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Sumitomo Corporation acquires Brazilian ag supplies distributor Agro Amazônia
Oct. 15, 2018
Sumitomo Corporation
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BrazilSumitomo Corporation has reached an agreement with shareholders of its subsidiary Agro Amazônia Produtos Agropecuários Ltda. to acquire further shares of Agro Amazônia to make it a wholly-owned subsidiary. Sumitomo Corporation currently owns a 65% stake in the Brazilian agricultural supplies distributor.
Agro Amazônia Produtos Agropecuários Ltda. was established in 1983. Operating in the state of Mato Grosso and surrounding areas, it is one of central and western Brazil’s largest distributors of agricultural supplies. The vast area of Mato Grosso (about 2.5 times the size of Japan) and its favorable climate make it Brazil’s major producer of agricultural and livestock produce, including soybean, corn, beef and cotton. Mato Grosso is a large agricultural supplies market with continued growth potential. It also presents a challenging business environment, easily affected by grain price fluctuations and subject to ever-fiercer business competition.
Sumitomo Corporation has invested in Agro Amazônia since 2015, contributing to its rapid growth through the application of financial, procurement, and management know-how. Sales in fiscal 2018 are expected to more than double since investment was begun. Fertilizers are an especially strong growth area, with sales volume expected to reach approx. 200,000 t in fiscal 2018 from 40,000 t at the start of the investment. Agro Amazônia has worked to establish its own brand of products, and expand and improve its product portfolio in areas other than fertilizers as well, and remains a top seller of agricultural supplies in Mato Grosso as a result.
By acquiring additional stakes in Agro Amazônia, Sumitomo Corporation aims to further leverage its extensive global and industry networks, strengthen procurement, and develop new products and services to further strengthen its business footing. The company is also looking to boost Agro Amazônia’s operations by expanding its sales area, increasing the number of sales locations from the current 31 to accelerate expansion into surrounding states.
Initially an exporter of Japanese agrochemicals, Sumitomo Corporation’s agrochemical arm has extended its value chain to become an importer and distributor operating in 33 countries outside Japan. As a distributor of fertilizers mainly in Japan, Asia and Oceania, Sumitomo Corporation has established its own end-to-end value chain covering everything from the import of fertilizer materials to production and direct sales to farms.
Sumitomo Corporation is expanding geographically in direct sales of agricultural supplies as well, not only investing in Agro Amazônia and Romania’s Alcedo S.R.L., but also planning to participate in the operation of Ukraine’s Spectr-Agro LLC. Sumitomo Corporation looks forward to contributing to agricultural production worldwide through services fine-tuned to the unique agricultural needs of countries and regions.
Source: Sumitomo Corporation
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