CROP protection business Nufarm is looking to put the disappointment of the failed Sinochem bid for the business behind it, with company officials believing the newly-penned deal with Japanese agribusiness giant Sumitomo will provide a strong basis for growth.
Overall, the Nufarm business has been hit by a tough couple of years in the crop protection business, in particular glyphosate, with prices at record lows.
However, this has not been the only hurdle Nufarm has had to endure.
Similar to fellow Aussie agribusiness, Nufarm has also had trouble expanding into the South American market.
"We’ve got a big business in Brazil that has been impacted by credit issues over there, which has hurt the bottom line," said Nufarm general manager of corporate strategy and external affairs, Robert Reis.
Along with that, Nufarm has had to contend with the Brazilian authorities halting the sale of several Nufarm pesticides due to concerns over toxicity risks.
However, Mr Reis said that in the big picture, Nufarm was looking strong.
“The rest of the business has been tracking very well, and we’ve got several growth opportunities, both on a geographic basis and within our product portfolio.”
He said Sumitomo had a strong research arm, and Nufarm was hoping that it could make use of the collaborative efforts to expand into growth areas within crop protection.
“Sumitomo have some very complementary chemistry for us, and we will look to distribute these products throughout the world.”
“We’ve already discussed with them the potential for new products to be distributed around the world.
“Nufarm is having a look at what’s in the pipeline, we can look at gaps in the market and farmer needs and work with them to fill those gaps.
Geographically, Nufarm is looking into a range of developed and developing markets.
While the Brazilian experience has meant Nufarm will tread carefully when dealing in developing countries, Mr Reis said the company was confident there were great opportunities in eastern Europe.
“There’s no doubt input companies like Nufarm have opportunities there and we will look to expand our presence through that region, but we are conscious of being cautious.”
However, he said there were still chances in lower-growth developed markets.
“Even in markets in western Europe and north America we see the room to grow, while are also under represented in Asia, and we hope the Sumitomo alliance will provide Asian opportunities.”
He predicted a more normal season on chemical inputs, saying the company expected prices to rise.
“We’ve seen some price increases on chemical inputs and we are reflecting that in pricing increases there, while we think that some of the challenges around glyphosate will normalise.”
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