ADAMA Sales to Be Hit by Delayed Planting, Tight Crop Protection Supply

ADAMA expects first-half sales to decline, as continued tight supply and delays in planting due to weather conditions reduced crop protection applications in many places around the world.

The ChemChina-owned company expects to deliver more than $2 billion in sales in the first half of 2019, in line with last year in constant currency terms, and somewhat below last year in US dollar terms, hurt by significant snow, followed by unprecedented flooding in North America, alongside extreme dry weather in Europe and Asia-Pacific.

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“Continued strong contribution from Latin America, India and Middle East, as well as new joiners Bonide and Anpon, together with further significant price increases across all regions, partially offset these weather- and supply-related delays and allowed the company to maintain a stable gross margin,” a company statement says. In China, ADAMA continues to see strong demand for its differentiated, formulated and branded products, as it continues to prioritize these sales through its own channels by shifting away from sales of unformulated, technical active ingredients to intermediaries.

Following resumption of operations at its Jingzhou old site in late March, ADAMA is advancing the gradual ramp-up of production. The new state-of-the-art wastewater treatment facility is operational, and the upgraded biological-decomposition systems are being acclimated to the improved wastewater quality. As this progressed, the company was nevertheless still impacted by constrained supply in certain key products manufactured at the site, and recorded approximately $21 million of related idleness cost during the half-year.

Looking toward the second half of the year, the company expects its performance to strengthen as the southern hemisphere regions, which are performing strongly, move into their peak season, and as output increases from the Jingzhou old site.