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CIECH Group takes over a Spanish supplier of crop protection products operating on three continents

CIECH S.A. signed a contract worth EUR 33.5 M for the purchase of 75 % of shares in a Spanish company – Proplan. Thus, it gained control over the company having over 120 active registrations of crop protection products, present on three continents. The acquisition is an important step in strengthening CIECH's position on the global market of crop protection products (CPP) and an element of the Group's business diversification strategy. The global market for CPP is characterised by stable growth and high profitability.
By taking control of the Spanish company, CIECH Group:

  • gains access to new markets, in particular Spain, as well as other countries in southern Europe, Africa, Australia and also South America;
  • takes over the portfolio of active substances and over 120 product registrations, as well as a package of ongoing registration processes, thanks to which it will significantly increase its offer and geographical coverage of its operations;
  • increases its attractiveness in looking for partners in the process of obtaining rights to new active substances and registration of products in new markets.

Proplan (the Company) is characterised by high dynamics of revenue growth and high profitability (EBITDA margin > 20%). The potential synergies following the acquisition of Proplan by CIECH include mutual exchange of the portfolio of products available on their domestic markets (Spain and Poland are the fourth and the sixth largest markets, respectively, for CPP in Europe) and access to research and development infrastructure.

CIECH purchased 75 percent of shares in Proplan for a price of EUR 33.5 M from its existing shareholders. In 2017, the Spanish company generated approx. EUR 16 M in revenues while maintaining high profitability. During the last four years, Proplan has doubled the value of its sales.

Proplan is a supplier of generic crop protection products. It operates in the Asset-Light business model. It uses outsourcing in the area of production, raw material delivery and logistics. The company manages the registration portfolio and fully coordinates the related processes. In total, the company has 126 registrations. At the same time, it is currently making attempts to obtain many new registrations on 5 continents. In 2018 alone, Proplan will expand its portfolio with 18 new products.

Spain is the main operational market for Proplan but the company also supplies its crop protection products, among others, to France, Italy, Australia and African countries. Moreover, it plans to expand into South American markets.

- One of our key challenges is to diversify CIECH Group’s business, based, to a large extent, on soda. Thanks to the implementation of the strategy prepared together with our owner - Kulczyk Investments - over the last three years, our share in the Polish market of crop protection products has increased by over 40%. However, we do realise that organic growth in this business brings results only in the long run. Therefore, in order to accelerate the process of development of our AGRO business, we carefully analysed the environment in order to find an operator with such assets as knowledge and experience, supported by excellent financial results. Proplan is a company in which the greatest asset is its intellectual property and its presence on many attractive markets on three continents. The acquisition of this company will enrich our product offer and expand the activity of CIECH Group in the area of CPP on markets where we have not been present so far – says Maciej Tybura, President of the Management Board of CIECH S.A.

The takeover of Proplan provides CIECH Group with access to registered active substances and end products. It entails considerable savings for CIECH – product registration on new markets is time-consuming and takes between 3 and 5 years. In addition, preparing documentation and carrying out research involves high costs.

According to available analyses, in the next 5-7 years, the market for crop protection products  will grow steadily, at a rate of approx. 2 percent per annum, reaching in 2025 the value of approx. USD 65 billion. The market of generic manufacturers – i.e. such as Proplan and CIECH – is expected to grow faster (at a rate of approx. 4% per annum).

It is expected that the acquisition of the Spanish company will be closed in Q3 2018.

Contact person:
Mirosław Kuk, Head of PR, CIECH Group
miroslaw.kuk@ciechgroup.com, tel. +48 723 66 86 86.

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