Three former Monsanto executives who are local managers for Chinese-backed Sinochem have emerged with the Australian distribution rights for the herbicide Roundup, a day after Nufarm lost them.
Nufarm shares fell 12 per cent on Tuesday after the company announced it had lost the exclusive rights to sell Roundup, made by Monsanto, which it had held since 2002. But Nufarm shares recovered more than 6 per cent to $5.15 on Wednesday as investors picked a buying opportunity.
Sinochem Australia, a fully-owned subsidiary of Chinese-based global chemical firm Sinochem International, announced Monsanto had given it the rights, effective from September.
Sinochem Australia’s managing director, Roger Angell, is a former head of Australia and New Zealand for Monsanto. Commercial manager Richard Jagger has had a 25-year career in Australia with Monsanto and Roundup brands. Operations manager and New Zealand country leader Michael Summons is a former New Zealand country manager for Monsanto.
Mr Angell said Sinochem Australia’s focus was on the company’s relationship with distribution businesses in Australia and New Zealand.
“Our role is to work with these important customers, understand their business issues, and work to add value to how they service their farmer customers,” Mr Angell said.
“Our initial focus is marketing the quality and effectiveness of Roundup products. Sinochem Australia and Monsanto will commit significant resources to the marketing and development of Roundup brands in Australia and New Zealand.”
“The company will over time introduce a comprehensive range of crop protection products to the Australian and New Zealand market to complement the Roundup product range.
“As our business grows in Australia we will be looking to formulate and produce some of our product at Australian plants,” he said.
RBS Morgans agribusiness analyst Belinda Moore said the loss of the Roundup distribution rights was unexpected for Nufarm and “terrible timing” given the company lost its rights to sell crop protection products made by German conglomerate BASF in January.
But Ms Moore said Tuesday’s sharp sell-off was an over-reaction to the Roundup loss and created a buying opportunity.
“We believe that Nufarm can claw back a significant portion of these sales,” she told clients. “One of Nufarm’s strengths is its diversity by both geography and product. Based on our forecasts, Nufarm is trading …at a discount to peers. Nufarm is also a potential target, with Sumitomo Chemical owning 23 per cent of the company.”
The original release of this article first appeared on the website of Hangzhou Night Net.