FRANKFURT (Dow Jones) – Chemicals group BASF expects its plant biotechnology unit , a rapidly growing medium-term earnings potential. (Photo : BASF)
"We are confident that in the middle of the decade first significant revenues from this business come, " said Stefan Marcinowski, the BASF board member responsible for crop protection and biotechnology , told Dow Jones Newswires. But from the collaboration with Monsanto to yield increase and stress-tolerant crops, BASF expects its claims to 2020 hundreds of millions of U.S. dollar amount as the net result. The high means which has put the world’s largest chemical company so far in this business and in the coming years will invest more , the manager considers it appropriate.
Marcinowski is not preceded by the highly controversial in Europe , but now approved by the EU for cultivation , potato starch genoptimierte "Amflora " potato and other planned projects. "The amylopectin potato is an interesting project with which one can achieve economic success if done in a reasonable time the appropriate approvals. But it is not a project that would justify itself , that BASF operates this large plant biotechnology activities, " said Marcinowski.
High returns that justify the huge cost of research , expects the BASF SE mainly from the biotechnology cooperation with the U.S. company Monsanto. With partner BASF develops productive and stress tolerant crops since 2007 , for example those resistant to drought. The common plant biotechnology pipeline includes the fruits of maize , soybean , cotton and canola , and was recently added to wheat. Already in 2012 , subject to the pending approval to be introduced to the world’s first genetically enhanced corn Drought in the U.S..
Since 1998, BASF has invested EUR 1.3 billion in agricultural biotechnology . " You can assume that we will invest further in the coming years, each year approximately EUR 150 million in research and development in this field , "said Marcinowski.
No significant returns from the field have been made, but the medium term earnings expectations are enormous. 2020 BASF expects to Marcinowskis statement jointly with Monsanto in the development of higher yielding and stress tolerant crops , with sales of more than 2 billion USD. The end of the story is not reached it, the potential yield could rise even further , said the manager. The proceeds will be divided in the ratio 40:60 , as the seeds with Monsanto brings and takes over the marketing. For 2020, BASF expects hundreds of millions of U.S. dollar amount as the net result. In comparison, the potato projects, BASF expects in a few years for the entire potato starch pipeline only with license revenue of 20 million to 30 million EUR.
The long time horizon frightens BASF not there. "The development of a new biotechnological product requires a long-term commitment , usually eight to ten years. We have started new in this field, and first had to research and development investment . It is not here as in the plant to an ongoing business from the we have already achieved returns , "explained the manager. The 13 -year-long traffic jam on the approval Amflora but had long been inadequate .
An entry into the seed business , such as BASF , Bayer does not plan to . "We have decided differently than BASF aware than our competitors, not to invest in seed, because we consider this additional financial commitment and the related allocation of funds was not necessary , "said Marcinowski. "We can, for example, Monsanto or other partners , such as the seed company KWS or the Brazilian Embrapa , market our knowledge about the genes in partnerships. This gives us flexibility because we are not limited to its own seed , "he said.
KWS is working with BASF for example, of genetically modified sugar beet, are expected to provide the higher sugar and energy revenues, is the largest Brazilian sugar cane growers research on the genetic improvement of sugarcane. With the Brazilian Embrapa BASF has already received the first approval for cultivation of genetically enhanced soybeans. should be planted but only if the import licenses available in the main markets, Europe and China, said Marcinowski. "More partnerships are planned, " said the manager.
Will be worth the high investment , represents BASF beyond question. "We assume that the growing world population, will lead to higher quality requirements for food, and increasing demand for renewable energies and limited agricultural land is a growing demand with it, make the investment attractive in plant biotechnology , "said Marcinowski.
In contrast to plant biotechnology , the chemical group in business with pesticides already high yields. In the first half , sales had increased by 2 %, earnings from operations before special items , however, was decreased by 10 % and ended up with 641 million EUR. The second half is now to turn out but better than last year, said Marcinowski. The forecast for the Agricultural Solutions segment , he reconfirmed , but described it as ambitious. The company wants to increase over the previous year the turnover and keep the level of earnings.
"We are moving towards a stronger South American business, " said the manager. " But it will be a challenging target to get into the scale of last year’s record result , "he said. "We have this year increased research expenses and continued investment in expanding our growth markets, " he added.
With margins for price increases for price declines expected in the first half of the managers not in the second half. " Price increases in the second half of the entire product range , I do not . We remain realistic and see what is possible , "he said.
Major acquisitions in crop protection business , and within the group , which at present includes Marcinowski . "We have said clearly that we will do after the acquisition of Cognis Once any major acquisitions , and now put our focus on reducing the debt , "he said. "We will continue to make small acquisitions if they offer good opportunities, " he added.
Strategically, the plant is but a principle area of work , would grow in the BASF, mainly on their own. " This can be seen also in the major research and development services we provide in this area, " said the manager. "In the plant protection and plant biotechnology to flow 36 % of our total research and development services .
Website: www.basf.de - By Heide Oberhauser -Aslan , Dow Jones Newswires +49 ( 0 ) 69 29725113 , heide.oberhauser @ dowjones.com DJG / hoa / has / adf