Home' Nufarm Annual Report : Nufarm Annual Report 2017 Contents Insecticide sales were up 18 per cent to
$342 million, with margin percentage in
line with the prior year. The increased
sales were driven mainly by Brazil, with
growth from new products, extensions
into new crops and strong sales of a
Sumitomo-sourced product that controls
white fly infestation in soybeans.
Fungicide sales were up by eight per
cent to $335 million, with margins
ahead of the prior year. The fungicide
portfolio performed well in the period,
with most regions contributing to the
growth. Main contributors to the result
include Mancozeb, Fludioxinil and the
The Croplands equipment business,
based in Australia, generated higher
sales and there was also an increase
in sales of plant growth regulators.
These revenues are captured in ‘other
products’ category sales, which were
up five per cent to $310 million.
The company continued to strengthen
its strategic relationship with
Sumitomo Chemical Company, and
this was reflected in higher sales of
Sumitomo products across Nufarm’s
distribution platform. Nufarm sales of
Sumitomo products grew 38 per cent
to $229 million. The higher sales
were mainly in the US, Canada
and Brazil. Portfolio collaboration
opportunities continue to be
explored and developed.
The company’s seed technologies
segment includes sales of seeds,
managed under the Nuseed business,
and seed treatment chemistry.
Revenues in this segment were
$168.6 million, 17 per cent ahead of
the prior year sales of $143.6 million.
The segment generated a profit of
$36.4 million at the underlying EBIT
level, well up on the $28.7 million
recorded in the prior year.
Australian canola, European sunflowers,
Latin American sorghum and European
seed treatment sales were all strong
contributors to the sales growth.
Australian canola volumes increased
more than 50 per cent, with favourable
early seasonal conditions and market
share gains. Australian earnings also
benefitted from higher collections of
canola end point royalties from the
strong 2016 farmer-saved seed harvest.
The growth in European sunflowers and
Latin America sorghum relates primarily
to market share growth from new
pipeline launches. Sales of seed
treatment chemistry were in line with
the prior year, with a stronger sales
performance in both Brazil and the
US and slightly lower sales in Europe
The regulatory submissions for the
company’s omega-3 canola program
were filed in Australia, the United
States and Canada earlier this year.
The submissions are progressing well,
and the company is on track to initiate
first commercial production in the
2018/19 financial year. The first
large-scale omega-3 canola crop is
being harvested in the United States
this month, representing an important
milestone in the pre-commercialisation
phase of the industry-leading program.
Some 3,000 acres of the proprietary
omega-3 canola are being grown in
Washington State in compliance with
the USDA notification process.
This unique omega-3 canola produces
long-chain omega-3, similar to those
found in fish oil, using a sustainable
land-based source. It has been
developed through collaboration
between Nufarm’s wholly-owned
subsidiary, Nuseed, the Commonwealth
Scientific and Industrial Research
Organisation (CSIRO), and the
Grains Research and Development
Pre-commercialisation plans are
progressing on schedule, with
important fish feed and nutrition
studies underway or planned, and
strong interest from the customer
base. Nuseed will utilise a closed
loop production system for the oil,
in which growers will be contracted
to grow the crop and crushers will
be contracted to extract the oil, with
Nuseed then supplying the oil to
markets including aquaculture feed
companies. The ability to coordinate
the value chain beyond the seed will
allow the company to secure maximum
value from the omega-3 program, while
ensuring quality and providing the
transparency expected by customers.
Nuseed and its partners, CSIRO and
GRDC, have jointly secured a strong
intellectual property (IP) position,
which facilitates a clear pathway to
commercialisation. Several companies
aspire to produce alternative sources
of long-chain omega-3, including BASF.
BASF has chosen to challenge several
of our patents without success. Nuseed
continues to assess actions against
BASF patents in various jurisdictions.
This activity is anticipated to continue
as a normal course of IP estate
management in both companies.
NUFARM LIMITED ANNUAL REPORT 2017
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