In addition to the stocks of pharmaceutical multinationals, financial investors are focusing on the giants of the agro-pharmaceuticals. That is to say in international listed companies specializing in fertilizers, biostimulants and products that help and support crops. Because the pandemic blocks the unnecessary consumption of families, but not food, especially vegetables.
Italy is a strong consumer of crop protection products, being the first agricultural country in Europe. The latest Eurostat estimate estimates agricultural business to be over € 32.2 billion. Almost a fifth of the added value in the entire agricultural system is generated in Italy. Here are the players to keep an eye on according to the ProiezionidiBorsa Finance and Market Studies Office.
Foreign giants and Italian players
Because it’s time to invest in the agro-pharmaceutical giants. The fertilizer and crop protection products market is dominated by listed multinationals such as BASF, Bayer and Syngenta.
Alongside these there are valid Italian players such as Sipcam-Oxon based in Pero (MI), production plants all over the world and a thousand employees.
Or the innovative Valagro, with headquarters in Atessa in Abruzzo. It produces bio stimulants, micronutrients and fertilizers. In 2019 it won the “Best Performance Award”.
Agrofarma / Federchimica reports that the Italian agro-pharmaceutical industry boasts a turnover of over 950 million euros.
Because it’s time to invest in the agro-pharmaceutical giants
Among the companies to keep an eye on is Isagro, a company listed on the Star segment of the Italian Stock Exchange and active in low environmental impact agricultural products, which is reviewing the focus of its business. After selling the Asia division (for 50 million euros), it sold the Fluindapyr molecule to the American company FMC Corporation. It then acquired the Phoenix-Del company, active in the copper-based products sector, for 3.6 million euros.
All these moves will lead to a recovery of organizational efficiency from 2022. A few days ago, the President and CEO, Giorgio Basile, announced an 18% increase in revenues from the sale of agropharmaceuticals and services (82.7 million euros against the previous 70.0 million). EBITDA returned positive and equal to 4.6 million euros.
The “green” focus on cupric products
The sale of the Fluindapyr molecule is part of the steps necessary to pursue Isagro’s new mission, the development of “green” products. Starting from the second half of 2019, and during 2020, Isagro has actively worked on the implementation of its new business model.
Today it is already operational and provides for a specific focus on the development of “bio-copper” products (ie of biological and natural origin and based on copper), also through growth operations by external lines.
Investors are particularly interested in the financial resources generated with the disposals of 2019 and 2020. Together with the change in the business model, they will allow them to forecast important improvements in ordinary results. And obviously make new acquisitions.