27 September 1996

Huge growth in biotech crops is now a reality…

By Robert Harris

SALES of genetically modified seed are expected to be worth £3.9bn in 10 years time. They will replace much conventional chemistry, and could be worth up to four times more than chemical sales by 2006.

Fears that labelling concerns and lack of consumer confidence could stall the sectors growth have been dismissed in North America (Arable, p72).

Maurice Delage, head of AgrEvos North America region, reckons the annual turnover from the companys herbicide resistant crops sold under the Liberty Link banner will be £451m by 2001-2.

Add on AgrEvos other genetically modified traits in the pipeline like hybrid seed, insect tolerance, disease resistance, better yield and quality and that figure could more than double, he says.

"In the next 10 years $1.5-2bn (£1-1.3bn) could be flowing from this technology." That compares with £3.2-3.9m from new conventional crop protection chemistry already in the company pipeline. "Its the emergence of a new crop production industry." To reflect that, AgrEvo now describes itself as a crop production not a crop protection company.

Monsantos UK product manager, Colin Merritt, also expects transformed crops to dramatically increase their contribution to turnover. "We certainly see a lot more business moving into biotech, rather than the traditional crop protection area.

"Whereas the latter has been 100% of turnover, we see it being closer to a 50:50 split in 10 years time, and swinging further into biotech after that."

The huge potential turnover represents a healthy return on investment. AgrEvo spends 12% of its current £2.3bn turnover on R&D, a third of which is dedicated to biotechnology.

AgrEvo also spent £354m last month for a 75% share of Amsterdam-based Plant Genetic Systems. Both companies collaborated to develop the Liberty Link project, and the buy-out gives AgrEvo direct access to other traits, notably genetically produced hybrid oilseed rape and corn (the former is already approved in Canada and showing a 20% yield advantage), and disease and insect resistance.

Mr Delage has little doubt that AgrEvos biotech investment is money well spent. By 2025, there will be four billion more mouths to feed on the planet, he says. Life expectancy is increasing, especially in third world countries, and a switch to animal protein consumption will accompany increasing affluence in those regions.

&#8226 Peter Mascia, plant biotechnology manager for Cargill in Illinois, reckons half of Cargills worldwide seed sales will be genetically modified in some form by 2006.


BIOTECH LIFT-OFF


&#8226 Liberty Link revenue worth $700m in 5-6 years.

&#8226 Other modified traits could more than double that figure.

&#8226 Biotech revenue to largely replace that from chemicals.

&#8226 Fifty % of Cargill seed sales genetically modified in 10 years.