Mitsui to buy US biopesticide company
Trading house sets sights on green alternatives to farm chemicals
TOKYO -- Mitsui & Co. will acquire U.S. company LAM International to broaden its biopesticide offerings, an arena rich in growth potential.
The Japanese trading house is expected to pay about 1 billion yen to 2 billion yen ($8.9 million to $17.9 million) for the Montana-based company, which makes biological pesticides using a fungus strain.
Mitsui already has an American biopesticide subsidiary, Certis USA, based in the state of Maryland. Certis has liquid fermentation expertise while LAM is strong in solid fermentation. The strengths of both could be brought together. Certis' sales channels, which span 50 countries, would be tapped to sell LAM products.
The market for biopesticides is estimated at $2.6 billion -- only about 5% of the broader pesticide market. But the segment is expanding at an annual clip of at least 10% and is seen reaching $7 billion by 2025. Insects are less prone to develop resistance to biopesticides than to chemical varieties, and the former is appealing to the growing ranks of farmers and consumers conscious of the environment.
Pesticide development requires testing of efficacy and environmental impact in each country. And formulation technology, needed to ensure stability and storability of biopesticides, is expensive. The acquisition of LAM would bulk up Certis, helping secure ample funding for development.
Mitsui has pesticide sales companies in the U.S. and Europe that distribute chemical pesticides produced by Japanese companies, among other things. In line with its efforts to expand its in-house lineup, the company bought fungicide businesses from DuPont in 2014 and from Monsanto in 2016.