Monday, October 9, 2017

"Agrichemicals sector consolidation..."

From Agrimoney:

The wave of consolidation among major agrichemicals groups will be a boon to smaller rivals, Plant Impact said, even as it unveiled results marked by a hiccup in tie-up with sector giant Bayer.
The merger spree which is seeing Bayer bid for Monsanto, ChemChina for Syngenta, and Dow and DuPont form a merged ag business, "will benefit small companies" in the sector, said John Brubaker, the Plant Impact chief executive.
The lesson from the pharmaceuticals sector, after its own consolidation, under which the number of sector majors shrank from 60 to 10 in the 20 years to 2015, was that the large drug development companies expanded their quest outside for technologies to underpin their leadership.
In agrichemicals too, "these companies as they go through consolidation will become more open to partnership… and seeking product from smaller companies".
Whether this quest for fresh intellectual property leads to fresh acquisitions of more minor groups was too early to say, Mr Brubaker said.
"It may be that smaller companies themselves pair up," although this was in the realm of "crystal ball gazing", he told
'Significant inventory'
Plant Impact highlighted the role of "depressed" crop prices in spurring the deals between the top players, with the weak values creating "significant pressure on growers' profitability", feeding through into the supply chain too.
"Cost-cutting behaviour by farmers has reduced input consumption, creating significant channel inventory in many markets, notably Brazil and the US," said David Jones, the Plant Impact chairman....MORE