Nufarm Warns of Lower Results; BASF to End Distribution Deal
23 January 2013 
Nufarm warned its full-year results will be lower than expected due to hot, dry weather in Australia, where it is the largest supplier of crop protection products.
BASF will also end its distribution deal with the company as of March 2014.
The Melbourne, Australia-based crop protection company relies on conditions that trigger weed, pest and disease pressure in the summer cropping regions of Northern New South Wales and Queensland – the regions hit by unusually hot, dry conditions in the key August to January period.
“[Weather] has impacted a number of market segments, including relatively high-value segments such as cotton, horticulture and other summer crops,” the company said. It cautioned that its Australia/New Zealand business is expected to be “well down” in the first half of the year and the full year compared with 2012.
However, its business outside of Australia has performed more strongly than expected, particularly in South America and Europe. It reiterated its previous outlook for earnings before interest and tax in the first half of the year to be at least 15% higher than the corresponding period of 2012.
BASF Distribution Deal Ending
BASF said it will directly distribute its crop protection products to the Australian market, effective March 1, 2014. The BASF product portfolio has been distributed in Australia by Nufarm and Crop Care since 2004.
“Our distribution relationship with Nufarm and Crop Care has been successful for ten years. But to invest further in our portfolio of innovations for sustainable agriculture in Australia, we have taken the strategic decision to re-enter the market in our own right”, said Raman Ramachandran, Senior Vice President, BASF Crop Protection Asia Pacific. “We are excited about this opportunity and look forward to building a strong presence in the Australian market with an expanded product offering.”
When the deal ends, Nufarm will supply the “active ingredients that cover a majority of the uses currently targeted by BASF products,” it said, adding, “Nufarm will be a strong competitor across those chemistries and will use its significant product development, manufacturing and logistics presence in Australia to continue to service distribution customers with a wide range of existing and new products.”
The BASF products distributed by Nufarm account for less than 10% of its total revenue in Australia and less than 3% of global revenue, according to Nufarm.
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