On April 9th, EqualOcean learned that Syngenta(先正达) has acquired Produtecnica, an agricultural input distributor based in Brazil, marking the latest move in Syngenta's ongoing expansion of its distribution channels in the Brazilian agricultural sector.
Produtecnica operates six chain stores across the states of Tocantins, Maranhão, and Piauí. Additionally, Syngenta plans to add approximately 90 new self-owned retail stores, further expanding its local marketing network alongside its existing network of over 200 partner distributors and cooperatives.
This acquisition represents Syngenta's fourth action in the Brazilian agricultural input distribution sector within the past three years and is a crucial component of its strategic deployment five years ago.
As early as 2019, Syngenta began direct involvement in the distribution of agricultural inputs in the southern region of Brazil through the establishment of Atua Agro chain stores.
Currently, Syngenta's products in Latin America primarily consist of crop protection products and seeds. Recent performance indicates that Latin America is Syngenta's largest overseas market.
According to estimates from the Brazilian agricultural think tank platform Nirus Agrointelligence, the Brazilian crop protection market grew by 17% in 2021, from BRL 620 billion in 2020 to BRL 730 billion in 2021. Revenues and profits in submarkets such as seeds, fertilizers, and specialty chemicals have all grown by double digits.
Despite rapid organic growth, Syngenta recognizes that relying solely on this channel makes it difficult to quickly establish a foothold in the distribution market. Therefore, since 2021, the company has been implementing a merger and acquisition strategy, acquiring distributors such as Dipagro, Agro Jangada, and Agrocerrado.
By providing agricultural inputs to Brazilian growers and ultimately purchasing soybeans through barter trade for direct export to consumer countries, Syngenta has bridged the industry chain and participated in the operation of downstream international agricultural product markets, thereby driving the development of upstream seed, fertilizer, and agrochemical businesses.