Mitsui & Co., Ltd.: Creating a resource consolidation-based global distribution network, serving agriculture with innovation and diversification

Mitsui & Co., Ltd., is a leading Japanese general trading house that covers a wide range of businesses, including steel products, metal resources, infrastructure construction, machinery, transportation systems, chemicals, energy, foodstuffs, distribution, medical and utility services. Through its unique ″trading″ and ″investment″ hybrid business model, Mitsui has established a huge global production, supply and marketing network. 

Through IP acquisition, patent and off-patent cooperation, mergers, equity participation and third-party collaborations, the AgriScience Division of Nutrition & Agriculture Business Unit could have developed its route to the European market and US markets, serving these important markets with innovative and diversified solutions. 

In August 2022, Hitoshi Kudo, General Manager of AgriScience Division, the Nutrition & Agriculture Business Unit, was invited by AgroPages to attend the 2022 China Pesticide Exporting Workshop (CPEW). At the workshop, Kudo delivered a presentation on the mission and business strategy of the unit.

Hitoshi Kudo, General Manager of AgriScience Division, 

the Nutrition & Agriculture Business Unit, Mitsui & Co., Ltd.

Hitoshi Kudo was delivering the video presentation at the 2022CPEW in Aug, China 

Working together with customers and partners across the planet to build and grow businesses in a diverse range of fields

Mitsui & Co., Ltd., was founded in the 19th century as a business that imported new technologies from abroad. Today, it has grown into a general trading corporation with 16 business units covering a large variety of industry sectors, including minerals, energy and retail.

Mitsui operates businesses globally with a well-established global network, connecting its diversified businesses to its own global of network that creates new added value. Currently, the company has established 129 offices across 63 countries and regions. Until March 31, 2022, the company’s annual revenue was $96 billion, with gross profit of $9.4 billion, a new record high.

Organizational Overview of Mitsui & Co., Ltd.

The Nutrition & Agriculture Business Unit is engaged in the agricultural sector, with five divisions within the business unit covering upstream-downstream industry sectors, including fertilizer raw materials, such as phosphate rock, sulfur and mineral, as well as crop protection and seed production, development and marketing, and its FarmerEdge agricultural service which its IT & Communication Business Unit covers.

• AgriScience Div: Crop protection products and intermediates; seeds

• AgriSolution Div: Production and distribution of agricultural inputs; fertilizer resources (phosphate rock); fertilizer raw materials (sulfur & sulfuric acid); ETG-related business development in Africa

• NutriScience Div: Human and animal nutritional and health products 

• Agri-Innovation Dept: AgTech-related business development

• Strategic Business Development Div: Investment/project management and EPC management

Major business scope of Nutrition & Agriculture Business Unit

AgriScience Div: Resource consolidation-based global distribution platforms

The mission and strategy of AgriScience Div of Mitsui & Co., Ltd., is contributing to the sustainable development of the food and agriculture industry through ″Science″ and providing ″global distribution platforms″ in foreign markets mainly for Japanese agrochemical R&D enterprises and novel active ingredient innovators. The business tactics of the department is to cooperate with Japanese research-oriented companies to distribute products to the global market. 

- Business model and key strategy 

The key strategy of AgriScience Div of Mitsui & Co., Ltd., includes IP acquisition, cooperative biological research and development, and patent and off-patent collaborations, as well as third-party cooperation, especially with Japanese research companies, and IP joint development to expand and strengthen the operations of global distribution platforms.

Why are Japanese companies being prioritized?  

Japanese companies are leaders in R&D and introducing innovation through discovering new agrochemicals. Globally, almost half of innovative active ingredients originate from Japanese companies. Since the 1980s, some 100 out of the 350 types of novel active ingredients came from Japanese companies. Among the 35 active ingredients currently on the pipeline, 14 come from Japanese companies. The research achievements of Japanese companies are important drivers of future industry development. 

Active ingredient development and launches from multinationals

In the past, Japanese companies had limited resources for development, registration and sales outside the country. Therefore, Japanese companies opted to collaborate with multinational companies, which were meaningful only when appropriate but would make competitors stronger while not allowing the Japanese companies to accumulate sales know-how. In this case, the research and development activities of Japanese companies were compromised. 

To support Japanese companies to move forward from this negative spiral, the AgriScience Division of Mitsui & Co., Ltd. worked to increase its active ingredient development, registration and marketing capacities. Today, Mitsui is working with many affiliates, beginning in Europe and spreading to the rest of the world, while its biological product manufacturing and distribution capacities are developing robustly. Recently, Mitsui entered the markets in India and Brazil while accessing the African market through the ETG Group.  

- Territories of trade 

Affiliates of AgriScience Division of Mitsui & Co., Ltd.

In 1991, after many years of exportation, Mitsui kicked off its crop protection business operations in Europe and started the acquisition of its business. In 2022, following the acquisition of a number of enterprises and technologies, the operating income of Mitsui & Co., Ltd., increased rapidly, with consolidated revenue totaling $1.4 billion.

- Route to European market - Certis Belchim 

Certis Belchim serves as the company’s route into the European market. In 2001, Mitsui & Co., Ltd., established its subsidiary, Certis Europe. 

In 2022, Certis Europe was merged with the Belgian agricultural company Belchim Crop Protection, which resulted in formation of the new company, Certis Belchim, which currently employs 800 staff members and has an annual turnover is about €700 million, covering the entire European market and parts of the Canadian and US markets. 

Certis Belchim spends €30 million annually on product R&D and registration and has a distinctive product portfolio, where a third of its products come from Japanese suppliers who are the strategic focus of Mitsui, another third come from third parties, and the rest are own IP products such as biological products and copper fungicide. The new and old products from Japanese companies are equally important, as they make the company’s product portfolio much more diverse.   

Certis Belchim’s unique and innovative portfolio and pipeline

- Route to the Brazilian market – Ourofino

In order to develop the South American market, Mitsui & Co., Ltd., made some equity investments in the Brazilian crop protection distributor, Ourofino, in which it holds a 22% stake. Ourofino initially entered the crop protection market in the area of sugarcane crop protection, gradually extending its product portfolio to soybean, corn and cotton. Since its establishment in 2010, Ourofino has registered 46 products and has cooperated with leading Brazilian research institutions in developing tropical formulations appropriate for Brazil’s climate and conditions. The sales growth of Ourofino have been increasing steadily in the Brazilian market, having reached $340 million in 2021. 

In 2019, after making its equity investment, Mitsui brought to Ourofino its own new compounds and products from other Japanese companies. In 2021, Ourofino launched the new patented insecticide, GOEMON (Cyclaniliprole), developed by Japanese strategic partner and another shareholder of Ourofino, ISK, in 2022. A new patented herbicide will also be released. Going forward, Ourofino’s business goal in South America is to create combinations of new compounds, its own molecules and off-patent products, which are expected to facilitate the continued growth of the company. 

Ourofino’s continuous gathering and expansion of product portfolio

Construction of a robust supply chain system

When the global sales of Mitsui & Co., Ltd., reached $1billion, it realized the importance of managing the global supply chain. Out of the $1.4 billion in total sales, Mitsui produces only copper products and some biological products, while the other products come from its Japanese partners and Chinese and Indian companies.  

The supply chain management team of Mitsui offers services to both internal and external customers, providing Japanese chemical companies with procurement services, delegated processing and agency services. These Japanese companies are collaborating with many manufacturers from around the world, being mostly Chinese and Indian enterprises.

This is a very unique model of cooperation, where multiple relationships are established between industry players. For example, Mitsui & Co., Ltd., holds shares in Wuhan Kernel Bio-tech Co., Ltd., which is a Chinese enterprise with more than 40 years of experience in the production and management of microbial pesticides and fertilizers. Over the years, the two parties have had excellent cooperation, having enhanced the confidence of Japanese enterprises working with Chinese enterprises.