Japan
January 31, 2023

Sumitomo Chemical has decided to acquire FBSciences Holdings, Inc. (“FBS”), a U.S. company engaged in the business of biostimulants, a group of naturally-derived agricultural materials and a class of biorationals*. The acquisition is due to be completed subject to the prescribed procedures.

Biorationals, which have a global market valued today at about $10 billion, about one-tenth that of agricultural chemicals, are expected to see continued demand growth as the need for crop protection products with lower environmental impact increases among growers and consumers. Biostimulants are agricultural materials derived from natural products that have the effect of drawing out the innate power of crops and soil. The biostimulant market, the largest segment of biorationals, is worth approximately $3.5 billion and is growing at double-digit rates. By inducing defenses against non-biotic stresses, biostimulants promote healthy crop growth and nutrient absorption, thereby improving crop quality and increasing yields. They also promote efficient use of chemical fertilizers and reduce their application.

Early on, Sumitomo Chemical began to focus on the potential of the biorationals business, and acquired the biorationals business of Abbott Laboratories, Inc. of the U.S. in 2000. Since then, the Company has continued to strengthen and expand the business, with its U.S. subsidiary Valent BioSciences LLC at the core of the effort. In recent years, the Sumitomo Chemical Group has accelerated strategic measures to enhance its operations in this area, including building up a production plant for active ingredients for microbial crop protection products in the U.S. in 2014, acquiring a U.S. rhizosphere microbials business in 2015, opening a biorational research center in 2018, and launching dedicated biorationals sales organizations at the Group’s major overseas locations in 2020.

FBS develops, manufactures, and markets biostimulants and biopesticides made from natural organic matter sourced and processed with its proprietary methods. With products and technologies applicable to more than 50 different crops as proven with extensive field trial data, and with over a decade of commercial success, the company has been rapidly growing its business in recent years, particularly in the U.S. Sumitomo Chemical regards this acquisition as a step toward full-scale entry into the biostimulant field. The Sumitomo Chemical Group will strive to further expand its biorational business by combining its global footprint and resources with FBS's product portfolio and technological know-how, while also seeking to create new synergies between biorationals and conventional crop protection products.

The Sumitomo Chemical Group will continue to develop innovative solutions in the agricultural field by fully utilizing Group companies’ diverse management resources for the agricultural chemicals and biorationals business, thereby contributing to the stable supply of safe and high-quality food, for which demand is increasing worldwide.

* The Sumitomo Chemical Group defines microbial pesticides, plant growth regulators and rhizosphere microbial products derived from natural sources, as well as solutions using these products to protect crops from pests and enhance crop quality and yield, as “biorationals.”

Company Profile of FBS

* As a result of the acquisition, FBS will become a subsidiary of Valent BioSciences LLC, a subsidiary of Sumitomo Chemical.

Website: http://www.sumitomo-chem.co.jp

Published: February 1, 2023