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7-Business: Monsanto takes GM crusade to Brazil

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TITLE:  Monsanto takes GM crusade to Brazil
SOURCE: The Financial Times, UK, by Caroline Daniel
DATE:   Feb 5, 2003

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Monsanto takes GM crusade to Brazil

Monsanto's interim chief executive will go to Brazil in early March to
try to persuade the government of the benefits of genetically modified
(GM) crops in its campaign against hunger.

The company, which has the biggest stake of any agricultural company in
biotechnology, has been seeking approval for its RoundUp Ready soyabeans
in Brazil for some time. Although Monsanto received initial approval in
1998, progress since then has been stalled by the Brazilian courts. Last
year one judge ruled in favour of acceptance, but the other two judges
have failed to issue an opinion.

"Brazil is very key for us," said Frank AtLee, chairman and interim chief
executive. "The new government has talked about being opposed to biotech.
However, it has a major interest in feeding the hungry people of the
country. This is a very dynamic situation. We are working very hard with
the government to demonstrate our products can help them."

His visit to Brazil comes as President Luiz Inácio Lula da Silva last
week launched an ambitious campaign to eradicate famine. However, US
government efforts to help Africa tackle its famine with free GM food
have so far been resisted.

Mr AtLee said Monsanto has not included any biotech revenues in its
numbers for Brazil this year. He was also sceptical about progress in
Europe. "My view is the authorities tell us they want to get the process
started, but very little happens. So now we have the US government
looking at a WTO suit - yet food companies in Europe are trying to get
traceability and labelling which we think is not right. So we have a real
political quagmire to go through in Europe."

The problems with biotech acceptance come amid declining sales for
Monsanto's traditional RoundUp herbicide, its flagship product. Sales of
RoundUp, which has come off patent in the US, and other non-selective
herbicide products fell 24 per cent in 2002 to $1.8bn.

Total 2002 sales fell 14 per cent to $4.7bn. Net losses were $1.7bn, or
$6.45 per share, against net income of $295m, or $1.12 per share. The
2002 results included a loss of $6.94 per share for a goodwill impairment.

However, sales of genetic traits and seeds in the fourth quarter helped
Monsanto deliver net income of $61m against a net loss of $104m.

In December Hendrik Verfaillie, chief executive, resigned, amid concern
about performance over the past two years, which included two profit
warnings. Monsanto said the search for a replacement would take a further
four to six months. Hugh Grant, chief operating officer, is one of the

Mr Grant said Monsanto had lost share in the US for RoundUp to
international rivals, such as Syngenta. "We saw Syngenta end the year
with 7-10 per cent market share, with some fairly aggressive pricing".

Monsanto shares lost 3.7 per cent to close at $17.00 in New York.