Makhteshim-Agan Industries Ltd.

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Makhteshim-Agan Industries Ltd.

1 Azrieli Centre
Tel Aviv,
Telephone: (+972 03) 694 79 77
Fax: (+972 03) 609 50 12
Web site:

Public Subsidiary
Incorporated: 1998
Employees: 3,015
Sales: $1.74 billion (2005)
Stock Exchanges: Tel Aviv
Ticker Symbol: MAIN
NAIC: 325320 Pesticide and Other Agricultural Chemical Manufacturing; 325181 Alkalies and Chlorine Manufacturing; 325192 Cyclic Crude and Intermediate Manufacturing; 325311 Nitrogenous Fertilizer Manufacturing; 325312 Phosphatic Fertilizer Manufacturing

Makhteshim-Agan Industries Ltd. (MAIN) is one of the world's ten largest crop protection companies (ranking seventh in 2005), and is also the world's leading producer of generic herbicides, fungicides, pesticides, and related products. The company also produces plant growth regulators, and other crop protection chemicals, and has also extended its chemicals synthesis capacity to the production of aroma chemicals, antioxidants, and other fine chemicals, such as optical brighteners for detergents and additives for explosives. Formed by the merger of Makhteshim with its subsidiary Agan in 1998, MAIN has long specialized in the production of chemicals no longer protected by their patents. Into the middle of the first decade of the 2000s, however, MAIN has been building up its own portfolio of chemicals. As part of this effort, MAIN has completed a steady stream of acquisitions, buying products from Syngenta, Bayer, and Aventis, among others. The company has also been expanding its international network, with purchases including the United States' Farmsaver, Alligare, and Control Solutions; Hungary's Biomark; Kollant, of Italy; and Farmoz, in Australia, accompanied by the creation of new distribution subsidiaries in Russia and the Czech Republic. MAIN's primary production facilities are located in Israel and in Brazil (under subsidiary Mienia-Agro Ciencias), with additional facilities in Spain, Greece, and Colombia. International sales represent more than 90 percent of MAIN's revenues, which topped $1.74 billion in 2005. MAIN is listed on the Tel Aviv Stock Exchange. Koor Industries remains its largest shareholder, with 41.3 percent of the company's stock. Avraham Bigger was confirmed as the company's new chairman in January 2007.


Israel's chemicals industry had its roots in the efforts by the Zionist movement to found an independent state in the early years of the 20th century. German and other European scientists formed an important backbone of this effort, providing much of the foundation and direction to the various scientific and academic initiatives in pre-Israel Palestine. Europe's extensive coal resources had provided not only the continent's primary source of power, but also a major source of raw materials for the scientific community, and in turn played a predominant role in determining the major currents of scientific research. Israel, however, was almost completely lacking in coal and other carbon-based natural resources. For this reason, the scientists arriving in the region, both as part of the Zionist immigration movement in the 1920s and as refugees from the increasingly murderous German government in the 1930s, focused their research in the areas of biochemistry and inorganic chemistry. Another reason behind this focus was a desire to support the Zionist aim of developing the future Israeli state's agricultural independence.

The strength of this scientific community led not only to successes in the research arena, it also provided the basis for the development of a true chemicals industry. The exploitation of the vast mineral resources in the Dead Sea, launched in the late 1920s by the Palestine Potash Co. (later Dead Sea Works), provided an initial source of raw materials. The large amounts of potash and related minerals in turn supported the growth of the region's agricultural chemicals industry.

The end of World War II left the soon-to-become Israel's academic and scientific communities with few financial resources. While the Israeli universities and research institutes were to receive funding from overseasincluding payment for aiding the British war effortthe creation of a commercially viable chemicals industry became of vital concern. One of the earliest of the new era of Israeli chemicals companies was created in 1945, as a cooperative effort of a number of scientists, researchers, chemical engineers, and chemists. That company was named Agan and launched production at a site in Jerusalem in 1945.

Following the loss of Jerusalem during Israel's War of Independence, Agan was forced to move its production to Tel Aviv. Over the next two decades, Agan developed a range of products, primarily targeting the crop protection market, including its own herbicides and plant growth regulators. The intensive effort to develop Israel's agricultural industry, as well as the country's extensive reforestation program, provided a strong market for Agan and other entrants into the country's chemicals industry. In 1968, Agan opened its capital to a new group of both Israeli and international investors; with this funding the company relocated its main production facility and headquarters to the seaport of Ashdod in 1972.

In the meantime, the country's agricultural chemicals industry had seen the emergence of another major player, Makhteshim Chemical Works Ltd. That company had been founded in 1952 specifically to develop crop protection products for the country's agricultural community. By 1953, Makhteshim had launched production at its main facility, in Beer Sheva, in the Negev Desert. Makhteshim grew quickly through that decade and into the 1960s, developing a strong list of active ingredients. The company's product range included crop protection products such as herbicides, fungicides, and insecticides.


Makhteshim was acquired by Koor Industries, Israel's leading corporation, in 1963. The backing of its powerful parent company enabled the company to grow strongly through that decade. Aiding Makhteshim's, and Agan's, growth during this period was Israel's victory in the Seven-Day War, which placed a vast new area of arable land at the disposal of the country's agricultural efforts. Although still a relatively small chemicals company by the end of that decade, Makhteshim targeted further expansion, with the goal of becoming an internationally competitive group. Unable to develop trade in its immediate Middle East region due to the embargo imposed by most of the Arab world following the Seven-Day War, Makhteshim targeted growth into the European and North American chemicals markets.


Makhteshim-Agan Industries Ltd., a subsidiary of Koor Industries, is the world's leading generic manufacturer and distributor of crop protection products. The group ranks amongst the world's largest manufacturers of crop protection chemicals, with a wide range of advanced, environmentally friendly products. Makhteshim-Agan sells its crop protection products in over 100 countries, with its strategically located subsidiaries, competes successfully with the leading industry multinationals. Our product range includes herbicides, insecticides and fungicides, as well as other crop protection chemicals and plant growth regulators. We also use our chemical synthesis capabilities to develop other products such as antioxidants, aroma chemicals and other fine chemicals. The group has production and formulation facilities in Israel and Brazil, with additional formulation facilities in Colombia, Spain and Greece.

As part of this effort, Makhteshim reached an agreement to acquire a 50 percent stake in Israeli rival Agan. The remaining shares of Agan were divided among the company's founders and the group of investors that had joined the company in 1968. As part of the purchase, Makhteshim and Agan launched a new era of cooperation, agreeing to divide their chemicals activities. As a result, Makhteshim became responsible for the production of insecticides and fungicides, while Agan's agrochemical production centered on herbicides and agaricides. An important focus for both companies, especially from the 1970s, was the market for generic crop protection products.

Environmental concerns, as well as safety concerns for the growing population around Israel's main chemical sites, led to the creation of a new industrial zone for the country's chemicals industry in Ramat Hovav in the early 1970s. In 1974, Makhteshim moved to transfer its own production to Ramat Hovav, which was situated some 15 kilometers from the original Beer Sheva plant. The move also provided Makhteshim with the opportunity to modernize its production, adding new automated production capacity. The modernization of its production also played a role in the company's new strategy to develop itself on the international market, in part through a move into the specialty chemicals sector. For this, the company targeted the development and production of a number of high-margin complex chemicals, that could be produced in relatively small quantities. This effort, launched in earnest in the mid-1970s, included a variety of intermediates and additives for use in the defense industry, flame retardant additives used in plastics manufacture, chemicals for the pharmaceuticals industry, specialty chemicals for the photography and printing industries, as well as chemicals for the development of x-rays.

The relationship between Makhteshim and Agan strengthened through the 1980s. Agan completed a public offering in 1982, listing its stock on the Tel Aviv Stock Exchange, a move that left Koor Industries, through Makhteshim, as its major shareholder. The public offering, which raised $16 million at the time, floated 22.5 percent of Agan's stock, but only 15.5 percent of its voting rights.

Following the public offering, Agan too sought new product horizons. The company entered the production of aroma chemicals in the mid-1980s, launching the development of a number of chemicals for the detergents and cosmetics industries. By 1987, the company had succeeded in creating its first products, which later grew to include such chemicals as Amberonne (woody amber), the synthetic musks Ganolid and Musk 50, the "green floral" scent Heliogan, and synthetic Methyl Atrarate, found in oakmoss.


Makhteshim completed its own public offering in 1992, reducing Koor Industries' stake below 70 percent. The offering enabled the company to again strengthen its ties with Agan. Increasingly, the two companies had begun to cooperate on a variety of levels, including joining their marketing and sales efforts, especially for the export market. This market was by far the most important for both companies, representing more than 75 percent of Makhteshim's revenues, and more than 90 percent of Agan's total sales.


Agan Chemical Manufacturers is founded as a cooperative in Jerusalem, then moves to Tel Aviv following the war of 1948.
Makhteshim Chemical Works is founded in Beer Sheva.
Koor Industries acquires Makhteshim.
Makhteshim acquires 50 percent stake in Agan; the two companies begin crop protection cooperation agreement.
Agan goes public on the Tel Aviv Stock Exchange.
Makhteshim goes public.
Makhteshim and Agan acquire 49 percent of Herbitechnica in Brazil as part of drive to establish international distribution network.
Makhteshim and Agan merge to from Makhteshim-Agan Industries (MAIN), the world's largest producer of generic crop protection chemicals.
MAIN acquires a number of chemicals from Syngenta as part of effort to develop portfolio of proprietary chemicals.
Company acquires Feinchemie Schwebda, in Germany.
Company expands into North America with purchases of Control Solutions and Rice Co.
MAIN boosts eastern and central European presence with purchase of Agrovita in Czech Republic; announces plans to establish operations in China.

The two companies had also sought to become partners in the creation of a number of international joint ventures. In 1993, Makhteshim and Agan joined together to create a water-based paint joint venture with the United States' United Coatings. That venture, called Prisma Paint Industries, began manufacturing and marketing a line of Prisma-branded paint for the Israeli market in 1994. Yet the Prisma venture failed to find success and in 1997 became slated for disposal.

By then, the combined forces of Makhteshim and Agan already represented the world's largest production capacity of generic crop protection chemicals and products. As part of its growth strategy for the approaching new millennium, the company had targeted in particular the South American market, and especially Brazil, the region's most vibrant agricultural market. In order to boost its marketing presence in the region, Makhteshim and Agan joined together again to purchase a 49 percent stake in Herbitechnica, a leading pesticides company based in Brazil.

The Herbitechnica acquisition became part of a broader effort to acquire local positions in a number of key foreign markets in the late 1990s and into the 2000s. The two companies completed several more joint acquisitions into 1998, including those of Dafenpar, also in Brazil; Aragonesas, based in Spain; and Argentina's Magan, completed in 1997. By the end of the decade, the company added operations in Greece and Colombia as well.

In 1998, Makhteshim and Agan merged their operations in a larger restructuring determined to reposition the company as a leading competitor in the global agrochem market. The company, called Makhteshim-Agan Industries (MAIN), set out to continue its expansion, and particularly through stepping up its acquisition program. For this effort, MAIN sought acquisitions in two areas. On the one hand, the company targeted the purchases of existing chemicals and products, with a plan to expand its range of proprietary products to 20 percent of its total sales. In 2000, for example, the company acquired several products from Syngenta, including a herbicide, an insecticide, and a fungicide.

The company added Aventis's guazatine insecticide as well as its clofentezine fungicide in 2001. In that year, also, Syngenta agreed to sell the company its Novartis cereal fungicide business. The following year, MAIN added edosulfan, an insecticide sold under the Thiodan brand name by FMC, which MAIN planned to market as Thionex. The company also acquired several pesticides from Bayer in 2002, including Goltix, a sugar-beet herbicide, and the European sales for its Gusathion insecticide. As part of the purchase agreement, MAIN also acquired marketing licenses for a number of other Bayer chemicals.

In addition to these acquisitions, the company had also launched a new subsidiary, LycoRed Natural Products, in order to produce and market a lycophene-based coloring agent developed by the company, in 2005. Also that year, the company set up a dedicated production facility for another of its in-house developed chemicals, Rimon, a novaluron-based insecticide.

The second area of MAIN's acquisition strategy involved the continued extension of the company's international sales and marketing network. The company strengthened its European presence with the purchase of Germany's Feinchemie Schwebda. That company, a formulator and distributor of generic pesticides, provided a sales network throughout Europe, as well as a strong presence in the German market.

MAIN then turned to the North American market, buying up majority stakes in Control Solutions and RiceCo in the United States in 2004, followed by a 30 percent share of Alabama herbicides producer Alligare in 2006. The company added an Australian distributor, Farmoz, in 2004, then moved into Holland and Hungary in 2005. In 2006, the company boosted its European presence again with the purchase of 60 percent of pesticides manufacturer Kollant, based in Italy. The company also announced plans to enter the Chinese market, with plans to establish a new subsidiary there. By the end of 2006, MAIN had taken another step in its goal to build its position in the central and eastern European market, acquiring 75 percent of pesticides producer and distributor Agrovita, in the Czech Republic. With revenues topping $1.74 billion, MAIN had successfully positioned itself as a major agrochemicals group in an increasingly global market in the first decade of the 2000s.

M. L. Cohen


Agan Chemical Manufacturers Ltd.; Alfa Agricultural Supplies S.A. (Greece); Aragonesas Agro S.A. (Spain); BIOMARK (Hungary); Farmoz Pty Ltd. (Australia); Farmsaver LLC (U.S.A.); Feinchemie Schwebda GmbH (Germany); Kollant s.p.a. (Italy); Luxembourg Pharmaceuticals Ltd.; LycoRed Natural Products Industries Ltd.; MAGAN Argentina S.A.; MAGAN Korea Co. Ltd.; Makhteshim Chemical Works Ltd.; Makhteshim-Agan Japan K.K.; Milenia Agro Ciencias SA. (Brazil); Prizma Industries Ltd.; Proficol Andina Sucursal Colombia SA.; Proficol SA (Colombia); RiceCo, LLC (U.S.A.).


Syngenta International AG; Monsanto Co.; Aventis; BASF AG; Bayer AG; Dow AgroSciences LLC; DuPont; Sumitomo Chemicals; FMC Corp; Rohm & Haas Co.


Hume, Claudia, "Syngenta Sells More Lines to Makhteshim," Chemical Week, January 31, 2001.

"Koor May Float Makhteshim Stake in London," Chemical Week, September 24, 2003.

"Makhteshim Agan Acquires German Distributor," Chemical Week, May 15, 2002.

"Makhteshim Agan Agrochemical Group Buys 75% of Czech Pesticides Distributor Agrovita," Czech Business News, November 15, 2006.

"Makhteshim Agan Is Growing Again," Israel Business Today, August 1, 2000.

"Makhteshim Agan Opens Unit Specializing in Rimon Production," Chemical Business Newsbase, October 24, 2005.

"Makhteshim Agan to Acquire US Co for $44m," Israel Business Arena, April 14, 2004.

"Makhteshim Forms Company in China," Chemical Week, February 8, 2006.

"Taking the 'Chemical' out of Agrochemical," Viva Press, January 1, 2006.

Young, Ian, "Makhteshim-Agan Makes Two Acquisitions," Chemical Week, May 17, 2006.