Dec. 6, 2016
Kumiai Chemical Industry Co., Ltd. and Ihara Chemical Industry Co., Ltd., two Japan based agrochemical manufacturers, have entered into a business integration agreement. Both the companies are involved in the manufacturing and supply of agrochemicals. As per the deal, Ihara Chemical Industry, the absorbed company, would be responsible for the manufacturing of active ingredients and Kumiai Chemical Industry would be handling commercialization and sales. The merger agreement is expected to be concluded by December, 2016 and May 1, 2017 is expected to be the effective date of the merger.
The agrochemical business, which is the core business of both companies, is currently undergoing major changes in its business environment in Japan. Meanwhile, worldwide, against a backdrop of population increases and economic growth in developing countries, the importance of agricultural production has been increasingly on the rise. Given the perpetually changing business environment surrounding the agriculture and agricultural chemical business both in Japan and worldwide, these companies have concluded that by deploying the following growth strategy, the integration of companies will provide the best opportunity to win out over the competition and maximize corporate value:
(1) Unify processes, which thus far have been handled separately, ranging from the creation of agricultural chemicals to active ingredient procurement, formulation and sales, so as to consolidate and maximally leverage management resources and thereby enhance competitiveness.
(2) In the core agricultural chemical business, utilize the strong relationships of trust with customers, technologies, and know-how that we have cultivated thus far to raise the capacity to develop innovative agricultural chemicals, and to enhance and promote business in Japan as well as in countries and regions worldwide and in Asia in particular, thereby achieving continued growth.
(3) In the fine chemicals business, utilize the strong relationships of trust with customers, technologies, and global procurement capabilities that the companies have cultivated thus far in order to maximize business value.
(4) Through information centralization, make decisions quickly and precisely so as to minimize business risks; build a stable business foundation and expand corporate scale through the appropriate allocation and effective use of integrated management resources.
(5) Increase profitability using various cost reduction measures.