Post-Merger, Makhteshim Agan Sets Sights on China Expansion
12 March 2012 TEL AVIV, Israel – Off-patent crop protection maker Makhteshim Agan posted higher fourth-quarter and full-year sales helped most notably by North America and the Asia Pacific region, while the company sets its sights on expansion following the merger with its now-majority stakeholder, ChemChina.
“Following the conclusion of our merger with ChemChina in October, we have initiated intensive activities to exploit its potential, including the possibility of creating a significant operational and commercial infrastructure in China based on ChemChina’s agrochemical assets,” President and CEO Erez Vigodman said in a statement. The company plans to ramp up its presence in China and the entire Asia Pacific region, selling ChemChina products through its global sales and distribution channels, he said.
MAI’s sales for the fourth quarter rose 9% $549.3 million. For 2011, sales jumped 14% to $2.69 billion, which Vigodman attributed to “double-digit gains across all of our operating regions, especially the APAC region and North America,” as favorable weather drove volume growth, planted area expanded and commodity prices rose. At the same time, prices remained relatively stable and the company benefited from strengthening of some currencies, he said.
North America’s high selling prices and booming volumes accounted for MAI’s strongest regional sales jump for the fourth quarter at 25.1%, while European sales fell 2.2%. For the year, Asia Pacific grew at the fastest clip, 24.4%, on higher volumes in India, Korea and Australia, partially offset by currency effects and lower selling prices. Europe posted the smallest rise at 8.7%.
On a net basis, MAI recorded a $120.7 million profit for the year, and $841.5 million on a gross basis, reflecting improved and enlarged operations in key markets like Brazil and the APAC region, as well as its integration of previous acquisitions in Mexico and Korea. It recorded a net loss of $26.7 million for the quarter, less one-time charges.
“In addition to our ongoing development and registration activities, we entered into a collaboration with Monsanto in the area of weed resistance, we acquired the rights and licenses of the active ingredient diuron and launched fipronil-based products in the US. Our newly established agricultural technologies division will also support this strategic direction by scouting and developing our offering beyond crop protection,” Vigodman noted.
In October 2011, MAI completed its merger transaction with ChemChina and became a private company, 60% held by ChemChina and 40% by Koor Corporations. MAI says it has begun to take “intensive action to exploit the potential derived from the merger.”
In 2011, the company honed in on the Asia-Pacific, Africa and Middle East regions by opening a formulation and packing plant in Dahej, India, that will serve its operations in India and the region.
It also formed a new agricultural technologies division, which will be incorporated into the company’s core businesses. Initially, the division will focus on developing and promoting operations in the seed and biotechnological sector, and eventually will examine “other supplementary agriculture areas,” MAI said.
Source: Makhteshim Agan; Edited by Managing Editor Jaclyn Sindrich
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