Tel Aviv, Israel and Beijing, China
October 1, 2014

• China Market Access – Establishing a Robust Foundation for a Leading Commercial Platform in the Chinese Market: Adama intends to use its global registration, marketing and distribution know-how and expertise to gradually build-up the development, registration and distribution capabilities of the Chinese businesses it is acquiring into a leading Chinese domestic commercial platform.
• Enhance Global Product Offering
• As a result of the acquisition, Adama’s ability to develop and launch advanced off-patent products will be enhanced via a new global R&D hub currently being established, with nearby modern synthesis facilities and a global formulation center, all of which will operate under Adama's strict quality assurance. 
• The acquisition is expected to provide Adama with unique access to, and a competitive, backward-integrated cost position in, certain key agrochemical molecules that the company currently purchases from third parties. This will assist Adama, after obtaining the required registrations over the next few years, to increase both the sales and profitability of those products on a global basis. Adama also intends to use its global distribution channels to expand sales of various products that the Chinese businesses currently export through third parties.
• Operational Optimization: Given the industry and Adama's growing proportion of products that are either produced or procured in China, creating a global production, formulation, packaging and logistics center in China is expected to provide the most appropriate location for optimizing operations and shortening supply lines, thereby increasing flexibility and reducing inventory and working capital, shipping, and other logistics costs. 

Sanonda Framework Agreement
  
Within the context of the transaction, Adama and Sanonda will enter into a framework agreement to commence a comprehensive, strategic collaboration.  This will include the two companies viewing each other as leading partners for Adama distributing Sanonda products worldwide, and working together to enhance their offering in the China domestic market. The agreement also establishes the foundation for the two companies sharing know-how and promoting product innovation.   
  
Adama Breaks Ground on Global Formulation Center in Jiangsu
  
Adama has broken ground on a new formulation center in Huai’an City, Jiangsu Province to support the build-up of its commercial and operating infrastructure in China, as well as globally. The new center will serve as a manufacturing facility for advanced and unique formulations and mixtures. The center will increase the company’s global formulation capacity and is planned to commence operations as early as 2016, benefitting from the company's adjacent Huai'an Hub that will be providing central services and skilled employees.
  
China Crop Protection Market Fragmented, Vital to Food Security 
  
China has 20% of the world’s population, but only 7% of the world’s arable land and 6.6% of global freshwater resources, placing a tremendous strain on its agricultural resources, and increasing demand for the yield-enhancing benefits that crop protection products provide to farmers. The Chinese government has made food security to feed its growing population a major focus of its 12th and most recent five-year plan, and crop protection is considered to be a vital part of achieving its goals. 
  
The crop protection market in China is highly fragmented with relatively limited penetration by the leading global providers, resulting in even the market leaders having relatively low market share compared to other markets worldwide.
   
China Critical Provider of Crop Protection Products, Yet to Be Integrated with Global Market
   
Over recent decades, China has become the leading product launch and manufacturing location for the global crop protection industry, from sourcing of raw materials and chemical intermediates to synthesizing active ingredients and formulation of finished products. According to CCM Ltd., China is now the world’s largest agrochemical producer, manufacturing more than 350 different active ingredients. 
  
According to the National Bureau of Statistics of China, China produced a total of 3.2 million tons of pesticides in 2013. Of this, approximately 50% is exported, making China the world’s largest exporter of crop protection products. Jiangsu in particular – the province in which the Huai'an Hub is located – has emerged as the leading manufacturing area in China for the global agrochemical industry, and is home to 31 of the top 100 Chinese agrochemical manufacturers.

About ADAMA Agricultural Solutions

ADAMA Agricultural Solutions Ltd., is the leading off-patent crop protection solutions company in the world. The Company’s comprehensive range of high-quality, differentiated and effective herbicides, insecticides and fungicides, help farmers worldwide to increase yields by preventing or controlling weeds, insects and disease that harm their crops. With one of the world’s most extensive and diversified off-patent product portfolios, ADAMA sells its products in more than 120 countries, with revenues of over $3 billion in 2013. ADAMA’s purpose is “Creating Simplicity in Agriculture” – striving to provide farmers accessible, easy-to-use solutions that simplify their lives and improve their crop yields. 

Website: http://www.ma-industries.com/

Published: October 2, 2014