GENTECH archive


B-GE: Monsanto says cuts Ukraine business (fwd)

Wednesday June 9, 2:47 pm Eastern Time

INTERVIEW-U.S. Monsanto says cuts
Ukraine business

By Pavel Polityuk

CHUBYNSKE, Ukraine, June 9 (Reuters) - U.S. agricultural group
Monsanto (NYSE:MTC - news), frustrated by Ukraine's slow reforms and
debts by local consumers, said on Wednesday it would reduce its presence
in the country.

``We are winding up some kinds of our businesses activity here,'' Vladimir
Vasiliev, Monsanto's coordinator of
projects and business development in Ukraine, told Reuters.

The company, based in St Louis, Missouri, has been working in the ex-Soviet
state since 1988, covering 15-20 percent
of the domestic needs in herbicides.

But Vasiliev said the debts of local consumers worth ``tens of millions of
dollars'' were the main obstacle to developing
the company's business in the country of 50 million people.

Vasiliev, who declined to give concrete figures, said Monsanto had cut its
sales in Ukraine by some 30 percent so far
this year. ``We have no plans to increase supplies until new landlords
replace Soviet-era farm managers,'' he said.

The company is frustrated by the absence of private land ownership in a
system where agriculture is still dominated by
low-productivity cash-short Soviet-era collective farms.

The country's fertile land cannot be used as collateral for bank loans.

Vasiliev said Monsanto's future activity in Ukraine would depend on the
outcome of the presidential election set for
October 31 this year.

Analysts say that President Leonid Kuchma, regarded as a moderate reformer,
is likely to face a strong challenge from
a leftist candidate.

Monsanto is not the only Western company whose agricultural business has
been affected by slow reforms in Ukraine.

A government official told journalists last week that several Western
producers of chemicals had plans to stop or
reduce their business activity in Ukraine due to debts by local farms worth
a total of $215 million for last year alone.

Ukraine does not produce enough chemicals of its own for crop protection.

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