Sinochem gets the nod over Nufarm
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 close at $5.16 on Wednesday as investors picked a buying opportunity.
Sinochem Australia, a fully-owned subsidiary of Chinese-based global chemical firm Sinochem International - which mounted an unsuccessful bid for Nufarm in 2009 - announced it had been given the rights by Monsanto, effective from September.
Sinochem Australia managing director Roger Angell, commercial manager Richard Jagger and operations manager Michael Summons have all worked for Monsanto. Mr Angell said Sinochem and Monsanto would commit "significant resources to the marketing and development of Roundup brands in Australia and New Zealand".
Nufarm spokesman Robert Reis said the Sinochem deal was "news to us" but stressed "we're not losing a product, we're losing a brand. We will still have the ability to continue marketing glyphosate - the chemistry - with our own brands".
RBS Morgans agribusiness analyst Belinda Moore said the loss of the Roundup distribution rights was unexpected and "terrible timing" given the company in January lost its rights to sell crop protection products made by BASF.
But she said Tuesday's sharp selloff was an overreaction and Nufarm could claw back a significant portion of the lost sales.
Frequently Asked Questions about this Article…
According to the article, Nufarm lost the exclusive Australian distribution rights to Monsanto's Roundup brand. The rights were awarded to Sinochem Australia and take effect from September.
Sinochem Australia, a fully owned subsidiary of Sinochem International, was given the rights. Three local managers with former Monsanto experience — Roger Angell, Richard Jagger and Michael Summons — are involved in Sinochem's Australian operations.
Nufarm shares initially fell about 12% on the Tuesday the announcement was made. They then recovered more than 6% to close at $5.16 on Wednesday as some investors saw a buying opportunity.
No. Nufarm's spokesman Robert Reis said the company is 'not losing a product, we're losing a brand.' Nufarm will still be able to market glyphosate chemistry under its own brands.
Sinochem Australia said it and Monsanto would commit 'significant resources to the marketing and development of Roundup brands in Australia and New Zealand,' indicating a planned focus on promoting the Roundup brand in those markets.
RBS Morgans agribusiness analyst Belinda Moore described the loss as 'unexpected' and 'terrible timing,' noting Nufarm had earlier lost rights to sell BASF crop protection products in January. However, she also said the market's sharp sell-off appeared to be an overreaction and that Nufarm could claw back a significant portion of the lost sales.
Yes. The article notes that Sinochem International previously mounted an unsuccessful bid for Nufarm in 2009, giving some historical context to the companies' relationship.
From the article's reporting, investors saw short-term volatility—an initial sharp sell-off followed by a partial recovery—after Nufarm lost the Roundup brand. Key takeaways for investors include: Nufarm retains the ability to sell glyphosate under its own brands, analysts view the market reaction as potentially overdone, and Sinochem plans to invest in marketing Roundup in Australia and New Zealand.
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