AMVAC: Strengthening Strategic Cooperations & Alliances to Address Adverse Market Environment

 

AMVAC’s development history and target market 
 

AMVAC-Chemical Corporation (www.amvac-chemical.com) began over 40 years ago as a contract manufacturer for other companies in the agrichemical industry. During the last three decades, it has progressively acquired many branded products, intellectual property, equipment delivery systems, and manufacturing facilities that have been divested by larger peers in the crop protection sector. The company’s annual sales has grown from less than US$20 million in the 1980s to approximately $300 million today, and its stockholder equity has risen to $278 million. (Stock symbol: NYSE:AVD) 
 

AMVAC has traditionally been focused on the North American market. In 2012, the company set up an international subsidiary, headquartered in the Netherlands, with the objective of expanding its global footprint. Recently, it announced a very significant initiative to expand market access and technology collaboration in the Asia-Pacific region. The Hong Kong-based joint-venture with Chinese agrichemical leader Huifeng represents a portal to Asia with a partner who can facilitate innovation, market presence, and portfolio expansion capital investment. 
 

AMVAC’s main product series and relative advantages 
 

AMVAC has assembled a unique, value-added product portfolio consisting of granular soil insecticides, foliar insecticides, herbicides, soil fumigants, fungicides and plant growth regulators. AMVAC’s granular soil insecticides provide superior, long-lasting, at-plant/ in-furrow protection for germinating seeds and plant root systems. The company’s soil fumigants neutralize insect and fungi threats in the ground and are essential for crops that grow in or directly on top of the soil, such as potatoes, carrots, lettuce, melons, etc. AMVAC’s herbicide product line continues to expand, from our leading post-emergent corn herbicide Impact® to a number of new additions that can be used in soybeans and other crops. AMVAC’s growth regulators offer reliable control for various functional objectives, such as defoliation of cotton during harvest. Additionally, AMVAC offers a number of pest control products for consumer use and public health applications, and is a leader in mosquito control. 
 

In terms of regional products, the company has an excellent market access position in North America’s agricultural sector, focused on corn soil insecticides, post-emergent corn herbicides, cotton insecticides and harvest aids, soil fumigants for potatoes and other crops. Internationally, the company primarily offers insecticides and herbicides to a wide range of growers in Central America, South Africa, Asia-Pacific, and Europe. 
 

In addition, AMVAC is constantly evaluating the acquisition and licensing of products being divested by other companies, and the company has outstanding formulation capabilities and an active product development regimen for commercializing new products and extending the lifecycle of many existing products. 
 

AMVAC’s strategic collaboration with industry peers 
 

AMVAC has always fostered strategic cooperation and alliances with industry peers, including cooperative manufacturing, licensing, co-marketing and distribution. In 2015, AMVAC addressed the growing demand for biological crop protection products with a shareholder investment in Bi-PA, a development and regulatory organization located in Europe. With this investment, AMVAC acquired the marketing rights to Bi-PA’s present and future pipeline of products for distribution in the Americas. 
 

AMVAC has also invested in TyraTech, a firm in the United Kingdom that specializes in identifying and commercializing effective pest control products using mineral oil technology. Through the AMVAC/TyraTech joint-venture Envance, several new products have been introduced and their market potential is considerable. These products only inhibit invertebrates, and have no detrimental effects on human or animal vertebrates, and their efficacy in killing insects is equal to or greater than the effectiveness of current synthetic chemistry. 
 

“Our patent-pending SIMPAS product application technology will allow us to create additional alliances with other crop protection providers and technology companies, seeking to leverage/ utilize their precision agri investments and capabilities. Such collaboration will further strengthen our domestic and international market access capabilities,” said Bob Trogele, AMVAC’s Chief Operating Officer and Executive Vice President. (Please visit the AMVAC website to view the most recent version of the SIMPAS equipment system video) 
 

“Biological start-ups, research institutes, and research and development companies are currently approaching us for access to the SIMPAS multi-functional product application system in China and the Americas. We are an open, attractive and non-threatening partner for third-party technology since we do not compete in research, but only develop and market technology,” Trogele added. 
 

In 2016, AMVAC’s investment in China will allow partners to participate in its market access platform with a leading mainland agrichemical company (HuiFeng) and potentially collaborate with / benefit from future technology agreements. 
 

For AMVAC, it is about bringing technology to the market via strategic alliances, smart business models, and application systems to create value for customers. The company is looking for quality growth with well-managed risk, which is why investors place a high value on AMVAC’s future prospects and a high stock price/earnings multiple on our publicly-traded equity. 
 

AMVAC’s development planning 
 

AMVAC continues to pursue several key strategic corporate initiatives, covering acquisition/licensing/distribution of available crop protection and yield enhancing agri products, including biologicals; geographic expansion of its footprint on a global scale through collaboration with strategically aligned partners; global distribution of highly advanced, precision/prescription planting equipment systems; and manufacturing, formulation, development and commercialization of new specialty/functional products for both the crop protection and public health sectors. 
 

“For AMVAC’s specific objectives in Asia, AMVAC’s Asia-Pacific business plan is based on operations from Singapore and Hong Kong, two locations that have traditionally been the focal points of Asia-Pacific commerce. The Singapore subsidiary is charged with looking after the growing export of AMVAC products in the Asia-Pacific region as well as developing partnerships for global alliances and licensing in technologies with companies and public institutions in Japan, Korea, China, and India. The joint venture with Huifeng in Hong Kong combines the innovative marketing and financial strength of AMVAC with one of China’s leading agrichemical companies. Huifeng is expanding within China not only in the traditional distribution market but also in the fast-growing e-commerce arena. The Hong Kong subsidiary acts as a portal for entering into the Chinese market as well as taking Chinese technologies and products outside to the global market,” said Lawrence Yu, AMVAC’s Asia President.

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