Sumitomo Launches Distribution Holding Company in Chile
Sumitomo Corp. said it started operations of Summit Agro South America SpA, a holding company supervising crop protection product distribution companies in the Andes region of South America, and expects to make it a prime source of earnings by strengthening the foundations and structure of its crop protection business.
The aim of launching SASA, which will be headed by Hideo Ozaki, is to place all operations in the aforesaid five countries under SASA’s purview by newly founding SASA’s subsidiary company and branches in Colombia, Ecuador and Peru at the same time. Under this concept, each Summit Agro company will pursue opportunities of new developments and new commercial rights by accelerating collaborations and alignments one another in the field of sales, marketing and development heretofore pursued independently by country.
“SASA will play a role of bringing greater efficiency and sophistication to those alignments and business operations in line with medium- and long-term strategies and encouraging each Summit Agro to share and take advantage of their knowledge and know-how on market characteristics, industrial regulations and legislations,” Sumitomo said.
South America accounts for more than 20% of the world’s market for crop protection products, and the market in the Andes region has seen particularly notable growth, Sumitomo said. Sales in this region came to $2.1 billion in 2014 (5% of crop protection products sales worldwide) and, given the region’s high agricultural production potential stemming from the temperate climate along the Andes and crop diversity, this market should see annual growth rates of 3% to 4% over the long term. “This market is deemed particularly suitable for Japanese crop protection manufacturers, who offer numerous products that are highly effective for a wide range of crops.”
Sumitomo’s crop protection business got started in earnest in the 1970s with the export of crop protection products produced by Japanese manufacturers. After adopting a strategy of intensifying its efforts downstream in the value chain, Sumitomo extended its distribution business to more than 30 countries in the Americas, Europe and elsewhere, and its sales are now on the order of 100 billion yen annually.