Monsanto Appoints Sinochem as Sole Roundup Distributor in Australia, New Zealand
The move builds on existing ties with Sinochem that involve the Chinese state-owned chemicals giant selling Monsanto's Roundup brand in China and the Philippines. It also marks the biggest push by Sinochem into the Australian market since it abandoned a 2.62 billion Australian dollar (US$2.70 billion) takeover bid for Nufarm in 2009.
Global agriculture companies are vying for a greater share of Australia's farm sector, which is located on the doorstep of fast-growing Asian economies like China that have a growing appetite for Western-style diets.
Sinochem will become sole distributor of Roundup in Australia and New Zealand in September, but can start selling it on a non-exclusive basis three months earlier.
"Sinochem has been an excellent global partner and we believe they will do an outstanding job serving our customers in Australia and New Zealand through this new agreement," Mike Frank, head of Monsanto's international row crops and global vegetable business, said in a statement.
Sinochem's Australian unit, based in Melbourne, is run by several former Monsanto executives. Managing Director Roger Angell is Monsanto's former head of Australia and New Zealand.
Mr. Angell said the deal gives Sinochem the opportunity to introduce its own products to the region, in addition to distributing Roundup.
"As our business grows in Australia we will be looking to formulate and produce some of our product at Australian plants," Mr. Angell said.
U.S.-based Monsanto's deal with Nufarm, to be terminated officially Aug. 28, was worth A$100 million in sales last year. It was the second major contract loss for Nufarm in as many months after German chemical company BASF SE (BAS.XE) said in January it plans to re-enter the Australian farm market as a solo player next year.
The termination of the Monsanto contract sent Nufarm shares plummeting 12.1% Tuesday. By 0345 Wednesday, Nufarm shares pulled back some of the losses, rising 6.6% as brokers said the fall was overdone and RBS Morgans said Nufarm is a potential takeover target.