Sumitomo allying with Sipcam in Europe agrochemical market

Sumitomo Corp. and Italian agrochemical producer Sipcam S.p.A. have agreed on a strategic alliance, to start in the beginning of 2012, aimed at expanding their agrochemical businesses in Europe.

Under their agreement, the Tokyo-based trading house’s wholly owned subsidiary Sumi Agro Europe will establish a holding company named SAE SH while Sipcam S.p.A. will establish a similar holding company named Sipcam SH, and Sumi Agro Europe and Sipcam S.p.A. will take stakes in each other’s new holding companies. The shareholding structures are still to be decided.

Sumi Agro Europe has sales bases in France, Poland, Hungary, Romania, Czech Republic and Bulgaria, and also sells agrochemicals in Russia and Ukraine. It is closely trailing global agrochemical producers in its sales of agrochemicals in those countries but has little presence in Western Europe, other than France, and Southern Europe. Sipcam S.p.A. has sales bases in Italy, Spain, Portugal, Greece and the UK and is ranked 15th in the world in terms of agrochemical sales but has yet to develop Eastern European markets.

Sumitomo Corp. distributes agrochemicals in more than 20 countries through its subsidiaries, and its share of the global market is by far the largest among distributors without production functions. It aims to soon place among the world’s top 10 suppliers of agrochemicals with its expanded coverage of Europe, which accounts for about 20% of the global market, and a plan to enhance its US presence in the near future.