Off-patent agrochemical specialist Nufarm is to acquire a portfolio of former Syngenta and Adama Agricultural Solutions assets in Europe. The move is in line with the regulatory conditions around ChemChina’s completion of its purchase of Syngenta earlier this year – the Chinese company was already a majority shareholder in Adama.
Syngenta and Adama have reached a binding agreement with Nufarm over the sale of a portfolio of crop protection products for $490 million. The package includes off-patent formulations of herbicides, fungicides and insecticides, as well as other product categories, marketed in the European Economic Area. There are no premises or staff involved in the transaction, which is expected to take place in Q1 2018. At that point, Syngenta will also sell stocks of the products in question to Nufarm.
The deal follows ChemChina’s undertakings to the European Commission over its acquisition of Syngenta. However, the Commission and European Competition authorities have yet to clear the divestment and approve Nufarm as a suitable purchaser as stipulated under the commitments.
● Nufarm has agreed a long-term extension of its collaboration agreements with Sumitomo Chemical Company, which has held a shareholding in Nufarm since 2010.
The agreement largely concerns Sumitomo’s fungicide pipeline, with the development and distribution of a number of high value prospects to manage plant diseases, especially in the face of growing resistance to current compounds. The first market is likely to be the control Asian Soybean Rust in Latin America, using Sumitomo’s proprietary fungicide chemistry in combination with Nufarm chemistry.
Nufarm has reported increases in profitability and sales for its latest full year of trading, despite an overall global contraction in the crop protection market, particularly in Europe.
The Australian multinational made a statutory net profit after tax of $114.5 million on revenues of $3.1 billion in the 12 months ended July 31st 2017, compared to $27.5m and $2.79bn in the previous year. This is also after $23 million in one-off global restructuring and asset rationalisation costs.
“It was a challenging year for the industry, with extremely competitive conditions driven by lower crop prices and lower demand for crop protection chemistry,” says Nufarm managing director and chief executive Greg Hunt.
“Nufarm posted strong revenue gains in Australia, North America and Asia. While South American sales were ahead of the prior year, market conditions in Argentina led to a significant fall in the profitability of that business. European sales were slightly down, but margins improved leading to a stronger profit outcome.
“We secured market share gains in most of our major markets, supported by new product introductions, and a much closer focus on our customers. We expect to achieve further growth in the current financial year and continue to assess opportunities that might arise from broader industry consolidation moves.”
The company has a proprietary omega-3 oilseed rape breeding program pending approval by the regulatory authorities in Australia, the US and Canada. It hopes for a commercial launch in 2018/19 of oilseed rape varieties with an oil profile containing similar long chain omega-3 fats to those found in fish oils, but from a sustainable land-based source.