News131201_Excel - Nufarm

13th December 2001

Media Release

Nufarm moves into insecticides via investment in India

Nufarm Limited announced today that it had signed a letter of intent to invest in the agricultural chemicals business of Excel Industries Limited, a leading crop protection company in India. Nufarm will pay an undisclosed cash sum for an initial strategic stake of 14% in the business.

The proposed equity investment will secure for Nufarm a source of supply for a range of insecticides and other agricultural chemicals which are complementary to Nufarm’s existing product range.

It is envisaged that Excel will restructure its agricultural chemical interests into a separate publicly listed entity. The current major shareholder of Excel, the Shroff family, and Nufarm have agreed to vote their collective shareholdings in the best interests of the new entity. The deal is expected to be finalised by early 2002.

Nufarm’s Managing Director, Mr Doug Rathbone, said the deal is consistent with Nufarm’s strategy of broadening its product portfolio and accessing new sectors of the global crop protection market.

“The Agtrol International acquisition (May 2001) facilitated our entry into the fungicides market. This agreement will move us into insecticides, which - in turn - opens up new geographic and crop opportunities.”

Excel currently holds more than 140 product registrations and exports product to some 45 countries. Nufarm will have rights to access the registration data in order to develop products under the Nufarm brand for sale within international markets.

Insecticides manufactured by Excel include endosulfan and chlorpyrifos, which are used extensively in major crops such as cotton, rice and soyabean, and in horticulture and plantation crops.

Mr Rathbone said Excel is a long standing public company with a reputation for quality manufacturing and innovative product formulation and development skills.

“We will have a secure source of supply from a lower cost manufacturing base; product registrations in Europe and other international markets; and access to a new product pipeline.

“The broadening of Nufarm’s product portfolio from its strong base in herbicides will give the company more scope to strengthen our distribution relationships and will help drive our growth into a number of important regional markets,” Mr Rathbone said.

He said Excel is intent on broadening its product range within the expanding Indian market. Under the proposed deal, Nufarm will offer technology and the rights to access its registration data to Excel and will supply herbicide products to Excel for sale within the Indian domestic market. Excel will become the exclusive channel for Nufarm for supply of its crop protection products into the Indian market, and for sourcing agricultural chemicals from India.

Excel is based in Mumbai, and operates crop protection manufacturing and formulation facilities at three locations within India. It recorded sales for the year ended March 31, 2001, of approximately AUD95 million in its agricultural chemicals business.

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Further information:
Robert Reis
Corporate Affairs
Phone (61 3) 9282 1177

Additional background:

The global crop protection market is estimated to be worth US$28-US$30 billion. Approximately 50% of the market is herbicides (weed killers used in a variety of crops, but with widespread use in broad acre farming); 25% is insecticides (major uses in cotton, rice, fruit and vegetables); and 20% is fungicides (major uses in fruit and vegetables and cereals).

Nufarm is ranked as the 10th largest crop protection company in the world, with sales of some $920 million in financial year 2001. Nufarm’s traditional strength has been in the herbicides sector where it is one of the world’s leading producers of a class of products known as phenoxy herbicides.

Nufarm acquired a US based fungicides business, Agtrol International, earlier this year, signalling its entry into that sector of the market.

The global insecticides market is valued at approximately US$7.5 billion. The use of insecticides is directly linked to the incidence of insect attack. The expanding agricultural markets of Asia and Latin America are expected to account for the highest growth rate in the use of insecticide products.

Excel is a leading producer of a range of generic insecticides and is currently developing a number of new products. One of the Excel products to which Nufarm will gain access is chlorpyrifos, which is one of the world’s largest selling insecticides (approx. US$450m) and controls a broad spectrum of insects in a variety of crops.

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