchases using cash generated by the business as well as incremental debt capacity. We plan to seek further authorization from our board of directors as we approach exhausting the existing authorization in the coming quarters.
When we launched our current five-year plan, we outlined our plan to drive significantly higher free cash flow generation and conversions. It's important to note that when FMC talks about free cash flow, we mean the cash flow remaining after fully funding growth, covering all legacy liabilities and paying for any transformational expenses such as M&A integration or large-scale systems implementation. The free cash flow we reference is intended to be the cash available to pay dividends, make modest inorganic growth investments, and repurchase shares. We continue to expect to generate cumulative free cash flow of up to $3 billion over the 2019 to 2023 plan period, which combined with the incremental borrowing capacity resulting from our expected EBITDA growth will provide us with up to $4.5 billion of cash that can be deployed.
Of this up to $4.5 billion of deployable cash, we would expect approximately $1.3 billion to be returned to shareholders via dividends, with the remainder either returned to shareholders through share repurchases or utilized to make modest inorganic growth investments. So how are we doing the first two years of the five-year plan? By year-end, we will have deployed nearly $1 billion, with the vast majority of this returned to shareholders nearly equally across dividends and share repurchases. To do this, we're utilizing all of our free cash flow, as well as incremental borrowing capacity. And as you can see on the right-hand chart on this slide, with the rapidly growing free cash flow expected over the remaining three years of our five-year plan, we will see the mix of deployment shift much more heavily towards share repurchases and inorganic growth as opposed to dividends.
Turning to the next slide, to deploy significant cash requires FMC to generate strong underlying free cash flow. As you can see on this chart, we're making good progress, growing free cash flow to $500 million this year at the midpoint of our guidance range. This translates to free cash flow conversion from net income approaching 60%, a huge step up from 2018 and 2019. Looking forward to 2023, we expect to raise free cash conversion to the 70%-80% range. There are several factors that will help us to achieve our targeted free cash generation and conversion: strong underlying EBITDA growth, working capital improvement with greater visibility, and improved working capital management tools provided by our new SAP system. An end to the period of significant transformation spending with a roughly $100 million free cash flow tailwind in 2021 following the completion of our SAP implementation.
Finally, relatively stable legacy cash spending becomes a smaller proportion of our earnings as earnings grow. Before I close, I'd like to walk through why we believe FMC remains a compelling investment opportunity. We expect significant growth through 2023, with revenue and EBITDA target compound annual growth rates of 5-7% and 7-9%, respectively. We expect EBITDA margins to expand nearly 300 basis points to approximately 29%. EPS is expected to grow faster than EBITDA. ROIC is forecasted in the mid to high teens, and cumulative deployable cash is expected to reach up to $4.5 billion. There are several longer-term factors that further support sustained value creation beyond the 2023 horizon. This starts with continued above-market organic growth driven by our advantaged product portfolio, crop diversity, and geographic balance.
As you saw today, we have a strong innovation pipeline with material financial contribution through the end of this decade. Our capital deployment policy is disciplined and will return significant cash to shareholders. And finally, we expect our structurally low tax rate to remain well below that of our peers, driven by our geographic sales mix and the durability of our tax structure. In summary, as a pure-play agricultural sciences company focused on delivering crop protection solutions, FMC is poised to continue delivering above-market growth with industry-leading margins. We have a fully funded growth plan to deliver solutions for growers around the world while generating significant excess cash. And we remain committed to returning this cash to shareholders through dividends and share repurchases while continuing to look for modest inorganic technology investments to accelerate our growth. With that, let me turn the call back over to Mark for closing comments.
Thank you, Andrew. We hope you've enjoyed our technology update and have gained a deeper understanding about our new products coming out of our R&D pipeline, as well as how we value products as they're introduced into the marketplace, the FMC investments and external collaborations that are broadening our technical capabilities, and the financial impact of these investments. Our pipeline, which we expect to deliver nearly $3 billion in revenue when the active ingredients reach peak sales, continues our pattern of growth with an emphasis on specialty crops. Just as importantly, the growth from the new active ingredients will be geographically balanced, the same as our current portfolio, an important aspect that drives predictability of revenue growth. As I had mentioned in my earlier remarks, we are coming to the end of the second year of our five-year range plan, originally presented in December 2018.
We are tracking well against our key targets, and we are highly confident that our new technologies will drive and sustain growth over the next decade and beyond. I'd like to thank you for your attention, and we'll now turn the call back to the operator for Q&A.
And we will now begin the second question and answer session. Please limit yourself to one question only. If you have additional questions, you can jump back into the queue, and our first question today will come from Chris Parkinson with Credit Suisse. Please go ahead.
Great. Thank you. Slide 44 was pretty impressive in it's meant to feed plenty of disease control actives in addition to Fluindapyr.
But when we take a step back and think about your pipeline holistically and the absolute dollar contribution of these launches ramping versus the cannibalization rate, which you cite as limited, is your lack of concern on the latter due to an existing low fungicide exposure or potentially both the fact that a lot of the herbicides and insecticide launches don't necessarily have a ton of overlap with your existing portfolio? So just how should we think about the different substrates of the market you're now targeting? Thank you.
Yeah. Thanks, Chris. Yeah, I'm not concerned about how this chart looks. When you think about it, we have a pretty good balance between not only synthetics and biologicals, but also herbicides, fungicides, and insecticides.
I think what you'll find here is that as we go through the latter years of this chart, that we start to see other opportunities and we build them out. I think Diane mentioned that quite well, the fact that we originally target a certain crop in a geographic location with a certain type of pest. But frequently, we find ourselves expanding that out rapidly over time. And I don't think all of that is fully reflected in how we've built out these plans. So I'm not necessarily concerned about you see a lot of fungicides coming early and then not so many later. I expect that to continue to evolve. But overall, it's well balanced, which is what we like.
Thank you.
And our next question will come from Adam Samuelson with Goldman Sachs. Please go ahead.
Yes. Thank you. Good morning, everyone.
So I guess I wanted to just try to roll it all together a little bit. And first, as you look at the pipeline and the diversity within it, is there anything in here to suggest that the EBITDA margin profile wouldn't approximate or be consistent with your current kind of on-patent chemistries? And then if I think about the top line, if I'm modeling out the growth and getting to around $2 billion of revenue contribution by 2030 and thinking about the base business today with the DMIs and the rest of the portfolio, that 5%-7% growth CAGR, I know it's only through 2023, but it would seem like that's a very achievable kind of benchmark to think about through the decade at this point. And I just want to make sure I'm thinking about that right.
Yeah, Adam.
So listen, from a margin perspective, when you introduce new patented technologies, they are genuinely at a higher margin than your current portfolio. Now, I think what you'll also find is over time, especially, we're talking long timelines here. We're talking almost a decade. There will be products in our portfolio that are dropping out of the portfolio. We either will be, from a sustainability perspective, removing them proactively ahead of regulatory change, or we will be removing them because we have better products coming along, some of the cannibalization that Diane talked about earlier. So yes, I would expect margins to at least stay where they are, perhaps go up slightly as these new products get introduced. You've got to remember that our margins are very high to start with. We have an extremely high margin portfolio. So you're comparing bringing something into an already high base.
So you've got to put that in perspective. With regards to growth, listen, we've only forecasted out through 2023. We have not thought about what occurs after that. Five to seven, it's not a bad range depending on how you think about where the DMIs sit, where the rest of the portfolio moves, and some of the you think we say, generally speaking, about a 1.5% drag on growth as we remove products from the portfolio. I'm not going to commit to five to seven at this point. We have a lot of work to do to continue our plan through 2023. But beyond that, I'm sure everybody's going to be modeling everything from low single digits into the mid range. But right now, I'm not going to put my pen to paper on any of those numbers.
All right. Thank you.
Our next question will come from Laurent Favre with Exane BNP Paribas. Please go ahead.
Yes. Good morning. Mark, on that point, I guess in 2018, you had complete contribution through 2030 between new actives at $1.8-$2.1, which was reiterated today. But you also had incremental sales from new formulations of existing actives at $700-$900. I was just wondering if you had any new thoughts around that range. Can that be confirmed?
No, not at all. We really focus this on the new active ingredients, not what we call the development activities that continue on through the regional growth footprint. So you shouldn't think of that as if that number has suddenly disappeared. That number is there. We just didn't highlight it here. Perhaps we should have done that.
But overall, I think that that number is still well within the bounds of how we think about our formulation and development activities at the regional level. This is more focused on the brand new technologies, the more global molecules in nature.
Thank you. And then if I can squeeze just one in on Isoflex IP landscape. You've provided quite a few details on patents on materials through the 2030s for many of the new products, but not on Isoflex. I'm just wondering if the IP landscape on Isoflex is any different to the one on other new products.
Yeah, it is. It is different. Kathy, do you want to talk about the IP landscape for Isoflex?
Sure. When we were bringing it as we bring it to the development pipeline, we do not have the composition of matter patent because of earlier disclosures in an FMC patent.
But what we've done in order to have an ability to have patents is that we've done a lot of work around the manufacturing, around the mixtures. As you heard, Diane and I talked a lot about the mixtures with IsoFlex and then, of course, with the commensurate formulations. The other thing that I want to add as well is, in addition to patent protection, there's also data exclusivity in key markets as well. So we'll be having that when we launch in certain regions.
Thank you.
Thank you.
And once again, if you have a question, please press stars and one, and please limit yourself to one question only. Our next question will come from Frank Mitsch with Fermium Research. Please go ahead.
Yes. Hi. Good morning and appreciate the detailed review on innovation.
I want to come back to the comment on R&D spending reaching 100% on sustainable products by 2025. I'm just trying to get a frame of reference as to how does that compare with where you are today and where you may have been a couple of years ago. And just in general, how do you think about the expected ROI on your spending on sustainability initiatives versus what it has been historically at FMC? Higher, lower, the same? How do you think about that?
Yeah, Frank. So I think today we're at 95%-96% of our spend is on sustainable products. Some of that spend that's not what we would consider sustainable is some of the defense of current molecules. That will obviously dissipate over the next couple of years, and we will be at that 100% level. So we have improved over the years.
We've been very deliberate in what we're focused on in terms of regulatory spend to defend molecules and also bring new molecules to market. From the sustainability standpoint and the return on that investment, we're early on in the process of thinking through the investments we're making in sustainability. But I can tell you that many of them are, when we think about the organization, they're becoming table stakes. So this is not a case of saying, "We always like to spend money on this," or, "We'd like to invest in this area." I can tell you now, diversity and inclusion, our employees are expecting us to have a more diverse workforce. So it's not a case of, "Can we invest in different recruitment techniques? Can we look at different talent pools? Can we think about the minorities in the organization?" We have to do that.
As we look to attract the best chemists in the world, the best commercial people, marketers, finance people, whatever they happen to be, they're looking at our organization in a very different way today than they ever did before. So that return on that investment, that's table stakes for us. Now, there are other elements of sustainability that we look at our manufacturing and procurement groups when it's investment in treatment of waste materials or treatment of water or low-energy pumps to drive utility down in the facilities. There we have investment profiles that are very similar to what Andrew talked about in terms of how we value R&D. So they are there at the very detailed level of what I would call the more nuts and bolts and mechanics of sustainability. They are more table stakes as we move into new areas of sustainability.
Thank you so much, Mark.
And our next question will come from Joel Jackson with BMO Capital Markets. Please go ahead.
Hi. Good morning, everyone. Just following with some earlier questions, as you start to see some of the diamide opportunity roll off for the decade or it changes for sure. I know you went to 2023 and kind of the EBITDA guidance. How does that affect what you see for 2030 in terms of sales, in terms of EBITDA? What are some of the offsets here from this great growth you have planned?
Yeah. We've not been public, and we've not modeled what we think will go with the DMIs when it comes to overall revenue growth. And we do see those franchises still continue to grow as we go through the decade.
I think the number that I've talked about in the past, that 1.5% drag on the top line, I think that's a good number to put in there long term. We've seen it ourselves over the last five to seven years as a number that's pretty consistent. We've had more this year. I think we're at about 3% given that we removed one major product at the end of 2019 that impacts this year. But a 1.5% number is not a bad number to use. And obviously, we haven't put anything out there about the longer-term growth after 2023. We will be doing that, but it's a little early at this point.
Thank you.
And our next question will come from Michael Piken with Cleveland Research. Please go ahead.
Yes. Good morning. Thank you for the detail.
Just a question in terms of how you're thinking about kind of the regulatory environment in Europe and North America and basically just how you think about that when you're choosing which projects to invest in. And then also, what type of ROIC do you need relatively to go into a riskier market, let's say, in Asia or Latin America versus in some of the more developed markets? Thanks.
Yeah. Thanks, Mike. Thinking about the regulatory environment, I'll let Andrew talk about the returns. So for us, it is a long-term view, as I said. It's a 10-year view, close work between marketing and the regulatory groups. I mean, one thing's for sure. If you look back 10 years and where we are today, things have played out pretty much as you would expect. Europe has had a tighter regulatory regime, which is now expanding around the world.
We don't see that slowing down at all. The Green Deal, the Farm to Fork activities, obviously, they've given a broad brushstroke around their expectations. There's a lot of detail to be hammered out there. I think it's fair to say when Kathy and Diane sit down and look at the investments we're making, we assume a more aggressive regulatory regime 10 years from now than it is today. As I said earlier, we have stopped projects because we don't believe they will pass regulatory hurdles in the future. That will continue to occur. So we take a very conservative view to how we view the regulatory investments. I mean, think about it. We have to spend $260 million to bring a big molecule to life. You better be sure that you've got the regulatory environment worked out before you really enter into that large-scale spend.
It is a big area of focus, yet we are conservative when we think that through. Andrew, do you want to talk about the return?
Yeah. I think, Joel, certainly, when we're looking at it, we're looking on a project-by-project basis, and we're thinking about all the different factors that influence the economics. It's really a product-specific NPV IRR model in terms of analytical construct. What we're trying to deliver out of the portfolio projects is a return on those projects that's about twice our WACC, and our WACC's roughly 10%, in that ballpark. It is a very high return, and that return's intended to have a spread on it to reflect a lot of those risk factors that you're pointing to, both regulatory, if there might be country-specific risks to it, other performance issues that might come up.
That's all about trying to put a margin of safety, if you will, well above what a fair, break-even return on the investment ought to be. I wouldn't say that we do a specific country-level adjustment necessarily unless there's a capital investment in a specific geography required. But given how global our business is, that's not a huge differentiator for us in the way we're thinking about the risk. It really is driven much more about the product technology, the regulatory environment, the strength of the value proposition to the farmer, and then, again, driving the economics to have a strong margin of safety above our cost of capital.
And our next question will come from Michael Sison with Wells Fargo. Please go ahead.
Hey. Good morning. Thanks for the presentation.
Just curious, when you take a look at the pipeline from 2021 to 2031, what are the major regulatory issues or risks? I would imagine you've got 2021 pretty much all set and maybe 2022. But when you look beyond, what are the hurdles that your molecules have to get through that could put some of these launches at risk? Or do you feel pretty good about those, and these are pretty good visibility?
Yeah. Well, as Mark mentioned already, we take into—this is Kathy—we take into account the regulatory regimes as we see them today and as they're coming. One of the areas that I would say we're learning a lot about right now is as we bring molecules through renewal. So they're already on the market, and you want to renew them to remain on the market in the European Union.
There are new tests required around what they call endocrine disruption, which is an endpoint that has been talked about for a while, but there hasn't been a lot of actual tests or test results that you've been generating. And so as we go through that process of renewing molecules, we're running some of these tests with our contract research organizations for the first time. So we'll factor those learnings into these pipeline molecules as well as we go forward and, of course, bring that back into our screening process as well. So that's one area that I think is shifting and we're learning from.
And our final question today will come from John Roberts with UBS. Please go ahead.
Thank you. Andrew, I think you mentioned $350 million in manufacturing investment to support the new products.
It's about $35 million a year, I guess, on average, or about a third of your 2020 capital budget. Are you going to outsource all of the active ingredients, and that's just formulation spending?
No, no. I think John first said yes. The $350 million is over a 10-year period. It's a bit lumpier than that and then more back-weighted in the middle and the second half of the decade. A lot of the investment is actually in FMC-owned facilities. As we've gotten some better scale on manufacturing with our sites in India and Denmark and Puerto Rico and the U.S. and Mobile, Alabama, there's tremendous opportunities for us to do very cost-efficient expansion of capacity. We have pretty significant existing infrastructure. We can basically put in just the productive equipment. We've already got utilities. We've already got buildings.
So it allows us to be very, very capital-efficient using those resources. We will also use some of our toll partners as a part of the strategy to make sure we're not single-sourced on molecules and we have good resilience in supply chain. So it is a balance of those factors. But I'd say different than our historical profile, it is much more heavily weighted towards internal investment and taking advantage of the infrastructure and available capacity we have through these active ingredient manufacturing sites and this network we've built over the past several years.
And thank you all for participating in our virtual event. That's all the time we have today. Have a good day.
This concludes the FMC Corporation Conference Call. Thank you for attending. You may now disconnect your lines at this time.