Beijing, China and St. Louis,
Missouri
August 21, 2008
Agreement will combine
strengths of China Seed's and Monsanto's corn seed businesses to
deliver higher yielding corn seed hybrids to Chinese farmers.
Monsanto Company (NYSE:
MON), a global agricultural company, and
China National Seed Group
Corporation (CNSGC) have entered into an agreement to expand
their investments in the companies' existing Chinese joint
venture company. The agreement is subject to approval by Chinese
government authorities.
"We are very pleased to announce the signing of an agreement
that will greatly strengthen our collaboration with Monsanto,"
said Zhang Zhiyin, vice president of
Sinochem Corporation,
parent of CNSGC. "China Seed is dedicated to delivering the
highest yielding seed to Chinese farmers and we believe a
broader joint venture with Monsanto will enable our business to
expand our offerings to Chinese farmers."
"We are pleased to increase our collaboration with China Seed to
deliver elite corn hybrids to farmers within the world's
second-largest corn-growing region," said Brett Begemann,
executive vice president of Monsanto. "This investment signals a
new strategic emphasis for our business in China and a new
growth opportunity for our international corn seed business. We
are excited about the potential that our combined efforts can
have in improving farm productivity, increasing farmer incomes
and helping Chinese farmers to meet both China's and the world's
growing demand for grain."
This agreement between China Seed, a wholly-owned subsidiary of
Sinochem Corporation, and Monsanto Far East Limited, a
wholly-owned subsidiary of Monsanto Company, will increase their
investment in CNSGC-DEKALB Seed Company Ltd. ("CNDK"), an
existing joint venture company formed in 2001. The investments
will enable CNDK to expand its existing corn seed business, by
combining CNDK's business operations with the corn seed business
of China Seed and providing CNDK access to elite corn seed
hybrids developed by Monsanto and China Seed.
China is the world's second largest corn growing region. Chinese
farmers annually plant approximately 27 million hectares, or 67
million acres, to the crop. Once approved by Chinese Government
authorities, the joint venture is expected to enable China Seed
to expand its product offerings to local farmers across all four
corn-growing areas, well beyond the tropical region where the
company currently operates.
Under the agreement, China Seed will contribute its existing
corn seed business assets and Monsanto will contribute 575
million RMB (approximately $84 million US) to the joint venture.
China Seed will continue to hold a fifty-one percent ownership
interest in CNDK while Monsanto will continue to hold a 49
percent ownership interest in the joint venture. Additional
details of the agreement have not been disclosed at this time.
China Seed,
which is recognized as a leading enterprise within the
agricultural industry in China, was first established in 1978.
The seed business has been awarded twice the No. 1 ranking among
the top fifty seed companies in China. China Seed became a
wholly-owned subsidiary of Sinochem Corporation in June 2007.
Today, the company focuses on the development of three key crop
businesses: corn, rice and vegetables.
Monsanto Company (NYSE: MON) is a leading global provider of
technology- based solutions and agricultural products that
improve farm productivity and food quality. Monsanto remains
focused on enabling both small-holder and large-scale farmers to
produce more from their land while conserving more of our
world's natural resources such as water and energy.
Other news
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