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Sumitomo launches crop protection distribution holding company in Chileqrcode

Apr. 16, 2015

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Apr. 16, 2015
Sumitomo Corporation established Summit Agro South America SpA, a holding company supervising crop protection product distribution companies in the Andes region of South America and recently started its operation, expecting to make it a prime source of earnings there by strengthening the foundations and structure of its crop protection business.

Sumitomo Corporation has been engaged in crop protection distributions in the Andes region of South America through its local companies since the 1990s. In 2001 and 2014, Summit Agro Argentina S.A. and Summit Agro Chile SpA were respectively founded ahead of the other 3 countries (Colombia, Ecuador and Peru) where crop protection distributions were conducted by Sumitomo Corporation’s local companies. The aim of having SASA, a holding company started up this time, is to place all operations in the aforesaid five countries under SASA’s purview by newly founding SASA’s subsidiary company and branches in Colombia, Ecuador and Peru at the same time. Under the concept mentioned above, each Summit Agro company will pursue opportunities of new developments and new commercial rights by accelerating collaborations and alignments one another in the field of sales, marketing and development heretofore pursued independently by country. SASA will play a role of bringing greater efficiency and sophistication to those alignments and business operations in line with medium- and long-term strategies and encouraging each Summit Agro to share and take advantage of their knowledge and know-how on market characteristics, industrial regulations and legislations.

South America accounts for more than 20% of the world’s market for crop protection products, and the market in the Andes region has seen particularly notable growth. Sales in this region came to US$2.1 billion in 2014 (5% of crop protection products sales worldwide) and, given the region’s high agricultural production potential stemming from the temperate climate along the Andes and crop diversity, this market should see annual growth rates of 3%-4% over the long term. This market is deemed particularly suitable for Japanese crop protection manufacturers, who offer numerous products that are highly effective for a wide range of crops.

Sumitomo Corporation’s crop protection business got started in earnest in the 1970s with the export of crop protection products produced by Japanese manufacturers. After adopting a strategy of intensifying its efforts downstream in the value chain, Sumitomo Corporation extended its distribution business to more than 30 countries in the Americas, Europe and elsewhere, and its sales are now on the order of 100 billion yen annually.

In 1995 it established Sumi Agro Europe Limited, a holding company covering nine European countries, including France and Poland, and it has boosted its distribution business in Europe by promoting the development of products. In the Andes region of South America, it is employing the know-how and knowledge cultivated over long years by Sumi Agro Europe Limited to improve the efficiency and sophistication of its business operations in the hope of leveraging the market’s growth to nearly double its sales to US$120 million by 2019.

The region extending north and south along the Andes from Colombia to northern Chile encompassing Argentina, Chile, Colombia, Ecuador and Peru.

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