Annual Review: Large Acquisitions in Global Special Fertilizer Sector in 2018

In recent years, with the transformation of crop planting, the improvement in planting technologies and the growing demand by consumers for increased quality in agricultural products, special fertilizers are increasingly favored by the agri-input market because of disadvantages of using traditional chemical fertilizers, such as causing soil compaction and low utilization rates. Looking back on 2018, the global special fertilizer sector still grew at a high compound annual growth rate, as cooperation, mergers and restructuring between companies were reported from time to time. Through these events, it is predictable that the global special fertilizer sector will evolve in a form, from small to large in size, from scattered to centralized in production, and from single to diversified in product variety.

Event 1: Valagro acquired Grabi Chemical
 

In July, Valagro, an Italian biostimulant producer, completed the acquisition of Grabi Chemical through its Industrial Business Unit, to further improve its product portfolio and market presence in the field of microelement fertilizers.
 

Grabi Chemical is a leading global manufacturer of chelated microelements (EDDHA, EDDHSA, DTPA, EDTA, LS), complexes and other nutrients which are exported to more than 40 countries and regions around the world. The chelated microelements and channel networks of Grabi Chemical effectively make up the deficiency of Valagro in the field of microelement fertilizers and contributes to the formulation and implementation of integrated solutions by the company.
 

Valagro divides its global market into four regions, including the Americas, Europe, Italy-Africa-the Middle East, and the Asia Pacific region. The Americas are one of the most important cores of Valagro. In the past two years, Valagro's market expansion in the Americas was frequent. In May 2018, Valagro announced the construction of a new plant in the United States to better serve some of the most important North American strategic markets, such as the United States, Canada and Mexico. As early as June 2017, Valagro's new plant for the production and filling of biostimulants and water-soluble fertilizers in Sao Paulo, Brazil, was completed and put into production. This plant has become an important strategic production and logistics base of Valagro in Brazil, and throughout the South American market, contributing to consolidating Valagro's position in existing and new markets.

In May, Tradecorp, a Spanish biostimulant producer, acquired Idai Nature, a Spanish biopesticide company, which is regarded as a strong combination of a biostimulant company and biopesticide company. Tradecorp belongs to Sapec Agro Business and operates in the Specialised Nutrition sector, with business in more than 80 countries. Idai Nature is a fast-growing biopesticide company, dedicated to “Zero Residues” agricultural products. The acquisition of Idai Nature is part of a strategic layout of the company to provide growers with integrated crop solutions that ensure  “Zero Residues”.
 

Due to the advantages of natural origins, environmental protection and no residue, biological formulation products, such as biostimulants and biopesticides, have become popular  in the sector in recent years. Biostimulants are mainly used for improving crop resistance to stress, while biopesticides are applied for pest control. In the past five years, the increasing cooperation between biostimulant and biopesticide companies provided growers with more choices for  biological products. With the continuous development of organic agriculture, it can be expected that there will be increasing  cooperation and integration between biostimulant and biopesticide companies in the coming years.

Event 3: Grupa Azoty acquired COMPO EXPERT Group
 

In September, Grupa Azoty, the EU's second largest producer of nitrogen fertilizer and compound fertilizers based in Poland, announced the acquisition of COMPO EXPERT Group. The transaction was completed at the end of November. COMPO EXPERT Group is the world's leading producer of special fertilizers and operates in Asia, Europe, the Americas and Southern Africa. The acquisition of COMPO EXPERT Group will further strengthen Grupa Azoty's international position among the leading solution providers for the agro market. In particular, COMPO EXPERT Group's product series, including foliar fertilizers and biostimulants, can greatly complement Grupa Azoty's existing product line.
 

In recent years, special fertilizers have experienced rapid development, as the proportion of the market occupied by special fertilizers keeps rising. The momentum, however, of traditional large-scale compound fertilizer companies to continue increasing sales has been weakened, and many compound fertilizer companies have to shift to the special fertilizer sector to complete their product chains.  The purchasing of special fertilizer companies becomes the quickest  and most direct way for traditional compound fertilizer companies to enter the special fertilizer field. With the rapid development of special fertilizers, the market space for compound fertilizers  continuously shrinks. It is believed that the merger and acquisition between compound fertilizer companies and special fertilizer companies will become  more frequent in the coming few years.

Event 4: Omnia acquired Oro Agri
 

In May, Omnia Holdings Limited, a South African special fertilizer producer, completed its acquisition of Oro Agri SEZC Limited, a biological formulation company. Omnia specializes in the fertilizer and agriculture sectors, and has a clear and in-depth understanding of the core market of South Africa, as well as the mining, manufacturing and agricultural industries in Africa, with product sales in 28 countries. Oro Agri is a manufacturer of adjuvants, pesticides and foliar nutrients for agricultural, greenhouse, nursery and turf applications, with product sales in over 80 countries.
 

The acquisition of Oro Agri will accelerate the growth of Omnia's agri-inputs business. Oro Agri's established global distribution network will provide additional channels for Omnia's products and will expand Omnia's international footprint. Omnia's products mesh very well with Oro Agri's existing product line and on-going product development efforts. Being part of Omnia will not only strengthen Oro Agri's R&D pipeline, but also allow it to market a more complete product portfolio, including plant nutrients. The combination of two companies is a true joining  of complementary advantages.

Event 5: Van Iperen acquired the fertilizer and chemical crop protection businesses of Horticoop BV
 

In November, Van Iperen acquired the Horticoop BV fertilizer and chemical crop protection businesses. Horticoop BV is a Dutch cooperative and one of the largest horticultural suppliers in the Netherlands, with a history of 100 years, especially in the supply of greenhouses. The acquisition involves the distribution hub in De Lier and the collection depot in Takzienaveen, two important regions of the horticultural market in the Netherlands.
 

Van Iperen expanded its presence in the segment of horticulture with  this acquisition. At present, many Horticoop customers in the northeastern Netherlands are using Van Iperen's liquid fertilizers, and Van Iperen will provide more services to these customers after the acquisition of Horticoop. Van Iperen will also take over the responsibility to provide professional services to existing customers of Horticoop in its other fertilizer and chemical crop protection businesses. Through this acquisition, Van Iperen strengthens its leading position in Dutch agribusiness.

Event 6: Yara acquired Brazil's Galvani Indústria, Comércio e Serviços S.A.
 

In October, the Norwegian company Yara International ASA reached an agreement with the Galvani family to acquire 100% of the shares in Galvani Indústria, Comércio e Serviços S.A.

Yara is the largest producer and supplier of plant nutritions in the world. Its main products include compound fertilizer, urea, calcium nitrate, nitrate nitrogen fertilizer and other high-quality fertilizers. Galvani is the first super phosphate plant in the State of Bahia and the second largest national sulfur plant in Brazil. As of now, Galvani is still the largest fertilizer plant in this region.
 

In December 2014, Galvani and Yara established a joint venture, named Galvani Indústria, Comércio e Serviços S.A. Yara held a 60% stake in the joint venture and was responsible for mining, processing, industrialization and distribution of phosphate fertilizers. Through acquiring the remaining 40% stakes in the joint venture, Yara has secured  full ownership of key production assets in Brazil, along with complementing  its extensive distribution capabilities and achieving  a more integrated position in the Brazilian market.

Event 7: DE SANGOSSE acquired Biologicas Canarias and Biotecnologia del Mediterraneo
 

In September, DE SANGOSSE acquired the  Biologicas Canarias and Biotecnologia del Mediterraneo companies based in Valcencia, Spain, which are merging to form a new company, Biologica Nature. Biologicas Canarias and Biotecnologia del Mediterraneo are key players in the field of biofertilizers and biostimulants. Both companies have been successfully operating for over 20 years in Spain, and several other European countries, in developing and marketing a range of special fertilizers using an innovative and specific process based on microorganisms.
 

The newly formed company, Biologica Nature, will benefit from the additional resources provided by DE SANGOSSE to continue and improve the development of new products, in collaboration with the Group's Research & Development laboratories. DE SANGOSSE's international presence will promote the marketing of the speciality products produced by Biologicas Canarias and Biotecnologia del Mediterraneo. Being part of DE SANGOSSE, the technology development, registration and marketing process of the product series of the two companies will be accelerated. Through this acquisition, DE SANGOSSE is consolidated with an innovative portfolio of biofertilizers and biostimulants, as well as the solid expertise in micro-organism-based solutions for accelerating its strategic development.

Event 8: Sipcam Oxon acquired Sofbey SA
 

In June, the Italian company Sipcam Oxon acquired 100% of the Swiss company, Sofbey SA. Sofbey SA is a company specialized in innovative biostimulants, with product sales in more than thirty countries. Sipcam Oxon is a global agrochemical player and ranked among the top 15 in the world.
 

Acquisition of Sofbey is part of Sipcam Oxon's program of expansion in the biostimulant and special fertilizer market. The company will focus on a high quality and innovative product portfolio in the future.

Event 9: Concentric Agriculture acquired ATP Nutrition
 

In April, Concentric Agriculture, an American special fertilizer producer, completed the acquisition of ATP Nutrition, a Canadian plant nutrition company. Concentric Agriculture, formerly called Inocucor, is an American biological formulation and plant nutrition company, and ATP Nutrition is a leading plant nutrition company in Canada.
 

The acquisition of ATP Nutrition further complements Concentric Agriculture's existing core biological product portfolio, and helps drive profitability of the company in the short and medium term. Concentric Agriculture will continue to promote ATP Nutrition's micronutrient products through its existing sales teams and distributor network throughout North America.

This story was initially published in AgroPages 'Annual Review 2018' magazine. Download the PDF version of the magazine to read more stories.