TOKYO -- Sumitomo Chemical will acquire an Australia-based supplier of a natural insecticide ingredient as part of a larger push toward environmentally friendly agrochemicals.
The owners of Botanical Resources Australia, the largest player in the field, will transfer within the month a stake exceeding 80% in a deal seen valued at roughly 15 billion yen ($133 million). Combined with existing group holdings, Sumitomo Chemical will own all shares in the Tasmanian concern.
Botanical Resources makes pyrethrins, a natural insecticide extract found in pyrethrum flower heads that acts on the nervous systems of such pests as mosquitoes and ticks. It owns farms that grow pyrethrums to be processed.
The company is strong in improving pyrethrum yields per acre and in developing varieties that maximize pyrethrin content. Annual sales apparently reach the equivalent of 6 billion yen to 7 billion yen.
Buying out Botanical Resources will give Sumitomo Chemical full control of a production chain stretching from the pyrethrins to finished products. The future Japanese parent will also improve on pyrethrum cultivation techniques and explore broader uses for pyrethrins.
Sumitomo Chemical is pouring resources into biorationals operations with a goal of boosting their sales to 45 billion yen in fiscal 2020. Biorationals impose a lighter burden on the environment, and demand from developed countries is expected to be strong. The company announced this August the acquisition of a plant growth regulator business from Kyowa Hakko Bio. Such compounds are used for such applications as making grapes seedless.
Pyrethroids, organic compounds similar to pyrethrins, also occupy a large part of the insecticide market. Sumitomo Chemical's Olyset Net, which employs the substance to protect people from malaria-carrying mosquitoes, is in use in more than 80 countries.