Interview with Sumitomo: expanding sales network to step up oversea presence

The global agriculture industry is surging in tandem with the economic and population growths of emerging markets but Japan’s agriculture sector is weakening, battered by rising imports, aging farmers, and the potential opening up of the Japanese agricultural market as a requirement for joining the Trans-Pacific Strategic Economic Partnership Agreement, or TPP. How will companies that manufacture and sell agrochemicals and fertilizers react in this environment? JCWeb is interviewing the top management of these companies to find out more about their business strategies, beginning with Kenjior Fukubayashi, Sumitomo Chemical’s senior managing executive officer.

Would you tell us about Sumitomo Chemical’s recent performance?

Fukubayashi: Our business proceeded in fiscal 2010 as planned, except for the unexpected earthquake disaster. Our domestic business reflected the integration effects of our 2007 acquisition of Sumitomo Chemical Takeda Agro. Three new agrochemicals, including an herbicide acquired from Takeda Oharmaceutical, will contribute to higher sales starting in fiscal 2011. Our overseas business took a hit from the strong yen, but our sales of methionine as a feed additive were higher than expected in the Asian region and demand was also strong for our herbicides for soybean and cotton cultivation.

What is Sumitomo’s policy for overseas development?

We are a top-ranking producer in the domestic market for agrochemicals, but our global market share is only 2%, so we want to accelerate our overseas business by expanding our sales network. Our alliance with Nufarm Ltd. strengthened our business in places where it had been relatively weak, and the effects were seen in our increased sales of fungicides in Latin America. When we contemplate partnerships with other companies, we focus on synergy potentials and mutually complementary products. We are advancing overseas development on our own as well. In January, we made an Italian agrichemical distribution affiliate our 100%-owned subsidiary. In India, we integrated three group companies, including New Chemi Industries, to realize a unified production and sales network for market cultivation.

Source: JCW