By Dow Jones Business News, March 05, 2013, 11:34:00 PM EDT
By Caroline Henshaw and Ross Kelly
CANBERRA--Monsanto Co. ( MON ) Wednesday awarded a potentially lucrative contract to distribute its crop protection
products in Australia and New Zealand to China'sSinochem, a day after terminating a decade-long deal with Nufarm Ltd.
The move builds on existing ties with Sinochem that involve the Chinese state-owned chemicals giant selling Monsanto's
Roundup brand in China and the Philippines. It also marks the biggest push by Sinochem into the Australian market since
it abandoned a 2.62 billion Australian dollar (US$2.70 billion) takeover bid for Nufarm in 2009.
Global agriculture companies are vying for a greater share of Australia's farm sector, which is located on the
doorstep of fast-growing Asian economies like China that have a growing appetite for Western-style diets.
Sinochem will become sole distributor of Roundup in Australia and New Zealand in September, but can start selling it
on a non-exclusive basis three months earlier.
"Sinochem has been an excellent global partner and we believe they will do an outstanding job serving our customers in
Australia and New Zealand through this new agreement," Mike Frank, head of Monsanto's international row crops and global
vegetable business, said in a statement.
Sinochem's Australian unit, based in Melbourne, is run by several former Monsanto executives. Managing Director Roger
Angell is Monsanto's former head of Australia and New Zealand.
Mr. Angell said the deal gives Sinochem the opportunity to introduce its own products to the region, in addition to
"As our business grows in Australia we will be looking to formulate and produce some of our product at Australian
plants," Mr. Angell said.
U.S.-based Monsanto's deal with Nufarm, to be terminated officially Aug. 28, was worth A$100 million in sales last
year. It was the second major contract loss for Nufarm in as many months after German chemical company BASF SE (BAS.XE)
said in January it plans to re-enter the Australian farm market as a solo player next year.
The termination of the Monsanto contract sent Nufarm shares plummeting 12.1% Tuesday. By 0345 Wednesday, Nufarm shares
pulled back some of the losses, rising 6.6% as brokers said the fall was overdone and RBS Morgans said Nufarm is a
potential takeover target.
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