After nearly tripling in size in Brazil, company does not rule out new purchases
20/12/2022
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Andre Dias — Foto: Silvia Zamboni/ Valor
After nearly tripling in size in Brazil by 2022 and reaching revenues of R$8 billion, Nutrien has elected as goals for the country in 2023 to ensure the proper integration of assets purchased this year, foster the organic expansion of the current distribution chain of agricultural inputs, open new stores and continue to keep an eye out for acquisition opportunities.
“After a year like this, in which our growth was very accelerated, we had to rebalance priorities. We will consolidate our platform, but without stopping advancing,” said André Dias, president of the Canadian multinational in Latin America, to Valor. This advance happened mainly in the area of retail inputs, although the company continues to invest in the expansion of its fertilizer blending business in Brazil.
The investments in the acquisitions of three new distribution networks in the country totaled R$500 million this year. With Marca Agro and its seven stores, Nutrien improved its position in Minas Gerais and its access to coffee growers; with Casa do Adubo and its 39 points of sale in 11 states, it added annual sales of around R$2.5 billion and consolidated the local sourcing of the operation; and with the purchase of Safra Rica, which still depends on the approval of Cade, the antitrust regulator, it incorporated nine more units in São Paulo and Minas Gerais, with an eye on sugar cane and orange producers.
Safra Rica was Nutrien’s seventh acquisition in this segment since the company entered the Brazilian market in 2020. Now, the company already has 120 commercial units – the retail chains in Argentina, Chile, and Uruguay combined reached 188 units in Latin America, a region where the company’s revenue will reach R$12 billion in 2022. Of the R$4 billion forecasts for the other three countries that complete Latin America’s revenues, Argentina accounts for approximately three quarters.
Of this year’s purchases, the one that is demanding more effort in the integration process is Casa do Adubo. Besides the large number of stores and states of operation, the business model is different, with a focus on sales to small producers and small distributors (via the subsidiary Casal). “And that is why it attracted us. Certainly, this process will serve to guide our next acquisitions,” said Mr. Dias.
Despite the strong growth reported in 2022, when the number of customers exceeded 110,000, it was a difficult year for sales of agricultural inputs in the country, especially because of the risk — which was not confirmed — of shortage of fertilizers in Brazil after the Russian invasion in Ukraine and the sharp rise in nutrient prices in the domestic market derived from this risk. In May, fertilizers reached a peak of more than $1 per tonne, compared to about $600 today. In 2023, the scenario may improve.
At the same time, Nutrien plans for next year the inauguration of its fifth fertilizer blender in the country, in Alfenas (Minas Gerais). The company has four units of this kind, located in Itapetininga (São Paulo), Araxá (Minas Gerais), Cristalina (Goiás), and Morrinhos (Goiás). The blenders receive the raw materials and formulate the fertilizers used by farmers in their plantations.
*By Fernando Lopes — São Paulo
Source: Valor International