A year after the acquisition of Proplan: CIECH Group implements its global AGRO business development strategy by increasing the number of products
New products, acquisition of rights for attractive active substances by CIECH, sales of MCPA produced in Nowa Sarzyna on the Spanish market, planned expansion to the Central and South American markets, as well as new European countries with a growing offer of plant protection products – these are the main effects of the acquisition of Proplan and its full integration with the CIECH Group. Thanks to the acquisition of the Spanish supplier of plant protection products, CIECH is now present with its AGRO product range in more than 50 countries around the world. In the year following the acquisition, the company managed to integrate the product registration departments of Proplan and CIECH Sarzyna, as well as carry out a full restructuring of the Spanish company, along with setting new business goals and objectives, in line with the Group Strategy adopted for 2019–2021, envisioning expanding the product portfolio and increasing the share of sales of plant protection products outside Poland past 40 percent.
The AGRO business of the CIECH Group is based on two companies operating in the plant protection product segment. The Spanish Proplan conducts its activities mainly on the Iberian Peninsula and in North Africa, with a particular focus on Algeria and Egypt. It providies insecticides for citrus fruits and herbicides for cereals to farmers on its home market, as well as insecticides on the African markets. In addition to its home market, CIECH Sarzyna also serves Central and Western Europe, the United Kingdom and Scandinavia. Plant protection products from Nowa Sarzyna – the largest Polish herbicide producer – are sold on nearly 40 international markets.
The CIECH Group acquired 100% of the shares of Proplan – a Spanish plant protection product supplier operating on three continents – by the end of July 2018. The transaction value amounted to 44.6 million EUR. Proplan is a manufacturer of generic plant protection products outsourcing its production, raw material supply and logistics. The company manages a portfolio of more than 120 registered products and fully coordinates the related processes and strives to obtain numerous new registrations on five continents. In 2018 alone, Proplan expanded its portfolio with 18 new products.
Thanks to the acquisition of Proplan, CIECH gained access to the large markets in Western and Southern Europe, thus increasing the revenues and profits of its AGRO business, which had a direct impact on the Group's results in 2018. Another key benefit stemming from this acquisition is the possibility of exchanging product portfolios between both companies on their main markets. CIECH has already launched a number of projects aimed at offering products containing MCPA as an active substance, produced in the Polish plants of the Group and used for protecting cereals and maize on the Spanish market. On the other hand, Polish market can already enjoy products offered by Proplan, including Toscana. Great market potential has opened up for CIECH with access to the active substance Acetamiprid, the insecticide used in protection of numerous cereals, fruit and vegetables.
Another important aspect of merging the potentials of both companies was the integration of their respective registrations departments, which are responsible for overseeing the lengthy process of introducing products to new markets. This means major savings for CIECH, as registering a product in new markets is time-consuming and takes anywhere from 3 to 5 years, not to mention the costly process of preparing documentation and carrying out the required tests. What is more, the Proplan acquisition enabled CIECH to increase its export share in the revenues from the sales of plant protection products. The strengthening of this revenue stream will improve the company’s resilience in the face of changing weather in Poland and will reduce the seasonality effect, which is prevalent in this line of business.
“The quick and efficient merger of Proplan with CIECH Group’s AGRO business enabled us to move on to another development stage of this area of our business with a view to accelerating the product and geographic expansion of the AGRO business. We are already planning to expand to new foreign markets – we are particularly interested in countries where the demand for plant protection products is growing the fastest. Proplan acquisition is a key element of the implementation of our strategy, which envisions diversification of our activity areas and growing revenues and profits from high-margin non-sodium businesses,” says Dawid Jakubowicz, President of the Management Board of CIECH S.A.
According to the available analyses, the market for plant protection products will grow steadily at a rate of about 2 percent per year over the course of the upcoming 5 to 7 years, achieving the value of nearly 65 billion USD in 2025. The market of manufacturers of generic products – including CIECH Sarzyna and Proplan – will see a faster growth (at a rate of about 4 percent per year).
The offer of the AGRO business currently includes about 50 CIECH products in Poland, as well as 24 PROPLAN products in Spain. Around the world, Proplan boasts more than 220 registered products in 48 countries, including herbicides, fungicides, insecticides, foliar fertilisers, seed dressing products and other complementary products.
CIECH Sarzyna is the largest Polish manufacturer of plant protection products, which recently celebrated 80 years of activity on the Polish market. The best-known CIECH Sarzyna trademarks among Polish farmers include the CHWASTOX brands – some of the most popular weed control products in Poland, which has been trusted by three generations of users.