Adama to invest US$30-50 mn in new factories in Brazil

Adama Brasil is looking to invest between US$30 million and US$50 million in new factories in Brazil for producing new active ingredients that are currently imported from China.

 

In order to do so, the project will include building a new factory in the plant of the municipality of Taquari in Rio Grande do Sul, which hosts four other units, and also in the city of Londrina, state of Paraná.

 

The president of Adama Brasil, Rodrigo Gutierrez, revealed that the factory will be operating next year and two other factories are planned for 2021. The goal is to amplify the number of active principles produced in the country from 7 to 15, increasing production by 130% until 2022, reaching 90 million liters.

 

According to him, the capital variation of investment is due to the speed of the release procedure of molecules by government agencies. “This investment will occur in fact, but will be done according to the release, the bureaucracy, which depends on several regulating agencies,” said the executive, who is betting on the high innovation rate of products to grow.

 

The expectation is to grow around 10%, compared with the previous year, when the company’s revenue reaches US$ 480 million (equivalent to R$1.5 billion in 2016). According to Gutierrez, the annual investment in research and development has been constant in all of the factories of the company. In Brazil, this investment will be US$8 million per year. “The intention is to grow every year around 5% to 10% with a high innovation rate,” he affirmed.

 

Despite betting on new products, Gutierrez highlighted that there will be investments in biological agents in the short-term. “It is a segment that we will act on in the mid-term, mostly on dead biological agents (extracts). In the meantime, we will be focused on the correct application of conventional products and on the smarter use of chemical pesticides.”

 

Adama will increase the money invested in Brazil, not only because the demand for domestic agribusiness is growing, but also because the Chinese factories for chemical pesticides are reducing production under the pressure from the Chinese government. 

 

“It is a very favorable moment for us; a Chinese company having factories outside of China. The Chinese government realized that it was not possible to produce pesticides without thinking in less aggressive ways of the environment and that the factories are slowing down,  forced by the government, which has woken up to environmental issues. The ones who have factories outside of China have an advantage.” 

 

Gutierrez further said that Chinese factories that do not meet the minimum standards of environmental safety rules are being closed. “Brazil is becoming competitive with China in the sector of agrochemicals.” 

 

In Brazil, 60% of Adama’s revenue comes from exclusive products and mixtures and 40% from generic products. Currently, it is the sixth largest chemical company in the world.