Monsanto takes GM crusade to Brazil
Thursday February 6, 6:10 am ET
By Caroline Daniel in Chicago
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 candidates.
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.