Nufarm loses its exclusive distribution right for Roundup branded glyphosate in Australia and New Zealand

On 5 March, 2013, Nufarm Limited (Nufarm) released an announcement, claiming that its exclusive distribution right for Roundup branded glyphosate in Australia and New Zealand are to be terminated on 28 Aug., 2013. Nufarm may continue selling Roundup branded product until 28 Aug., 2013, but afterwards, Sinochem Group, a Chinese company, will take over the exclusive distribution right of Roundup branded glyphosate in Australia and New Zealand, according to CCM’s monthly report, Glyphsoate China Monthly Report, which was issued on 20^th, March.

 

According to the announcement, Nufarm made an agreement with Monsanto in 2002 for the exclusive use of Monsanto's Roundup brand and launched a number of innovative glyphosate products under that brand, including Roundup Power Max and Roundup Attack. The agreement also required Nufarm to pay Monsanto a distribution fee for glyphosate sales into the Australian and New Zealand markets.

Although the revenue from the Glyphosate business has seen a downtrend since the fiscal year 2008, it’s still one of Nufarm’s most important global businesses. Nufarm claimed that it currently has an approximate 50% market share of glyphosate sales in Australia, with 60% of these sales involving products marketed under the Roundup brand.; besides, Nufarm’s Roundup branded glyphosate sales in Australia and New Zealand in the financial year 2012 were approximately USD104.06 million, accounting for about 22% of the total revenue from Nufarm’s global glyphosate business.

Given the important status of glyphosate in Australia and New Zealand, the glyphosate market share competition between Nufarm and Sinochem Group will remain intense.

 

Nufarm, Australia’s top farm chemical supplier and also a strong player in the glyphosate industry, will try to remain a dominant player through its own branded glyphosate. Nufarm claimed that it will continue to commit to the glyphosate segment and invest in innovative glyphosate formulations under its brands.

 

As for Sinochem Group, there are two important advantages when it will enter the glyphosate market in Australia and New Zealand. Firstly, Sinochem Group has a more-than-ten-year transnational experience in the operation and management of glyphosate business. It also has the exclusive distribution right for Roundup branded glyphosate in Southeast Asia at present. Secondly, Sinochem Group has steady glyphosate sources. At present, Sinochem Group's glyphosate sources include a 70,000t/a capacity of glyphosate technical in Nantong Jiangshan Agrochemical & Chemicals Company and a 30,000t/a capacity of glyphosate technical in Youth Chemical.

Nufarm losing the exclusive distribution right of Roundup branded glyphosate in Australia and New Zealand after Aug. 28, 2013 is quite surprising. Nufarm’s glyphosate revenue in Australia and New Zealand is estimated to decrease in the short term, but Nufarm will still be Sinochem Group's strongest competitor in the glyphosate business of this area. It’s estimated that Sinochem Group will achieve a great operating performance in the glyphosate business there, thanks to its advantage after taking over the exclusive distribution right of Roundup branded glyphosate.

Table Contents of Glyphsoate China Monthly Report 1303:

Anhui Huaxing’s operating profit surges in 2012

Nantong Jiangshan's equity proportion of Dongchang Chemical decreases again

Nufarm loses its exclusive distribution right for Roundup branded glyphosate in Australia and New Zealand

Global's GM crop planting area records 170.3 million hectares in 2012

China cancels PMIDA's export tax rebate

The intense competition in China's mainstream glyphosate export producers continues in 2012

Glyphosate industry research dynamics subsequent to the promulgation of No. 1558 Decree

Lier Chemical successfully registers glyphosate triclopyr in Feb. 2013

Glyphosate prices rise slightly in March 2013

Export volume of glyphosate formulations increase by 30.72% in Jan. 2013

Glyphosate China Monthly Report, a monthly publication issued by CCM on 20^th, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

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