Sumitomo-Nufarm pact to enable global agribusiness expansion

Sumitomo Chemical reported that its comprehensive business alliance with Australian agrochemical company Nufarm Ltd was progressing smoothly. It expects the move to add 10 bn yen ($109mn)-20 bn ye in sales to its business in agricultural chemicals including fertilizers, contributing to its corportate sales target of 170 bn yen($1.9bn) in fiscal 2012, up from 130 bn yen in fiscal 2009.

Strong factor for synergies in global market cultivation prompted the partnership, with Sumitomo supplying insecticides and fungicides primarily in the US and Europe, and Nufarm mainly herbicides in Central and South America, Central and Eastern Europe, and southeast Asia, unfamiliar sales territories for the Tokyo-based company. Sumitomo therefore acquired in April this year 20% of the issued ordinary shares of Nufarm by tender offer, after which Nufarm increased its capital by 250 mn Australian dollars, as planned, and Sumitomo completed may 5 the underwriting process for 20% of the capital increase.

Under its plan for expanded marketing through the alliance with Nufarm, Somitomo will launch this September sales in Brazil of its flumioxazin herbicide, fenpropathrin insecticide, pyriproxyfen insecticide, procymidone fungicide and etoxadol miticide, and in July sales in Indonesia of its Padan insecticide. It also has started cooperative studies with Nufarm to sell its Agrochemicals in Central and Eastern Europe, as well as Canada and Mexico, through Nufarm’s local subsidiaries, and to sell Nufarm’s products through its marketing channels in Europe, as well as in Mexico and the US. The two companies are furthermore working on the joint development of new products.

source: JCW