Joint venture gives Pioneer and Syngenta more marketing clout
Pioneer Hi-Bred International has long prided itself on its extensive collection of proprietary germplasm. That changed on Monday, when the DuPont-owned firm announced it will funnel a share of its propriety genetic material into a joint venture with Syngenta via GreenLeaf Genetics LLC, Omaha, Nebraska.
Why the move? Long story short, it gives both companies more marketing power to move more genetics and traits into the marketplace than they could by themselves.
"What has changed is the biotechnology pipeline is now maturing," says Dean Oestreich, president of Pioneer. "These important technologies need to driven broadly through the industry."
As part of the cross-license agreement, Syngenta receives a global license to the Optimum GAT trait, which is DuPont's glyphosate and ALS tolerant chemistry for corn and soybeans set to be unveiled in 2009. Syngenta will market this technology in conjunction with its Agrisure brand of traits.
Meanwhile, DuPont will receive a global license to Syngenta's insect resistance technology for European corn borer, corn rootworm and broad Lepidoptera control as it develops the next generation of insect traits.
Syngenta launched GreenLeaf Genetics in 2004 as a traits and genetics licensing business. In 2006, 3% of corn units sold contained genetics obtained from GreenLeaf.
"We are ready to coordinate access to all the inbred lines, hybrids and traits needed for customers to feed their own breeding programs," says Ron Wulfkuhle, chief executive officer, GreenLeaf Genetics. Customers include seed companies, foundation seed companies and national retailers.
Don't expect either Syngenta or Pioneer to give away the germplasm store through this joint venture. Germplasm sharing is limited to just the joint venture, says Oestreich. GreenLeaf Genetics will be licensing products for specific uses, with Syngenta and Pioneer making decisions as to what germplasm they release for these purposes.
Outside of the joint venture, Syngenta and Pioneer will continue to offer hybrids and varieties with their proprietary germplasm. "We will continue to be fierce competitors in the marketplace," Oestreich says.
Some industry observers note the move enables Pioneer and Syngenta to better compete with Monsanto, which has made sizeable market inroads in recent years with its Roundup Ready system and other seed traits.
"We're excited and enthused about this technology," says Mike Mack, chief operating officer, Syngenta Seeds. He expects Optimum GAT to be the leading soybean technology--ahead of the Roundup Ready system--when it's first marketed in 2009."We look forward to that day," he says.
Monsanto remains confident in the ability of its technology to compete in the marketplace. "We've had a licensing business in place for nearly a decade that has a historical track record of serving regional and local seed companies with seed genetics and new technology, and ultimately, provides farmers greater choice in products," says Mica DeLong, manager, public affairs for Monsanto. "The fact that the broader industry has come around to recognizing the value of this important market is validation of what we've long known."