CIECH buys out Spain's Proplan

The company CIECH S. A. had taken over 100% of the shares of Proplan – a Spanish supplier of plant protection resources active on three continents. Thanks to this, CIECH gains access to sales markets in southern Europe, northern Africa, South America and Australia, and takes over a portfolio of active ingredients ingredients and 120 product registrations. The transaction value is EUR 44.6m. The takeover of the Spanish supplier is a chance for soaring development of the plant protection product business and diversification of the Group's activities. Proplan had in the year 2017. generated EUR 16m of revenue at high profitability.

Compared to the sale obligation contract from the end of May of 2017., changed was the volume of shares of the Spanish company taken over – moving from 75% to 100%. With that, the transaction value had risen to EUR 44.6m. Proplan will be merged into the structure of the CIECH Group and its results will be consolidated beginning with the third quarter of 2018.

- As announced earlier, we have concluded the takeover transaction of Spain's Proplan and we are beginning with the operational integration of the company with CIECH. This is a very important moment in the recent history of CIECH, which up to now outside of Poland had taken over companies operating on the soda market. The purchase of Proplan is a soaring foreign expansion thanks to access to many promising markets and a large portfolio of product registrations. At the same time, we are beginning a new stage in the development of the agricultural business as part of the Group, fusing intellectual capital of the company taken over and the presence on new markets with CIECH's scale of activity, its production capabilities and the R&D background – said Maciej Tybura, Chairman of the Board of CIECH S. A.

Proplan is a supplier of generic plant protection products utilising outsourcing for production, raw material supply and logistics. The company manages a portfolio of over 120 registrations and fully coordinates the related processes. It is at the same time working on many new registrations across five continents. In the year 2018 itself, Proplan will expand its portfolio by 18 new products. The main market of activity is Spain, but the company supplies plant protection products to France, Italy, Australia and north African countries as well. It is also planning expansion to the markets of South America.

The takeover of Proplan provides the CIECH Group with access to registered active ingredients and end products. This means large savings for CIECH – the process of registration of products on new markets is time-consuming, taking three to five years. In addition, drawing up the documentation and executing the research is related to high costs.

Potential synergies stemming from the takeover of Proplan by CIECH will also span mutual exchange of the product portfolio available on relevant domestic markets (Spain and Poland are the fourth and sixth largest plant protection product markets in Europe, respectively) and access to R&D infrastructure.

According to available analyses, the plant protection product market will grow stably at a pace of approx. 2% per year over the next 5-7 years, reaching a value of approx. USD 65b in the year 2025. The market of generic manufacturers will grow faster (at approx. 4% per year), where CIECH Sarzyna and Proplan are active.