Sumitomo Chemical Co., Ltd. and Abbott Laboratories today announced that they have reached agreement on Sumitomo’s acquisition of Abbott’s agricultural business.

The operations encompass 164 employees with net sales valued at US$103 million in 1998. U.S.-based Abbott, headquartered near Chicago, Illinois, employs 56,000 people and generated net sales worth US$12.5 billion (about ¥1,375 billion) last year.

Abbott's plant protection products consist mainly of biological pesticides and plant growth regulators that can be used for agricultural products. The product line meshes well with Sumitomo Chemical's strategy to expand its spectrum of products for organic agriculture. Although Abbott’s biological pesticide operations have been moderately profitable, Abbott has decided to divest its agricultural operations and concentrate on its core healthcare businesses.

The acquisition will enable Sumitomo Chemical to substantially expand its portfolio of plant protection products for organic farming. Promising new compounds that Abbott is developing should contribute significant growth to Sumitomo's organic farming-related businesses in the future. Moreover, Abbott's marketing bases in the NAFTA countries, South America, Western Europe and Oceania will enable Sumitomo Chemical to expand and strengthen its marketing and development operations in the agricultural industry in such countries. In addition, other superior new fermentation-based products of Abbott will enable Sumitomo Chemical to augment and expand its position in the public hygiene sector, where the Company intends to remain active.

Sumitomo Chemical has been expanding its plant protection business by establishing operational bases for research, development and marketing around the world, starting with setting up Valent in U.S.A. in 1988, Philagro in France, KenoGard in Spain as well as development and marketing strongholds in Taiwan, Australia, China and South Africa.

At the same time, in response to the growing preference for organically produced crops and food among consumers worldwide, Sumitomo Chemical has been developing plant protection products and pest control methods suitable for organic farming, besides synthesized agricultural chemicals.

Recent examples include a non-spray pest control with the use of a plastic tape containing an insect growth regulator, launched last year, and beneficial insects to control highly resistant pests, which will be available for commercial use in the near future.