Alliance would make for fierce competition
China: Sinochem and Monsanto in talks
Liu confirmed that Sinochem's seed division, China National Seed Group Co Ltd, is discussing cooperation with Monsanto, but declined to elaborate further, and it remains unclear what form the cooperation will take.
Analysts said that if the companies combined their respective strengths, they could reshape China's vegetable market, which has long been dominated by multinational companies, and put fresh pressure on the nation's smaller seed companies.
The highly segmented Chinese seed market has more than 8,000 domestic companies, most of which have limited research and development capability. Industry analysts estimate the value of the country's vegetable seed market to be more than 8 billion yuan ($1.25 billion) a year.
Active multinational players in the Chinese market, including Switzerland's Syngenta AG, Rijk Zwaan of the Netherlands and Israel's Hazera Genetics Ltd, had a combined market share of more than 15 percent by the end of 2011, according to data from the Ministry of Agriculture. That figure represents a formidable dominance in the nation's market, analysts said.
"Market competition among foreign companies will become fiercer if CNSGC and Monsanto join the game together," said Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant Ltd, one of the largest consultancies in the industry.
Monsanto has long expressed an intention to extract more profits from the Chinese market. In 2010, the company's global sales declined 10.4 percent year-on-year to $10.5 billion, according to its statistics. The Chinese market contributed less than 1 percent to the global total, the company said.
Source: www.chinadaily.com.cn
