Nufarm Loses Roundup Contract to Sinochem in Australia, New Zealand

Nufarm

Off-patent crop protection company Nufarm Limited said this week it received notice from Monsanto that will end its exclusive distribution of Roundup in Australia and New Zealand.

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Monsanto opted to sign Chinese state-owned Sinochem as the distributor in the two countries.

As of this Aug. 28, Nufarm – which sold about half of Australia’s Roundup – will no longer sell the world’s biggest branded glyphosate product. Nufarm’s sales of Roundup in 2012 totaled about $102 million in Australia and New Zealand. About 60% of the company’s glyphosate sales are marketed under the Roundup brand.

Nufarm’s Managing Director, Doug Rathbone, said Nufarm “remains committed to the glyphosate segment and will continue to invest in the development of innovative glyphosate formulations under Nufarm’s brands.”

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“The glyphosate segment has changed significantly over the past few years, becoming increasingly competitive and generating substantially less value for suppliers of that chemistry into the Australian market,” Rathbone said. “The brand premium attached to Roundup has consequently been eroded, and we will now focus our ongoing investment in glyphosate on Nufarm’s own brands where we can build long-term value on a more secure basis and ensure our cost competitiveness.”

As its cost position will improve once it is no longer required to pay Monsanto, Nufarm says it “expects to maintain a strong presence in the glyphosate segment,” and it does not see a material impact on earnings.

Nufarm Australia entered into an agreement with Monsanto in 2002 for exclusive use of Monsanto’s Roundup glyphosate and has launched several glyphosate products under that brand, including Roundup Power Max and, more recently, Roundup Attack.

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