Dear Shareholders,

Completing three years in which I served as both Chairman and CEO of Makhteshim Agan, I look back with a sense of accomplishment at what the group has achieved in strengthening its leadership position as the foremost provider of
off-patent crop protection solutions in the market.

Leveraging on the strong fundamentals prevalent in the industry, we were able to create a platform that has allowed us to excel. We expanded our global footprint significantly, entering new markets, establishing new subsidiaries and engaging in strategic M&A activities that extended our sales reach and improved our distribution efficiencies. We expanded production capacity by realigning our manufacturing strategy and continued to grow and broaden our portfolio of active ingredients, products and registrations. Makhteshim Agan streamlined its organizational structure, transforming itself from a holding company to an integrated global operation with a strong centralized management. Over this three year period, we strengthened the balance sheet, distributed dividends and continued to invest in working capital, environmental compliance and growing the business in a disciplined manner.

Still, there is much more to be done.

2009 was a challenging year for the industry and for MAI. Once again, we were reminded of the profound impact that weather conditions have on the agricultural supply chain. Moreover, the economic storm that raged across the globe was not particularly kind to the industry; credit and business challenges hurt farmers everywhere.

Makhteshim Agan was not immune to the forces impacting the market. Our sales and gross margin suffered, with our Brazilian operation taking the hardest hit. Despite the downturn, we were still able to capture new markets and sign important strategic agreements that position us favorably for the future. During the second half of the year, we began to see several signs of improvement and remain optimistic as we enter 2010. We have used this period wisely, continuing to fortify our global corporate capabilities across all mission critical parameters, from supply chain management to production and marketing footprint.

Finally, I would like to thank the wonderful, committed and professional employees that are an integral part of this organization. As I turn the helm over to my successor, Erez Vigodman, I leave the Group in very capable hands and believe that we are well positioned to excel in the years ahead. I wish him the best success in continuing to steer Makhteshim Agan confidently forward and look forward to working with him closely in my continuing capacity as Chairman.
 

Avraham Bigger
Chairman