Trusted Market and Commodities-Trade Intelligence
On 20 March 2018, Yuan Longping High-Tech Agriculture Co., Ltd. (Longping High-Tech) announced its signing of an Initiators’ Agreement on Xianlong Biotechnology Co., Ltd. with China National Agrochemical Co., Ltd. under China National Chemical Corporation (ChemChina) in Changsha City, Hunan Province. They agreed to make joint investments to establish Xianlong Biotechnology Co., Ltd., of which ChemChina will invest USD7.9 million, making up 50% of the shares and Longping High-Tech USD7.9 million also, accounting for 50% of the shares.
The joint venture is expected to make integration of all their advantaged resources, carry out development, production, marketing and sales of corn seeds in China and facilitate the domestic development of corn biotechnology and integration of future market. It is favourable for Longping High-Tech to complete its corn business layout and improve its corn innovation capability and business expansion ability.
“Syngenta, as a subsidiary of ChemChina, is well equipped with the world’s advanced corn seed technology,” stated Longping High-Tech, “The joint venture will help accelerate the introduction Syngenta’s corn seeds including genetically modified corn technology, and will contribute to our firm standing as a leader during the industry revolution. In addition, Beijing Lantron Seed Corporation (Beijing Lantron) which we plan to acquire is one of the most excellent teams in China regarding the corn variety improvement and localization. It will help reduce the length of time and improve the quality for the R&D of localization of corn varieties introduced by the joint venture.”
In 2018, Longping High-Tech may make beyond-expectation achievements in the corn business, in addition to its high growths in rice business. This is mainly because:
l Self-owned corn varieties: Last year, 2017, saw their excellent resistance to high temperature; this year, 2018, may witness high growths in both revenue and profit from this segment, based on the market recovery.
l New varieties: The company has sufficient reserves of high quality varieties such as Nongda 372 and other new varieties passing examinations.
l Domestic integration: Beijing Lantron which is to be acquired by the company will realize the maximum “synergistic effect” with the company in varieties and R&D, and will help speed up the launch of new corn varieties
l Foreign business activities: The company may acquire more shares of Dow AgroSciences’ corn seed business where the company has already been a participator for acquisition.