Syngenta sales rise as focus shifts from soy to corn
firm's corn business offsetting a decline in soybean sales.
The Switzerland-based agricultural company last week reported a 9 per cent increase in sales for the year-to-date period to $5.7bn (€4.1bn) from $5.2bn (€3.8bn). The firm's seeds business saw a 7 per cent sales increase to $1.4bn (€1bn) from $1.3bn (€962m) in the six-month period, pushing up lower second-quarter sales, which saw only marginal growth of one per cent to reach $478m (€348m). Indeed, in the second quarter, Syngenta's corn and soybean sales fell 16 per cent to $175m (€127m), although overall half-year sales for the segment grew 3 per cent to reach $732m (€533m). According to the company, an unprecedented shift in US acreage from soybean to corn was reflected in the firm's sales. Syngetna said growth in corn sales reflected the major shift in US acreage but was partially offset by a sharp decline in soybean sales in the second quarter. High corn prices also led to increased acreage outside the USA. Syngenta said it is transforming its US corn portfolio from a conventional to a fully traited offer. "The market for corn biotechnology is expanding rapidly and Syngenta plans to increase R&D investment further to capture all opportunities; in the short term, this transition and the associated R&D investment mean that corn is less profitable than soybean," it said. Moves in the business segment during the first half of the fiscal year included an expansion in the firm's Chinese corn business through the acquisition of a 49 percent stake in SanBei, a leading Chinese corn seeds company. It also announced a five-year research collaboration with the Institute of Genetics and Developmental Biology, focusing on novel agronomic traits in key crops including corn, soybean, sugar beet and sugar cane. In July the company also announced the acquisition of Zeraim Gedera, an Israeli vegetable seeds company focusing on high value crops. Syngenta expects the transaction to close in the fourth quarter of 2007. "Looking further ahead, the role of agriculture in addressing a number of the world's major challenges, including population growth, food and biofuel demand, is becoming increasingly important and Syngenta is uniquely positioned to help address these challenges," said the firm's chief executive officer Michael Pragnell. "Our ability to innovate, our technological breadth and global reach mean we are well placed to capture the numerous opportunities, continue to drive growth and further increase shareholder value."