Expect a surge in seed business expansion and seed coating developments from farm chemical and plant genetics giant, Syngenta, following its recent takeover by the Chinese.
China’s close interest in Australia as a food source and farmland investment target is also likely to keep Syngenta management closely attuned to local farm sector export growth options.
“China is already an important market for Australian farmers, in fact it’s the world’s biggest agricultural goods importer,” says the Swiss-based global agribusiness’ chief executive officer, Erik Fyrwald.
“With our Chinese ownership we want to be a bridge to further nurture that export market.”
Syngenta is the world’s biggest crop protection product maker and number three in the seeds business.
It has total annual sales exceeding $57 billion ($US43b) a year.
Within China itself, the company also sees vast business growth potential.
There’s a lot of (Chinese) affinity with this country, including within ChemChina where I’ve met people who went to school here
It is already the leading crop protection player in the Chinese market, but has just a six per cent share of total crop chemical sales.
Syngenta is eyeing potential seed business acquisitions and related growth opportunities in plant genetics in China.
However, Mr Fyrwald said any North Asia expansion effort would not be at the expense of the company’s research and market development activity in the mature, but variable, Australian agriculture sector.
“I think you will see us doing more, not less in Australia, as part of our global research and development effort,” he said while in Sydney for this month’s Syngenta Growth Awards.
That local commitment is soon to include a joint venture “seed care institute” to research products and coating techniques and demonstrate best practice opportunities to farmers and supply channel operators.
“I wouldn’t be here if Australia was not important and if we didn’t think about the market needs and prospects here,” he said.
“Yes, there is a lot of seasonal variability in Australia, especially drought which creates challenges for the industry and Syngenta.
“But we’ve learnt to accept that, and Australia’s position as an agricultural exporter means it is looked at as an important part of our research and development effort.”
Mr Fyrwald said Syngenta’s mid-year $43 billion takeover by the industrial behemoth, ChemChina, gave the agribusiness the chance to nurture local agricultural development with an eye to better servicing Chinese (and other) export market requirements.
Australian farmers are sophisticated and well educated and adopt technology well to make the most of those opportunities
With plentiful land resources and important relationships with nearby Asia, he felt Australia had significantly more potential as an agricultural producer and exporter.
“The Chinese like Australia a lot, too – there’s a lot of affinity with this country, including within ChemChina where I’ve met people who went to school here,” he said.
“You see a lot of Chinese business activity and people who have made their home here. I think we all see lots of opportunities here.
“Australian farmers are sophisticated and well educated and adopt technology well to make the most of those opportunities.”
Seed sector ambitions
Seed care was one of those technology areas likely to attract increasing attention from Syngenta.
In the new year it will announce a partnership where laboratory-based seed coating research, and commercial and crop trials, will provide practical feedback on how to give emerging plants the best possible start towards reaching full yield potential.
Plant vigour achieved with help from seedling stage protection from pests and diseases also bolsters the plant against climatic shocks during the growing season.
Already a leader seed care, including providing much of the coating technology used to help Australian cottonseed achieve its world-beating potential, Syngenta has doubled the number of seed care institutes it operates worldwide to 12 in the past five years.
“A lot of seed used today is not coated at all,” Mr Fyrwald said.
“We see significant growth opportunities as more technology gives us new seed protection choices to help crops off to much better start and better productivity.”
Similarly Syngenta has made no secret of plans to expand its seed breeding and supply activities which generated $4b in sales last year.
Last month it bought the Latin American-based Nidera Seeds business, a prominent corn and soybean producer, from Chinese grains trader COFCO International.
In Australia Syngenta’s seed interests include an ownership stake in LongReach Plant Breeders, and barley marketing ties with Western Australian-based Intergrain.
“We’re committed to strengthening our leadership in crop protection and making acquisitions in the seeds sector, where we’re a distant third at the moment,” Mr Fyrwald said.
Syngenta recently just announced new international vegetable seed research facilities for the Netherlands to improve research, supply and support for customers.