After Seven Decades to Nurture a Complete End-to-End Value Chain, Adama Takes Off from Chinese Capital Market with New Name

On January 10, 2019, Adama Ltd., the world's sixth largest plant protection company, renamed its securities from “Sanonda A” and “Sanonda B” to “ADAMA A” and “ADAMA B” at the market bell ceremony of Shenzhen Stock Exchange. As a milestone moment, it has opened a new era of rapid development and a new chapter for the company to become the only and leading China-global multinational crop protection company and restart from the Chinese capital market with a renewed international outlook.


Chen Lichtenstein, President and CEO of Adama, stated in his speech that it was the balanced global business layout that has helped the company withstand the frequently fluctuating exchange rates as well as the continuous frictions between countries.

In the past 20 years, Adama has sustained a growth rate three times as many as the average growth rate of the industry; in 2017, its sales reached 3.5 billion US dollars, achieving the best in history; it is expected to create another record in 2018.

Joining ChemChina in 2011, the company has received unprecedented strategic support. The merger of the two is expected to accelerate the company's growth, enhance its profit margins and help to usher in new breakthroughs.

Adama sets its goal to offer products of the best quality to the world. On one hand, it is introducing internationally advanced technologies, products, expertise and development concepts to China. On the other hand, it is committed to presenting China's innovation and strength to the world, so that it can function as a bridge between home and abroad.

With the combination complete and business integration ongoing, Adama will introduce the highest level of environmental protection facilities and technologies to Sanonda to build the production base as a benchmark for all enterprises along the Yangtze River.


An End-to-End Value Chain Completed by the Combination

“The merger with Sanonda has equipped Adama with a complete end-to-end industrial chain, strengthening a very significant strategic and competitive advantage. We have become flexible not only in the flow of working capital but also in the supply chain. It also allows the company to better understand the global needs and be prepared to offer more advanced products to China and lead more products to the oversea market.” Chen, the CEO and President of Adama explained the strategic significance of the combination.

The combined company has witnessed a rapid growth after the complete transaction. In 2017, it made sales of 3.5 billion US dollars, achieving the best in history; in 2018 it is expected to hit a record high. In the past two decades, Adama has been able to outperform the industry by three times as many as the average growth rate.

Chen expressed that such a large increase should be attributed to the faster growth of the off-patent sector than the average level of the industry, meaning the number of patented products going into expiration is more than those that are still in patent and newly introduced into the market.

The average growth rate of the entire industry is only 2% to 3% per year against Adama’s rate which is twice or three times faster. Excluding a number of small-scale M&A projects that the company has carried out in the past few years and only focusing on the organic growth, it still manages to develop at a rate twice more than the industry level, meaning that its annual sales will increase by several hundred-millions of US dollars.

The company has its presence in more than 100 countries with nearly 60 subsidiaries in nearly 45 countries pushing forward direct sales. It is actively engaged in all the top 20 global agricultural markets. Its combination with Sanonda implies that it is now heading for an important position in China which is vital in the agriculture community.

Holding the world's richest portfolio, Adama has more than 270 active ingredients (In total there are 550 TK in the world). It keeps introducing dozens of new ones, which will be formulated and processed into end products, bringing significant advantages to the company.

Since 2010, it has strengthened its research and development efforts. While adding more active ingredients, it is also increasing investment in unique and differentiated products, which will ensure the supply of better services and higher value-added products for farmers.

Adama is capable of managing any of the business along the full value chain from R&D to production registration and from synthesis production to sales. Take registration as an example. It can independently register in about 100 countries.

Sanonda previously had 100 registrations before the combination. After the combination, the listed company has 5,600 certificates registered worldwide and the number is still growing very fast every year. Just in 2018, the additional registrations obtained globally reached 921, manifesting a core strength of Adama to drive up its business by continuously providing differentiated products and meeting the needs of various markets.

The strength has been the major reason for Adama India surpassing competitors by sales of nearly 300 million U.S. dollars and growing to be the second largest agrochemical company only after Bayer in local market within ten years.

Innovative, Digital and Environment-friendly Technologies will be Gradually Introduced to China

Since entering the Chinese market in 2016, Adama has launched 18 new products in just two years, covering four major categories. It plans to promote 25 more in the coming three to five years and expand its penetration to 28 provinces. Meanwhile, it has also kicked off the operation of both the state-of-art formulation center in Huai’an, Jiangsu province and the R&D center in Nanjing.

Recently, the company has made breakthroughs in the acquisition of Jiangsu Anpon Electrochemical Co., Ltd., which is expected to incorporate the manufacturer into its international business and enhance its synthesis and formulation production in China.

Adama will also acquire assets related to R&D, production, formulation, sales and marketing of agrochemicals or intermediates held or controlled by Huifeng. Through this potential acquisition transaction, its aims to boost the business in both the global and home markets.

Adama is producing more formulated products by its own resources, leveraging the local advantage by making China as its home market and acquiring more to enrich its portfolio. With these activities advancing with the deepening integration, it will also introduce innovate, digital, environment-friendly   and other advanced technologies and development ideations into China in order to materialize the development goals embedded in the strategy “From China Forward”.

Talking of innovative technologies and digital solutions of agriculture, Israel is no doubt one of the most important global hubs. As a leading country of the plant protection industry, it is well ahead in many fields such as fertilizers, seeds and irrigation. It is recognized as a nation of innovation especially in the past 15 years because more than thousands of startups are active in the country exploring all kinds of technologies, 400 of which are focused on agriculture and generating improvement for plant protection.

Answering how Adama can make good use and play a role, Chen said, “we can select and recommend technologies developed by startups to our international customers in case farmers need them as one of the optional solutions. We are not making these techs ourselves but we will be the bridge, the access between startups and farmers and customers. Moreover, we are focused on designing some application equipment, such as aircraft for application. Some digital ones can precisely target lands of different size and adjust the required application volume accordingly.”

In addition, Adama will introduce the highest level of environmental protection facilities and technology to Sanonda. The company vows to do everything possible to minimize the impact of production as well as “the footprint” left in the environment in order to build the production site a benchmark for all enterprises along the Yangtze River.

Core Leap to Strengthen Core Capabilities

In order to consolidate the company's core development strength, Adama has proposed a development strategy defined as “Core Leap”. It starts from the analysis on the global agrochemical market with a value of 60 billion US dollars. All major crops, weeds, insects and diseases have been studied and all the active ingredients that will expire in the next decade are also explored to figure out all possibilities of formulations as plant protection solutions and prepare the development in the coming decades. Then the company will select different ideations and raise funds to invest with hope to usher huge potential of growth.

Following the strategy, Adama will incorporate dozens of new active ingredients to lay solid foundation for its future portfolio, double the number of its products and bring unparalleled advantages to its market development. It will become more flexible, agile and efficient in bringing solutions to farmers around the world.

At the same time, it has invested a lot of money in the application technology for pesticides and even introduced some from the pharmaceutical industry to the agrochemical industry to improve the efficiency. It will incorporate these application technologies into its portfolio to enhance the core competitiveness.

So, equipped formulation products based on new active ingredients and the patented application technology, the company will make its portfolio richer and stronger.

Development Milestones of Adama

In 1947, Agan, one of the founding members of Adama, was established in Israel;
In 1954, Makhteshim, the other founding member of Adama, was built up;
In 1998, the two chemical companies merged into Makhteshim Agan Industries Ltd. and continued to grow into a multinational group and then the world's largest off-patent pesticide company;
In 2011, MAI became an important subsidiary of ChemChina (60% of its shares acquired);
In 2014, MAI changed its name to ADAMA;
In 2017, it completed the merger with Sanonda and successfully got listed in the A-share market, creating the only China-Global integrated MNC as well as the largest pesticide player in China.
In 2018, the combined company was officially renamed "ADAMA Ltd.".
At the beginning of 2019, Adama held the name change and market open ceremony at the Shenzhen Stock Exchange.