With 40 years of experience, Turfal is one of the larger inoculant players in the Brazilian market. It posted revenue of approximately USD 3 million in 2009, and the effect of the acquisition on Novozymes’ sales in 2010 will be DKK 10-15 million for the full year.
Turfal’s inoculant products are microbes that stimulate the growth of crops, especially soybean, by fixating nitrogen. In this way, they enable farmers to reduce their use of fertilizers and save money while also benefiting the environment. The majority of Turfal’s sales are from August to December, which is the Brazilian planting season for soybean.
Exciting growth opportunities
“The main reason for the acquisition is that we want to expand Novozymes’ position within the market for sustainable agriculture," says Thomas Videbæk, Executive Vice President, BioBusiness, Novozymes. "We see exciting growth opportunities on the Brazilian bioagriculture market, and Turfal will give Novozymes direct access to this market.
“In a broader perspective, this is an opportunity for Novozymes to create more sustainable agriculture and thus keep helping to meet the enormous challenge of feeding the world in the future. Global agricultural production needs to increase by 70% to be able to feed a population that is expected to reach over 9 billion people by 2050,” Thomas Videbæk continues.
Increasing yield in a sustainable manner
The challenge is to increase yields on the same amount of agricultural land without extra cost to the environment. “The nitrogen-fixating inoculants from Turfal and Novozymes can help farmers reduce their need for nitrogen fertilizers by up to 80% on leguminous crops. This is a unique value proposition in a world where farmers are under pressure to increase yields in a sustainable manner,” explains Thomas Videbæk.
Turfal is a strong organizational and cultural match for Novozymes, and it will be fully integrated into Novozymes’ global operations. Conveniently located only 25 miles – or 40 kilometers – from Novozymes’ Latin American headquarters in Curitiba, Turfal will constitute the platform for all of Novozymes’ sustainable agriculture business in Brazil, where it will provide Novozymes with a platform for faster testing, registration, and sale of Novozymes’ products. Turfal also has an exciting portfolio of new opportunities in the pipeline.
Vergent Partners, in collaboration with Socios Financieros, the São Paulo and Madrid offices of Global M&A GmbH, one of the world's leading independent M&A advisory firms, acted as advisors to Novozymes in the acquisition.