Sumitomo Company reached an agreement with the shareholders of NATIVA AGRONEGÓCIOS & REPRESENTAÇÕES LTDA. and NATIVA AGRICOLA E REPRESENTAÇÃO LTDA. (collectively, “Native“), a distributor of agricultural supplies in the southeast of Brazil, to acquire all the shares of Nativa to make it a 100% subsidiary. The acquisition goes through Agro Amazonia Products Agropecuários SAa wholly owned subsidiary of Sumitomo Corporation and is expected to be completed by the end of fiscal 2022 once the necessary approvals from the relevant authorities have been obtained.
With population growth and rising income levels, particularly in developing countries, global food demand is expected to increase about 1.7 times from 2010 levels by 2050. Amidst demand increase in food production, an expansion of agricultural land is vital to increase unit output, as is the demand for agricultural equipment. Brazil has the fifth highest export value of agricultural products in the world, with soybeans, corn, sugar cane, coffee, oranges and beef. Additionally, Brazil is likely to become even more important as a food producing area, as it allows room for the expansion of agricultural land without deforestation.
Established in 2000, Nativa is an agricultural supply distributor with eight locations and a fertilizer manufacturing facility in the state of Minas Gerais, located in southeastern Brazil. In addition to soybeans and corn, the state of Minas Gerais is a region where the cultivation and production of coffee seeds, fruit trees and vegetables are flourishing, especially among small and medium farmers. Nativa has built a strong customer base rooted in the community through the development, manufacture and sale of unique products that meet customer needs, and through the support of agriculture by agronomists (sales personnel who know the agricultural production technologies).
Agro Amazonia has been in business since 1983 and is one of the largest agricultural supply distributors in the Brazilian Midwest, operating 50 outlets in eight Brazilian states, primarily in the Mato Grosso region. Sumitomo Corporation acquired full ownership of the company in 2018 and has since helped expand Agro Amazonia’s business by leveraging its expertise in finance, procurement and business management.
Agro Amazonia contributes to the sustainable development of agriculture through the expansion of its portfolio of products and services. It has expanded its customer base to about 20,000 households, mostly consisting of cattle ranchers and large soybean and corn producers with 1,000 to 10,000 hectares or more. The company is becoming an industry leader in Brazil, with sales increasing more than fivefold since 2015.
With this acquisition, Sumitomo Corporation aims to expand the operation’s sales territory in Brazil and continue its business growth by combining Agro Amazonia’s extensive product portfolio based on its strong relationships with agrochemical suppliers with the development capabilities and Nativa’s fertilizer manufacturing business and new customer segments.
From an overall strategy perspective, Sumitomo Corporation has positioned agriculture as one of its next-generation growth areas and “agricultural inputs and services” as a stable business growth category. In the field of agrochemicals, Sumitomo Corporation started its agrochemical export business in the 1970s, and currently operates an import and wholesale business in 37 countries overseas. In Europe, the company expanded its value chain by acquiring distributors of agricultural supplies. In the field of fertilizers, since starting the import/export business of fertilizer raw materials in the 1950s, Sumitomo has built an integrated business base by importing fertilizer raw materials to manufacturers and directly selling to farmers, mainly in Japan and the Asia-Oceania region.
As part of its commitment to contribute to society, Sumitomo will continue to support stable and sustainable food production and the development of local communities and industries around the world. The company aims to provide products and services that meet the agricultural needs of each country and region, while using its expertise in the field of agricultural materials for the expansion of its business.