Why is ChinaChem coveting Syngenta, which had spurned Monsanto’s overtures for merger six months ago? Indian Express’s Rural Affairs Editor Harish Damodaran has put the all-cash $43 billion bid for the Swiss seeds and agrochemicals company in perspective in the paper’s 11 February edition. He makes the following points:
- It is the importance China is attaching to genetically modified (GM) crops to shore up its food security.
- President Xi Jinping had made a speech in 2014 where he had said, ‘[W]e must boldly research and innovate, dominate the high points of GMO techniques and [we] cannot let foreign companies dominate the GMO market.
- Syngenta is strong in GM corn, GM soybean and GM wheat.
- Recently, China renewed permission to two state research institutes to carry out bio-safety trails on rice genetically-altered to resist stem borers and on maize genetically tweaked for better phosphorous absorption.
- Two years back, China National Cereals, Oils and Foodstuffs Corporation (Cofco) had acquired 51 percent equity in Noble Agri and Nidera, which are global players in commodity trading and processing.
- China has more farming households than India but their holdings are smaller. China wants to make its agriculture, which is more productive than India’s, yet more productive with tools like agri-biotechnology.
- Syngenta’s seeds and genomics business earned revenue of $3.16 billion in 2014, which was the third highest after that of Monsanto and DuPont. If revenue from agrochemicals were added, it would be the third largest after Monsanto and DuPont+Dow Chemicals combined.
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(Top Photo: Syngenta headquarters in Basel courtesy of www.wikimedia.org)