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Syngenta grows in wheat seed with Lantmannen deal

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Syngenta announced its second acquisition in European wheat seed in a little over two months as it purchased central European seed assets from Lantmannen, the Swedish co-operative giant.

Syngenta - the world's top agrichemicals group, and a major player in seeds too – said it had purchased for an undisclosed sum Lantmannen's German and Polish winter wheat and winter rapeseed businesses.

The deal follows Syngenta's announcement in April of the purchase of Italy's Società Produttori Sementi, the 103-year old producer for seed for durum wheat, the type used in making pasta.

The Swiss-based group said that today's deal would "complement" its portfolio "in two of Europe's most important crops" – Europe's wheat and rapeseed crops are, in the main, winter sown.

Germany is the EU's top grower of the oilseed, and second-ranked in winter wheat behind France, while Poland ranks fourth for wheat production and is challenging the UK for third-rank in rapeseed.

'High quality genetics'

Syngenta also said that the deal would supported its continued development of non-genetically modified cereals seeds for growers "worldwide".

The EU has also opposed genetically modified seed, and its importance in wheat, as the top producer, has been one reason given for the slow progress in GM wheat, with the grain's more complex genetic structure compared with corn another factor.

John Atkins, the Syngenta chief operating officer, said that the group would incorporate the "high quality genetics" at the Lantmannen operations "into our international breeding programmes, to develop seeds that offer significant productivity benefits to growers".

Furthermore, the deal would "reinforce" the group's positions in the "important" cereals and winter rapeseed markets in Germany and Poland.

Partnership strategy

For Lantmannen, which is owned by 32,000 Swedish farmers, the sale comes at a time of declining performance in its agriculture division, which suffered a 90% fall to SEK12m in operating profits for 2013, and reported a SEK53m loss for the first four months of 2014, compared with a SEK15m loss the year before.

Lantmannen eight years ago sold its seed operations in Canada and the UK.

And its chief executive, Per Olof Nyman, has stressed the importance of "partnerships with other companies and market players", with the group having entered joint ventures with, for example, Scandinavian Standard in China, and with CapVest over use of carbon dioxide manufactured as a byproduct of grain ethanol output.

The deal will give Lantmannen rights to distribute Syngenta winter wheat and rapeseed seed in its home Swedish market, besides set up a research and development "collaboration" in wheat.

Johan Andersson, the head of the co-operative's agriculture division, added that Lantmannen "will continue the breeding activities in Sweden and Holland in winter and spring wheat, spring barley, oats, triticale, spring oilseed rape, forage crops, willow and potatoes.

"Lantmännen will also continue to market seeds of these crops in Sweden as well as the international markets."

By Agrimoney.com

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