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31 October 2007 – Issue 215
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CHINESE TO GO GLOBAL 3
IRISH COMPANY TO ACQUIRE ARYSTA 3
EUROPEAN NEWS AND MARKETS 5
FRENCH SUSPEND GM CULTIVATION 5
EU APPROVES STACKED CORN TRAITS 5
EUROPEAN PARLIAMENT VOTES ON PESTICIDE PROPOSALS 6
SYNGENTA TO REAPPLY FOR EU APPROVAL OF PARAQUAT 7
TWO CHINESE COMPANIES EXPELLED FROM EXHIBITION 7
SCIENTISTS TO BREED VIRUS RESISTANT BRASSICAS 7
AMERICAN NEWS AND MARKETS 8
BASF OPENS NEW LABORATORY IN BRAZIL 8
DEVGEN TO EXPAND US ACTIVITIES 8
ARYSTA RECEIVES COMMERCIAL APPROVAL FOR MIDAS IN THE US 8
SYNGENTA RECIEVES MEXICAN APPROVAL FOR AGRISURE 9
BASF PLANT SOLD TO AMERICAN VANGUARD 9
PUNJAB CHEMICALS ACQUIRES STAKE IN US COMPANY 9
XVI INTERNATIONAL PLANT PROTECTION CONGRESS 10
The future is agriculture and crop science will help 10
How safe is our food? Whom do you trust? 11
Farming at the sharp end with a blunt instrument 11
Silent Spring 12
NEW PRODUCTS 12
Orysastrobin - fungicide 12
Meptyldinocap - fungicide 12
Cyflumetofen - acaricide 12
Chlorantraniliprole - insecticide 13
Spirotetramat - insecticide 13
Metaflumizone- insecticide 13
CONGRESS SESSIONS 13
Changes in land use 13
Sociological and ethical issues associated with crop protection 14
Formulation and application technology for the future 15
Efficay of biological control 15
Crops for biofuel and bioenergy 16
OTHER NEWS AND MARKETS 18
BASF TO STEP UP ITS FIGHT AGAINST ILLEGAL PESTICIDES 18
MONSANTO REPORT RECORD SALES 18
SYNGENTA THIRD QUARTER SALES EXCEED FORECAST 19
SYNGENTA TO ESTABLISH CENTRE FOR BIOFUEL DEVELOPMENT 19
BOOK DISCOUNTS 19
CHINESE TO GO GLOBAL
It appears that the Chinese are making their first widely anticipated move into the global crop protection market. Australian-based Nufarm, has confirmed it has received a proposal from a Consortium comprising the China National Chemical Corporation, ChemChina, the Blackstone Group and Fox Paine Management. Nufarm’s Managing director Doug Rathbone had already acknowledged that his company might be a takeover or merger target when announcing Nufarm’s year-end results recently (September CPM). The Consortium wishes to acquire 100% of Nufarm shares and has made a revised bid of $17.25 per share after its earlier bid of $17.10 was rejected.
Nufarm has issued a statement on its website (www.nufarm.com) that it has thoroughly reviewed the proposal. It says that on the basis that the Consortium agrees to allow Nufarm to pay a $0.30 dividend per share to shareholders prior to the acquisition, it has unanimously resolved that it is recommending shareholders to vote in favour. This is, of course, subject to there being no superior offers. Several other pesticide companies and private equity groups are seen as potential suitors for Nufarm. Analysts have speculated that Makhteshim Agan and Monsanto would have the best fit with Nufarm. Other potential bidders named include buyout funds Bain Capital and Advantage Partners, which lost out in the recent sale of Arysta LifeScience Corporation.
Commenting on the current offer Nufarm’s chairman Mr Kerry Hoggard said: “We acknowledge the Consortium’s proposal which may lead to a transaction which realises fair value for Nufarm shareholders.” The proposal of $17.25 per share and a dividend of up to $0.30 per share values Nufarm’s market capitalisation at around $3.0 billion.
ChemChina is the largest state-owned, diversified chemical enterprise in China with a significant focus on agricultural chemicals through its ChemChina Agrochemical Corporation subsidiary, ChemChina Agchem. It was formed from the merger of two state-owned chemical giants -China National Blue Star Corporation and China Haohua Chemical Industrial Corporation. ChemChina Agchem is currently the largest producer of pesticides in China and is focused on growing its agrochemical enterprise, both domestically and through international acquisitions. It has already demonstrated a successful track record of acquiring and integrating leading international businesses into the ChemChina group including the Adisseo Group, Rhodia’s global silicones and sulphuric businesses and Qenos, Australia’s leading petrochemical company.
The transaction would combine Nufarm with certain agricultural chemical businesses of ChemChina to create the global leader in off-patent crop protection. The Consortium has proposed that the Nufarm management team continue to manage the combined operations of Nufarm and ChemChina, and has indicated that retaining senior management and preserving the Nufarm business culture is an important element of the transaction. The Consortium intends to maintain Nufarm’s corporate headquarters in Melbourne. The involvement of Blackstone and Fox Paine provides additional access to capital and the expertise to facilitate strategic growth through further acquisitions.
IRISH COMPANY TO ACQUIRE ARYSTA
The other big news is that the Irish-based Industrial Equity Investments Limited (IEIL), an international investment company, is to acquire Arysta LifeScience Corporation from Olympus Capital Holdings Asia for ¥ 250billion ($2.2billion). The private equity company Permira Funds has provided all the equity for IEIL's first investment in Japan. Completion of the transaction, which is subject to regulatory review and approvals, is anticipated to occur in the first quarter of 2008. Rumours that a number of companies were interested in purchasing Arysta were first reported last month (September CPM).
The sale brings to an end a five year investment by Olympus during which time Arysta has significantly expanded its global crop protection business through internal growth and acquisitions. Olympus Capital has helped Arysta LifeScience to acquire more than ¥ 50 billion of companies and products around the world enabling the business to achieve record revenues of ¥ 124 billion in 2006. Olympus partnered the existing owners Tomen Corporation and Nichimen Corporation in 2002 before buying out their stakes in the business. “As original partners with Tomen and Nichimen, we had the opportunity to bring in a number
of world-class executives into the company, both in Japan and to the global operations," said David Shen, managing director of Olympus Capital in Tokyo and an Arysta board member. "This management team has done a superb job of executing the business plan, and has more than doubled profitability. Arysta has developed into a leading global agrochemical company and we are very grateful for the tremendous effort of the Arysta management team and employees throughout its global operations."
Dr Christopher Richards, CEO of Arysta LifeScience, said: "Our continued success comes from a culture that focused on delivering innovative crop protection solutions that help our customers become more successful. Based on our strong product range and global reach, our employees have driven aggressive global growth through product development and strategic acquisition. Olympus Capital has provided consistent support for our growth over the last five years. We are now to look to the future with IEIL, who shares our vision and ambition to further accelerate our growth plans over the coming years."
EUROPEAN NEWS AND MARKETS
FRENCH SUSPEND GM CULTIVATION
President Nicolas Sarkozy has suspended the commercial cultivation of GM crops in France. The suspension will stay in force until a new body, which is expected to be created before the end of the year, has been able to review the subject. The French president justifies his decision on the basis of doubts about the value of biotech crops, their health and environmental benefits and the ability to manage their dissemination. His call for the creation of a new independent body shows some distrust in the scientific evidence accumulated to date, of the expert opinions from both the French Food Agency (AFSSA) and the European Food Safety Authority (EFSA) and of the European approval system generally. President Sarkozy stopped short of an outright ban on all GMs, which would have contravened EU agricultural rules, and stressed that his move does not call for a halt to biotech research.
The future of GM crops has long been the subject of heated debate in France with powerful farming lobbies and environmentalists at loggerheads. In the EU, the MON 810 corn variety, which is produced by Monsanto, is the only GM maize that has been approved for cultivation. SomeBildunterschrift: Großansicht des Bildes mit der Bildunterschrift: 1.5% of France's cultivated maize land was sown with this GM variety this year, a fivefold increase from only 0.3% in 2006. Some farmers have urged greater use of GM crops to boost yields and say that crop yields of biotech maize can increase up to 15% in areas of the highest corn borer pressure.
According to CropLife International, the suspension could damage the competitiveness of French farmers who have benefited from this technology for the past three years. It says that an exclusive CSA Institute survey for French maize growers shows that 52% are in favour of using the cultivation of biotech crops to safeguard the competitiveness of French farmers. Pascal Ferey, vice-president of SNSEA, a union which represents big industry agriculture interests in France, said that environmental groups are using scare tactics by misrepresenting the hazards of GM crops to the public, which are unfounded in his view. EuropaBio welcomes the reported remarks by EU Agriculture Commissioner Mariann Fischer Boel on the illegality of a ban on biotech crops in France. The EU Environment Commissioner Stavros Dimas has asked President Sarkozy to revoke his suspension of the commercial cultivation of biotech crops because it is contrary to European law.
Hungary, one of the EU-27 biggest grain producers, banned the planting of MON 810 seed in January 2005. Germany earlier this year decided that maize produced from MON 810 seeds could only be sold if there was an accompanying monitoring plan to research its effects on the environment. Austria has already been challenged by EU regulators to lift its bans on two GM maize types.
EU APPROVES STACKED CORN TRAITS
The European Commission has recently approved two biotech corn products for food, feed, import and processing jointly developed by DuPont and Dow AgroSciences. Corn products containing the Herculex RW Rootworm Protection trait and the Herculex I Insect Protection trait stacked with Roundup Ready Corn are now permitted for import into the EU. Both products comply with EU regulations, including the appropriate labelling and traceability of the products and their derivatives.
“Today’s approval is encouraging and we look forward to continued progress in the EU biotech approval process,” said Dean Oestreich, DuPont vice president and general manager and president of Pioneer Hi-Bred, a DuPont subsidiary. “We urge the Commission to ensure similar treatment for cultivation applications so that Europe’s farmers can enjoy the same benefits as millions of other farmers around the world.”
Herculex RW has been genetically modified with the Bt trait. The Herculex I, Roundup Ready Corn 2 stack was developed from traditional breeding methods of two genetically modified corn lines (1507 maize and NK603 maize) and contains no new genetic modifications. Herculex I and Roundup Ready Corn 2 were approved by the EU for food, feed, import and processing in March 2006 and March 2005, respectively.
The EU has also approved the import, processing and use of YieldGard Corn Borer (MON810), stacked with the Roundup Ready Corn 2 (NK603) trait, for food and feed use in the EU. Both traits were created and commercialised by Monsanto. For US growers, the significance of full EU approval means the Market Choices designation for these hybrid varieties and the existing grain channeling requirements will now be removed. The stacked traits have now achieved the same regulatory import status as single trait corn products such as Roundup Ready Corn 2 and YieldGard Rootworm, as well as Monsanto's Roundup Ready soybeans. The Market Choices programme, currently in place for growers, identifies those hybrids that are fully approved for food and feed use in key markets such as the US, Canada and Japan, but are still awaiting the necessary approvals in the EU. Growers who plant Market Choices hybrids must utilise designated delivery options for this grain such as feedlots, feed mills, and on-farm feeding, or work with grain handlers who agree to accept and channel the grain.
Monsanto says that growers who have adopted and planted YieldGard Plus, YieldGard Rootworm with Roundup Ready Corn 2, YieldGard VT Triple, YieldGard VT Rootworm/RR2 or YieldGard Plus stacked with Roundup Ready Corn 2 hybrids will still need to market the grain under the Market Choices programme until all remaining steps of the EU regulatory process are completed for these products. It adds that growers should also continue to work with their local seed dealers and grain handlers for specific stewardship and channeling/delivery requirements.
EUROPEAN PARLIAMENT VOTES ON PESTICIDE PROPOSALS
Tougher rules on pesticides and spraying are on the way, following a vote in the European Parliament. The Parliament voted on 23 October on two sets of proposals. The EU Thematic Strategy on Pesticides consists of two major bills - a regulation revising the existing directive 91/414 which governs the approval and marketing of pesticides, and a new directive on the sustainable use of pesticides which for the first time introduces EU legislation relating to the use of pesticides on farm.
MEPs supported many of the European Commission’s proposals - in particular that new pesticides should only be licenced for 10 years, or 15 years if they are low risk. They also backed a ban on active ingredients that are genotoxic, carcinogenic, reprotoxic or endocrine disruptors. Calls for a 25% reduction in all pesticide use over five year and 50% over 10 years were rejected. Instead, it will be left for each member state to set its own reduction target as part of a National Action Plan, if deemed necessary. Crucially, the European parliament also rejected the idea that farmers should be taxed on their pesticide use to help promote organic farming. The European Crop Protection Association (ECPA) welcomed the Parliament’s rejection of setting an arbitrary 10-metre buffer zone to all water courses. It said buffer zones are already adequately accounted for in the authorisation process of plant protection products.
This was the first reading in a co-decision procedure, which means that the European Parliament has equal powers with the Council of Ministers. Unless the Council accepts all amendments adopted by MEPs at the first reading, the proposals will return for a second reading at a later stage. There has been some indication that the legislation will be on the Council agenda for its November 26 meeting, although it has also been suggested that it will be January 2008 at the earliest before the legislation goes to Council. Even if agreement were reached this year, the new legislation would not take effect until late 2009 or early 2010.
ECPA is warning that up to 75% of current active ingredients and up to 90% of insecticides could be lost. The process of comparative assessment could further limit the number of active ingredients available for use in minor crops, particularly where active ingredients are approved in both major and minor crops. This will worsen when alternative substances become available for use in major crops but are not suitable for minor crops.