Nov. 25, 2016
Establishment of Crop Protection Distribution Company in Vietnam
Sumitomo Corporation (head office: Chuo-ku, Tokyo; President & CEO: Kuniharu Nakamura), Sumitomo Corporation Vietnam LLC (head office: Hanoi, Socialist Republic of Vietnam), and Summit Agro International Ltd. (head office: Chuo-ku, Tokyo; President: Yukihiko Miki) (these three companies will hereinafter be referred to as “the Sumitomo Corporation Group”), together with Nippon Soda Co., Ltd. (head office: Chuo-ku, Tokyo; President: Akira Ishii; hereinafter, “Nippon Soda”), have established Summit Agro Vietnam LLC (head office: Ho Chi Minh City; hereinafter, “SAV”), a crop protection distribution company, in order to strengthen their crop protection business in the Asia region.
The crop protection market in Asia (excluding East Asia) has steadily grown as population increases have spurred rising food demand, and is now said to be on the order of $6 billion. Vietnam’s crop protection market at about $800 million is second only to India’s within the region.
Paddy field rice cultivation accounts for about 70% of crop protection demand in Vietnam and, due in part to the fact that Japanese techniques for vegetable and flower cultivation are now being introduced, demand for agricultural materials on offer from Japanese manufacturers is anticipated to rise.
SAV provides high-quality distribution agency functions, offering locally-based feedback to Japanese manufacturers on development/marketing proposals tailored to the characteristics of specialty crop protection products (herbicides, insecticides, fungicides) developed by Nippon Soda and other Japanese manufacturers. Intent on accepting capital participation from other companies in future, SAV is seeking to utilize the Sumitomo Corporation Group’s sourcing functions to enhance its product portfolio, improve its customer service, and boost its yearly sales to $20 million within the next five years.
Sumitomo Corporation’s crop protection business got its start in the 1970s with the export of crop protection products for Japanese manufacturers, and it has since helped improve agricultural productivity and efficiency in numerous countries. Currently pursuing a strategy of deepening downstream domains in value chains, Sumitomo Corporation is engaged in distribution operations in more than 30 (primarily Western) countries, and it is striving to extend the scope of its business by, for instance, acquiring distributors of agricultural supply in Brazil and Romania to expand its revenue scale.
With SAV as its first crop protection distribution company in the Asia region, the Sumitomo Corporation Group hopes to reinforce its revenue base in Vietnam and promote the export of Japanese manufacturers’ products via SAV to meet the region’s rising demand for food products.
|[Profile of company]|
|Name||:||Summit Agro Vietnam LLC|
|Head office||:||Ho Chi Minh City, Socialist Republic of Vietnam|
|Shareholders||:||Sumitomo Corporation Group: 87%, Nippon Soda: 13%|
|Principal business||:||Distribution of crop protection products in Vietnam|