UPL’s Step-Down Subsidiary Increases Investment in Brazil’s Origeo JV

UPL Ltd, a major player in the agrochemicals sector, announced on February 24, 2025, that its step-down subsidiary, UPL Global Ltd, UK, has injected an additional $53.85 million into Origeo Comercio de Produtos Agropecuarios S.A. (Origeo), a joint venture in Brazil. This investment is aimed at meeting Origeo’s working capital needs and ensuring its continued business expansion.

About Origeo and Its Role in the Agribusiness Sector

Origeo, established on July 29, 2021, operates as an integrated agricultural solutions provider in Brazil. It offers a range of services, including agricultural inputs, financing solutions, technical support, and advisory services for farmers. The joint venture is a collaboration between UPL and Bunge, a globally recognised agribusiness company, and plays a crucial role in advancing agricultural practices in the region.

Regulatory Aspects and Transaction Details

As per UPL’s regulatory filing, this transaction falls under related party investments due to its joint venture structure. The acquisition was executed via UPL Global and did not require any additional regulatory approvals. The move aligns with UPL’s broader strategy to strengthen its presence in the agribusiness sector and optimise its operations in key international markets.

Financial Performance and Market Response

The announcement comes at a time when UPL has returned to profitability after reporting a net loss in the same quarter last year. For the latest quarter, the company reported a net profit of ₹828 crore, a significant improvement from a ₹1,217 crore loss in the corresponding period of the previous year. This recovery was supported by lower finance costs and a reduction in the cost of materials consumed.

UPL’s revenue rose by 10% to ₹10,907 crore, driven by a 9% growth in volume and a 5% price increase. However, foreign exchange-related issues, particularly in Brazil, partially offset these gains. The company’s EBITDA surged to ₹2,162 crore from ₹416 crore in the previous year, with margins expanding from 4.2% to 19.8%.

Following the announcement, UPL’s share price saw a modest rise of 0.74% as of 11:05 AM on February 25, 2025.

Conclusion

UPL’s additional investment in Origeo highlights its commitment to strengthening its agribusiness footprint in Brazil. The move is expected to support Origeo’s operational growth while aligning with UPL’s long-term expansion strategy in key agricultural markets.

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