October 7, 2020

By Lynda Kiernan, Global AgInvesting Media

In a major boost to its sustainability initiatives and goals, Syngenta Group announced it has agreed to acquire leading global biologicals company Valagro for an undisclosed sum. 

From its beginnings 40 years ago in a remote area of Italy, Valagro has grown to become a global multinational company with a leading R&D program and 13 subsidiaries employing 700 worldwide.

The company’s innovative and effective biostimulants and speciality nutrients solutions form a portfolio backed by best-in-class biological R&D, production, and commercialization capabilities.

Valagro’s assets include eight production facilities in Italy, Brazil, India, Norway, and its newest plant being built in South Carolina, in the U.S. 

Over the 10-year period from 2009-2019 the company saw a CAGR of approximately 10 percent to post revenue in 2019 in the neighborhood of $175 million – and growth such as this is only expected to continue.

“Consumer concerns over food provenance and safety – where food comes from and how its produced (i.e. organic, non-GMO, sustainable production methods, etc.) – has emerged as a major trend in developed markets,” noted Philippe de Lapérouse and Mark Zavodnyik of HighQuest Consulting, who included Crop Services and Inputs as a sector to watch in 2019.

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 just-released 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.

Projecting even further out, Markets and Markets Research estimates that the global biologicals market will continue to see a CAGR of 13.6 percent to climb from a value of $8.8 billion in 2019 to $18.9 billion in five years. 

This acquisition positions Syngenta Crop Protection as a world leader in this category through the complementary combination of Valagro’s well-established portfolio with Syngenta’s Crop Protection’s current range of biostimulants and biocontrols, along with the biological products that remain in its pipeline.

Not only will it strengthen Syngenta Group’s position in a high-potential market, but the deal aligns with Syngenta’s Good Growth Plan – a $2 billion commitment to help farmers combat climate change and to improve sustainability in agricultural production through the acceleration of innovation and striving for carbon neutral production. 

“Climate change is an existential threat, and we need to act before it is too late,” stated the company on its website. “The effects are a huge challenge for farmers and farm workers trying to ensure the world’s supply of food. The Covid-19 pandemic has further highlighted the fragility of the agriculture ecosystem, putting even more strain on those earning a living from farming than before.”

“Our Good Growth Plan aims to take on these challenges by making agriculture more resilient and sustainable and driving a better, greener, recovery.”

“Significant levels of investment in innovations such as Biologicals are necessary in order to deliver a sustainable future and help farmers deliver a food system working in harmony with nature,” noted Jon Parr, president, global crop protection, Syngenta.

“Syngenta Crop Protection and Valagro have a foundation in science-based innovation and are eager to collaborate, share knowledge and build on each other’s capabilities. By fostering the entrepreneurial spirit and culture of Valagro, powered by our global scale and capability, together we will shape the future of the agricultural Biologicals market.”

Moving forward, Valagro will operate as an independent brand within the market from Syngenta Crop Protection, but the tie-in with Syngenta brings vast potential for global growth to the company.

“For 40 years our mission at Valagro has been to harness nature in order to help farmers achieve higher yields and grow better quality crops,” said Giuseppe Natale, CEO, Valagro

“This agreement will open up new, previously unimaginable growth prospects for the Valagro group worldwide. Now that we are part of a company with the resources and ambition of Syngenta Crop Protection, we have exciting new opportunities for our innovation to better deliver even more options for farmers and to invest even more effectively in the sustainable future of agriculture.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.