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Syngenta Completes Brazil & Switzerland Expansion Projects

CZZ SYT ANDE LMNR

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Renowned Swiss agrochemicals company, Syngenta AG (SYT - Free Report) has successfully accomplished its capacity expansion projects at vital sites in Switzerland and Brazil. The move will boost the company’s innovation-based growth trajectory and involves a gross investment of $240 million.

Syngenta has constructed a new ELATUS fungicide plant in Paulinia, Sao Paulo, Brazil. It is the first Latin American plant to use the PEPITE technology. This technology would enhance transportation of the ELATUS active ingredients to the plant tissues, thus ensuring efficient as well as swift protection of the crop.

In addition to this, Syngenta has also expanded a corn seed factory in Formosa, Goias, Brazil. The development is estimated to improve the plants productivity from 400,000 to 1.6 million bags of corn a year.

Along with the abovementioned moves, the company has also successfully widened its production facility for S-Metolachlor (a premium herbicide) in Kaisten, Switzerland. It is a vital weed-controlling chemical and is presently used in several brands such as DUAL GOLD, ACURON and LUMAX.

Earlier in Jun 2016, Syngenta accepted the $43-million takeover offer provided by the renowned state-owned Chinese company, China National Chemical Corp. (‘ChemChina’). The drop in commodity prices has put pressure on companies like Syngenta, with farmers lowering their demand for supplies. At this stage, companies within the global seeds, traits and agricultural chemical industry are banking on the strategy of consolidation.

Syngenta believes that its business would strengthen under ChemChina. The Zacks Rank #3 (Hold) stock perceives that its parent-to-be would offer a buffer at a time of low grain prices, poor credit opportunities among Latin American farmers and a comparatively benign year for pesticides. However, we recognize that the transaction would not have a smooth ride due to antitrust regulatory obstacles.

Share price of Syngenta was $87.8 per share as on Oct 3, 2016. The stock has gained roughly 12.5% since ChemChina first placed its offer on Feb 3, 2016.

Stocks to Consider

Some better-ranked stocks within the industry are listed below:

Limoneira Company (LMNR - Free Report) saw a 42.4% upward revision in the Zacks Consensus Estimate for fiscal 2016 over the last 60 days. Currently, Limoneira Company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Andersons, Inc. (ANDE - Free Report) currently carries a Zacks Rank #2 (Buy). Over the last 60 days, the Zacks Consensus Estimate for the stock has moved up by 24.4% for 2016.

Cosan Limited (CZZ - Free Report) presently holds a Zacks Rank #2. Over the last 60 days, the Zacks Consensus Estimate for the stock has increased by 25% for 2016.

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