In October this year Sumitomo Chemical will celebrate its 100th anniversary and as we move closer to that date, they plan to involve customers in activities to celebrate and mark the occasion. One hundred years of successful operation is an impressive achievement and Sumitomo looks well positioned for a very productive second century. In 1915 Sumitomo Chemical commenced operations as a fertiliser manufacturing plant in Niihama, Japan. The plant utilised by-products from Sumitomo tin and copper mining operations, the history of which date back to the 16th century and the House of Sumitomo.
Today Sumitomo Chemical is part of the Sumitomo “family” of companies, the result of reforms during the 20th century which saw large Japanese industrial conglomerates dismantled into independently managed businesses, which operate across a diverse range of sectors from banking and mining, to the manufacture of tyres and golfing equipment.
Sumitomo Chemical Australia Managing Director, Tony Brookes, has spoken to us about the company’s history and offered some comments on the future. “From a fertilizer factory employing 50 people in 1915 to a diversified global chemical company today employing 37,000 people, Sumitomo Chemical has been at the front line of the 20th century’s industrial and technological revolution. Whilst maintaining a business philosophy that gives priority to integrity, contribution to society, long term planning and solutions through innovation – each in its own way integral to the organisation’s longevity.”
Sumitomo Chemical’s origin began with the conversion of potentially harmful mining by-products into valuable fertilisers for agriculture and food production. The transition from fertiliser manufacturing to chemical production began in the 1930s when plans to scale up production of industrial chemicals were announced to the market as the company went public with a stock offer. In the 1940s Sumitomo ventured into Fine Chemical production (dyestuffs, pharmaceutical intermediates etc).It was in the 1950s however that Sumitomo began to really diversify its operation with full scale investment into petrochemicals, pharmaceuticals and agrochemicals. The Agricultural Chemical business started with the successful synthesis of allethrin in 1949, the first of many synthetic pyrethroids(SPs) developed and commercialised by Sumitomo over the next two decades. This range of specialised SPs revolutionised safe household insect control andare prolific domestic aerosolinsecticides even today. As we know, SPs have in turn played an important role in agricultural production – crop and animal – ever since.
The division is now a significant investor in the development of both new conventional chemistry and biorational products for agriculture and public health applications. Its wholly owned subsidiary, Valent Biosciences (VBC), operates the largest biological production facility in the world. The company has also been heavily involved in globally co-ordinated mosquito control and management programs with the united goal of ridding the world of malaria and dengue fever. Throughout Africa and SE Asia its Olyset® nets have revolutionized the global fight against malaria. Protecting nearly 800 million people since it received WHO recommendation in 2001. Over the past six decades, the Health and Crop Science Division has evolved into a strong global operation that accounts for about 14% of the Sumitomo Chemical’s total revenues of around US$25 Billion per annum.
Sumitomo Chemical Australia Pty Ltd was established in 1998 in order to take on the distribution of its products previously handled by other companies. It also initiated development work for new chemistry in the Sumitomo R&D pipeline.
The business grew rapidly with the success of the outstanding herbicide clethodim and the acquisition of the Abbott Laboratory biological business (now VBC). Our focus from day one was on new chemistry and its application to Australian agriculture rather than competing in the post patent space.
Tony Brookes takes up the local story, “To date we have registered and commercialised fourteen new active ingredients, at the rate of around one per year. New product development has been the cornerstone of our local business’ sustainability given that all our original products are now well and truly post patent. While it appears that our local focus has been on horticulture and turning out niche, technical type products (think PGRs and IGRs), this is only because, we have yet to develop a molecule with great prospects in cereal production. It has however allowed us to really focus on certain market segments where we know we can offer technical expertise and support for our customers. Our competitive advantages lay with our biological range of products, our technical know-how and our local autonomy to operate. We have a short chain of command and will respond quickly to customer and market needs. Outside of agriculture we have an interesting public health and amenity business involved in activities ranging from invasive ant eradication programs to hardware consumer goods.“
While some companies could be seen to be pulling back from the agrochemical space in favour of human health, Tony sees a strong future for Sumitomo in agribusiness. “Sumitomo definitely views its life sciences businesses as a priority for future growth and investment. Taking a 20% stake in Nufarm in 2010 might be seen as a first step towards greater participation in the global post patent agricultural chemical market.
On the other side of the equation, we are seeing ongoing investment in building its strategic biorational platform. Our subsidiary, Valent Biosciences is a world leader in biorational product development and recently opened its state of the art production facility in Osage Iowa. Last year Sumitomo Chemical took a controlling interest in MGK International, a US based company and major distributor of natural pyrethrum (the botanical insecticide) for use in households and agricultural production and In February this year it announced the acquisition of Mycorrhizal Applications, Inc. the world’s largest producer of mycorrhizal fungal innoculant. All of these recent investments have potential flow- on opportunities for our Australian operation.
The next 100 year plan for Sumitomo Chemical is focussed on change and innovation for a better tomorrow. Sustainable food production, human health and efficient energy generation are seen as key drivers for the business going forward”