Nufarm - a sustainable growth story

Nufarm - a sustainable
growth story
Doug Rathbone
Managing Director
A Day on the Farm
JP Morgan, Sydney
June, 2008
Nufarm - a sustainable growth story
 Agriculture - a demand
driven industry
 Seasonal and
business update
 Building the platform
for continued growth
Using crops to produce energy
Eating more protein/meat
Growing in wealth
Growing population
Demand
Agriculture - now demand driven
Addressing the Yield/Demand gap
Demand can only be met by a combination of
additional acreage and increased yield
3.5
Demand
3.0
 Seed technologies
 Fertilizer
 Crop protection
Indices
2.5
Yield
2.0
1.5
Acreage
1.0
 Changes to 'set-aside'
 Conversion to cropping
in Brazil
0.5
Forecast
0.0
65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13 15
Source: USDA, FAO, Goldman Sachs Commodities Research
Implications for farm inputs
 Farmers have a greater economic
incentive to produce bigger, healthier
crops
 Developing agricultural markets will see
significant increase in adoption of
technology
 Global agriculture will continue to
'consolidate'
Bigger farms
More 'corporate' farming
 A demand driven business environment
should improve pricing power
Agriculture - now demand driven
Focus on
Glyphosate
Glyphosate
The world's biggest selling crop protection product
 Expansion of GM cropping
USD (b)
6
>5.0
150
125
100
75
50
25
0
5
4.2
3.8
4
3.2
Hectares (m)
3.4
3
2
1996 1998 2000 2002 2004 2006 2008
1
 Increased adoption of minimum tillage
0
2004
2005
2006
2007
*
2008
Source: Amis Global
* Nufarm estimate
 Volume increase
 Price increase
 Additional land brought into
production
Changes to set-aside in Europe
Expanded acres in Brazil
Glyphosate - Nufarm's objectives
 Consolidate position as global no. 2 supplier
 Develop 'co-manufacturing' relationships
Secure supply
Share in manufacturing margin
 Establish strong brands and
differentiated formulations
 Use glyphosate as a platform
to build broader product
portfolio
Glyphosate - sourcing and supply
China
Monsanto
Joint
ventures
Nufarm
Technology
transfer
'Tech' position
Long term supply
agreements
Last stage synthesis and
formulation
BRANDING; PRODUCT DIFFERENTIATION;
MARKETING = VALUE ADDING
Customers
Global
supply
agreement
'Roundup'
agreement
Aust/NZ
Seasonal update
Australia
 Below average autumn rainfall
Early June rains in some regions
 Much of the crop was dry sown
 Increased plantings
ABARE: Up 9% on '07 to 22.3m hectares
 Follow up rains now needed
 NSW is most vulnerable
Seasonal update
North America
 Unusually wet through mid west of USA
Negative impact on yields
Will delay some sales
 Good rains but unseasonably cool in Canada
Selling period later than normal
South America
 Brazil soy and corn seasons were good
Mostly first half for Nufarm
 Negative impact from drought in Argentina
Wheat crop plantings down by 20%
Seasonal update
Europe
 Mild winter and wet spring in most of Europe
 Most markets seeing positive growth
Set-aside land back to zero
Good crop prices
Good seasonal conditions
A platform for continued growth
Integration update:
AH Marks
 Business transferred to Nufarm on March 5
 Business systems (email; financial reporting; HSE; capex) all fully
integrated
 New management structure announced and in place
 Rationalisation of regulatory submissions
 Customer transfer to Nufarm regional businesses well progressed
 Planning for additional capacity utilisation and associated capex
 Product development programs evaluated
 On target for 2008 contribution and 2009 synergies
A platform for continued growth
Integration update:
Etigra
 Beneficial interest to Nufarm from April 1 (completed May 1)
 Etigra employees (26) have transferred to Nufarm
 New management structure announced and in place
 Business systems integration well underway (cut-over on
August 1)
 Communication with customer base, with key distribution
agreements now assigned
 On target for 2008 contribution and 2009 synergies
A platform for continued growth
New opportunities in cotton
 Acquisition of DuPont PGR
products
Current annual sales = USD10m
USA, Brazil, Australia
 Etigra cotton products will
help achieve strong portfolio
position
 Cotton will become
a front-line crop
segment
A platform for continued growth
And segment expansion, generally …
'Clean Start' -
glyphosate/carfentrazone: premium pre-plant
for high value pulses and canola in Canada
'Nuprid Max' -
Imidacloprid/tebuconazole: seed treatment in
cereals for Europe
'Abamex' -
Abamectrine: miticide for cotton
and citrus in Brazil
'Trooper' -
Picloram/2,4-D: herbicide for
pasture segment in Brazil
And a portfolio for sugar cane in Brazil
Summary
 A focused crop protection company with core
strengths in value-added, off-patent chemistry
 Strong geographic platform
Leadership position in home market
Excellent platforms in strategic growth markets
 Expanding products portfolio
Global leadership position in phenoxies; world no. 2 in gyphosate
Product diversification moves us into new crop segments
 Track record of strong and effective partnerships and
value creating acquisitions….with more to come
A great time to be in the
business of agriculture
Nufarm Limited
Head office: 103-105 Pipe Road, Laverton North, Vic. Australia.
Tel: 61 3 9282 1000 Fax: 61 3 9282 1111 www.nufarm.com