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BASF opens $1.6m inoculant plant and targets more Aussie growthqrcode

Feb. 7, 2020

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Feb. 7, 2020
BASF marketing head, Leta LaRush, and Somersby site manager, Kathleen Johns, at this week's official opening of the company's new Nodulator biological seed inoculant production line.

Droughty cropping seasons have not scorched German chemical giant BASF's enthusiasm for Australia's farm sector marketplace, with the company this week officially opening a new production line at its NSW manufacturing site.

The move follows other production upgrades at the Somersby plant in recent years and BASF's moves into plant breeding and chemical trial operations at research stations near Tamworth in NSW and Horsham (Longerenong), Victoria.

BASF has also just begun building a $49 million chemical plant in Singapore to handle six different formulation lines for the Asia Pacific market, including fungicides for Australian horticulture and broadacre crops.

Company officials have not ruled out a requirement for notably more staff and infrastructure across Australia given the company's current solid organic sales growth trends and new seed business bought from German rival, Bayer, in the past 18 months.

We've got a growing customer base, and a fast expanding business portfolio position in Australia
- Gavin Jackson, BASF Agricultural Solutions

The $1.6 million expansion to BASF's biological manufacturing operations at Somersby on the NSW Central Coast has enabled local production of the granular inoculant, Nodulator.

Until now, the pulse crop inoculant was sourced from North America, but the lag time involved in supplying Australian demand required orders to be placed up to 18 months in advance.

"We've got a growing customer base, and a fast expanding business portfolio position in Australia, so we made the decision to build our own granular plant here," said BASF's agricultural solutions head, Gavin Jackson.

"When you're looking to service cropping product demand you don't want to be guessing market conditions 12 to 18 months away."

Biological boosters

Somersby was already producing BASF's peat-based inoculant, Nodulaid, which is used as a liquid slurry seed coating at sowing to promote seedling nitrogen uptake.

The dry product alternative promotes the same beneficial soil bacteria activity on plant roots, boosting the crop growth and yield.

Mr Jackson said, importantly, Nodulator gave farmers greater flexibility, including dry sowing options and the ability to apply it via a sowing rig's small seeds box and into planting furrows.

Construction of the new production facilities began last June, with the first Nodulator product emerging by December in time to ensure sufficient supplies could be available for the coming winter pulse sowing season.

Although initial production will focus on meeting Australian demand, Mr Jackson said the site could service export demand, too.

Somersby also makes the bio-insecticide, Velifer, made from a soil-borne fungus, after a $1m investment in that production line three years ago.

The latest upgrade further utilises the company's local biological skill set.

Local expertise

"Our team has a high level of expertise when it comes to biological manufacture, so granule production fits the scope of work performed at Somersby perfectly," said Somersby site manager, Kathleen Johns.

"Adding granule manufacturing showcases BASFs dedication to local production and biological growth in the agriculture market."

Mr Jackson said the site expansion was completed in record time, and pushed ahead despite a depressing grain farming season last year.

President of BASF agricultural solutions division, Vincent Gros, with head of agricultural solutions for Australia and New Zealand, Gavin Jackson.

The upgrade was a direct reflection of the company's commitment to the market and its ability to innovate and move quickly to keep up with growers' needs.

Growth plans

"As a company we'll look to employ more people to meet our growing customer base and adjust our infrastructure needs to our growth," he said.

"We employed three staff in December and we'll likely need more as we launch more products and as weather conditions improve.

BASF, now the world's third largest crop protection company, relaunched its agriculture business in Australia in 2014 having largely left the market for the previous decade.

It now has a local workforce totalling about 110, firmly re-establishing its market position with 22 new crop protection product registrations approved for Australia in the past few years from an initial goal of 25 new products by 2023.

"That's set us up for some significant launches this year," Mr Jackson said.

"One of our ambitions is to be the market leader in broadacre."
- Vincent Gros, BASF

Globally the company has also set some big launch targets, with more than 30 major agricultural chemistry projects in the pipeline for release this decade and their projected sales worth almost $10b.

Exciting product pipeline

"I've never seen such an exciting product offering coming onto the market," said BASF's global agricultural solutions president, Vincent Gros.

"One of our ambitions is to be the market leader in broadacre."

Beefed up after its $12b spending spree on various Bayer seed and chemical business assets in 2018, BASF had emerged as a big, multifaceted global player in broadacre and horticulture markets.

"BASF is a new animal these days," said Mr Gros, who supervised the Bayer business integration and visited Australia late last month.

"We're not relying on conventional crop protection any more - we're across seed treatment, biological products, vegetable and canola and cereal seed.

"We sold more seed in 2019 than in the company's entire business history combined."

Consistent strategy

Despite drought in eastern Australia, and wet weather frustrations in the northern hemisphere, the company remained bullish about growth expectations and commitment to "consistently enlarging our portfolio".

"It's all coming together with our investment in Australia, and our significant investment in customer relationships," he said.

"A couple of years of severe drought has affected everybody in agriculture - farmers and suppliers alike.

"But farmers here are world class producers and we have very strong intentions and expectations in this market and we continue to build on our strengths, hoping the season will help us in 2020."

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