Syngenta Buys Brazilian Agricultural Inputs Retailer Produtécnica

Syngenta Buys Brazilian Agricultural Inputs Retailer Produtécnica
02.04.2024 352

With the acquisition, Syngenta will strengthen its position in the input retail sector in Brazil. The transaction notification was filed with CADE on March 27.

Syngenta Proteção de Cultivos has just reached an agreement to acquire agricultural inputs distributor Produtécnica, a chain of six stores spread across Tocantins, Maranhão and Piauí states. With the deal, the fourth of its kind in the last three years, the company now has its own retail units in all regions of the country for the first time, cementing the strategy it set in motion five years ago.

In 2019, Syngenta took the first step towards acting directly in the resale of inputs by creating Atua Agro, which concentrates its operations in the South region of the country. The chain has grown since then – today, it has 44 stores – but with experience, the company realized that organic growth would not be enough for it to gain a foothold in distribution at the speed it would like.

With that, Syngenta went shopping. The first acquisition, which took place in 2021, was that of Dipagro, from Mato Grosso. The following year, the company incorporated Agro Jangada, from Mato Grosso do Sul, and, in 2023, Agrocerrado, from Minas Gerais.

In addition to Produtécnica’s six units, Syngenta will have around 90 stores of its own, as well as more than 200 partner distributors and cooperatives. The company did not inform the deal’s value, which depends on the approval of the antitrust regulator CADE. Syngenta informed CADE of the agreement on Wednesday evening.

The Produtécnica stores are located in the municipalities of Balsas and Açailândia (Maranhão), Bom Jesus (Piauí), Araguaína, Gurupi and Palmas (Tocantins). They will be part of Synap, Syngenta’s distribution platform.

The acquisition is expected to strengthen the brand’s relationship with farmers in the Mapito region, as the confluence between the states of Maranhão, Piauí and Tocantins is known. According to André Savino, head of Syngenta’s crop protection unit in Brazil, the goal is to ensure that the company’s products reach small, medium and large farmers. 

“We are an innovative company and we are at the forefront of developing cutting-edge technologies,” 

he told Valor.

The consecutive acquisitions haven’t completely quenched Syngenta’s appetite. Although no new negotiations are underway at the moment, Juan Pablo Llobet, head of the Crop Protection division in Latin America, said that the company will continue to be “attentive to opportunities that make sense from a business point of view”.

As part of the consolidation of the input distribution market, Syngenta is threading a path that follows its own logic. “We were looking for technical capacity and proximity to the farmer to position our innovation in the market,” said Mr. Llobet, adding that the company invests 10% of its annual revenue in developing new products. From January to September 2023, Syngenta’s global turnover was $24.3 billion. The group has yet to publish its fourth-quarter figures.

On another front to strengthen its brand, Syngenta continues to finance rural producers when they buy inputs in its stores and those of its partners. The fintech Syde, created by Syngenta in 2022, is gaining scale “very well”, said Mr. Savino. “We know that it’s not enough to develop innovation, we need to get it to the field,” he said.

Source: Valor International

agricultural markets  Brazil 

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