By Lynda Kiernan
Israeli crop protection company ADAMA has agreed to acquire AgroKlinge, a Peruvian company providing mainly large-scale industrial farmers a broad portfolio of crop protection, biopesticide, and nutrition products.
In business for 80 years, AgroKlinge has built up strong brand recognition in the country’s $240 million crop protection market. And considering that despite the fact that Peru’s crop protection market is one of the most advanced in the region, there are few multinationals at play, positioning AgroKlinge, and now ADAMA, with the opportunity to dominate the market.
Through this deal, ADAMA will now be one of the top crop protection companies in Peru – a country that has seen significant growth in its agriculture sector over the past two decades, averaging 3.3 percent per year between 2000 and 2015 to contribute 7.3 percent to the country’s GDP. However, if also including upstream and downstream activities, agriculture actually contributes at least 11.3 percent to Peru’s national GDP, according to the report, Gaining Momentum in Peruvian Agriculture: Opportunities to Increase Productivity and Enhance Competitiveness, released by the World Bank last year.
“We welcome AgroKlinge to ADAMA and are excited to have its experienced and highly skilled team be a part of our company,” said Edgardo Iglesias, general manager, Andean markets, ADAMA.
“AgroKlinge’s excellent positioning within the Peruvian market, with a wide product portfolio, strong brand and relationships with leading growers, will significantly bolster our long-term growth in the region.”
Peru is the top global exporter of asparagus, outranking China and Mexico, shipping an average of 100,000 tons per year valued at US$500 million. It is also the top exporter of paprika, shipping 50,000 tons per year valued at US$200 million, and the top exporter of organic bananas at 170 million tons as of 2014. It is also ranked second in the world for exporting quinoa and artichokes, third for mangoes, fifth for avocados and citrus, and seventh for grapes.
The biologicals market includes biopesticides, biofertilizers, and biostimulants, which due to increased regulation and a growing focus on sustainable practices are commanding an increasing share of the market. According to a report by ResearchandMarkets.com, the agricultural biologicals market is estimated to have had a value of USD $6.75 billion in 2017, and is projected to reach USD 12.86 billion by 2022, which translates to a compound annual growth rate of nearly 14 percent.
“AgroKlinge is well known in Peru for its focus on differentiated products and solutions that provide added-value for farmers in various crops, which is fully aligned with ADAMA’s global strategy of portfolio differentiation,” said Iglesias.
For ADAMA, which was taken into full ownership by ChemChina and merged with its subsidiary Sanonda through deals valuing it at $3.5 billion in 2016, this deal gives its a stronger presence not just a new market, but another continent.
In March of this year ADAMA partnered with Israeli aerospace company Tactical Robotics to trial UAVs for aerial spraying. One month later, in April, ADAMA executed a partnership with high-resolution precision agriculture aerial imagery provider Taranis, and Landmark, for the goal of adding value for Australian agtech customers.
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.
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