More Players Enter Seed IndustrySummary: A number of companies of different industries are getting into seed business tobenefit from the good development tendency of seed industry, according to CCM’s Augustissue of Seed China News.Tags: seed, seed industry, Bright Group, Bright Seed, Bright Rice, breeding, Shanghai Academyof Agricultural Sciences, hybrid rice seeds, hybrid corn seeds, sweet corn varieties, cabbagevarieties, spinach varieties, SyngentaA number of companies from different industries are getting into seed business, in order to benefitfrom the good development tendency of domestic seed industry. Under the situation of industrialreorganization promoted by the government, the entrance of those companies would bring morecompetition to seed business while accelerating industrial prosperity, according to CCM’s Augustissue of Seed China News.Bright Food (Group) Co., Ltd. (Bright Group), a leading food conglomerate headquartered inShanghai City, announced the establishment of an affiliated company called "Bright SeedIndustry Co., Ltd." (Bright Seed) on 18 Aug. 2011. It is understood that, Bright Seed is a wholly-owned subsidiary of Bright Rice Industry Co., Ltd. (Bright Rice) which is a subsidiary of BrightGroup.According to Wang Zongnan, president of Bright Group, the newly founded company shall focuson building commercial breeding system, aiming to develop into a national seed enterprise withintegration of breeding, propagation and promotion.Bright Seed has signed licensing agreements for new varieties with some research units, such asShanghai Academy of Agricultural Sciences (SAAS), Wujin Rice Research Institute (JiangsuProvince), etc., total contract value reaching USD3.26 million (RMB21 million). The company hasbeen authorized by Shanghai Academy of Agricultural Sciences to operate some new varieties ofjaponica rice and beer barley.In order to build a platform for crop breeding, Bright Seed is going to carry out extensive anddeeper cooperation with research units or universities. In the early period, the company probablychooses Shanghai suburbs and Northern Jiangsu as primary markets, mainly selling rice seedsand wheat seeds.
Bright Seed intends to establish its perfect sales network, through cooperation with seeddistributors of counties. The company also says, it will cooperate with 1-2 large grain seedenterprises of Yangtze River Delta region before 2015, to expand its sales market.It is worthwhile to note that, Shanghai Government just issued the implementation guideline ofdeveloping modern seed industry on 5 Aug. 2011. It can be speculated that Bright Seed wouldbenefit a lot from governments preferential measures including financial support, R&D subsidies,tax relief, etc. Besides, the competitive environment was relatively relaxed for Bright Seed, asthere have been only a few seed companies possessing breeding capacity in Shanghai.As a large enterprise group, Bright Group already owns four listed subsidiaries, business domaincovering modern agriculture, food manufacturing and chain commercial industry. Withtremendous capital and perfect industry chain, its new seed business would obtain fastdevelopment in future.Sichuan Leshan Fuhua Agrochemical Technology Co., Ltd. (Sichuan Fuhua), a large groupcentering on pesticide production, also announced to get into seed business early this year. Thecompany has been trapped in poor glyphosate business, due to the severe overcapacity inglyphosate industry.According to Zhanghua, president of Sichuan Fuhua, the company plans to acquire several seedcompanies within 2011, investing greatly to build breeding bases and an R&D center. It isexpected that the company shall build the seed sales network by setting chain stores and on-lineshops.It was reported that Sichuan Fuhua has carried out cooperation with Sichuan AgriculturalUniversity and Leshan Institute of Agricultural Sciences, in breeding research and projectbuilding. Besides, the company is also seeking cooperation with foreign companies, in order todevelop the transgenic seed business.At present, Sichuan Fuhua owns a seed subsidiary, Sichuan Zhengqi Agriculture DevelopmentCo., Ltd. (Sichuan Zhengqi), which was founded in 2002. The subsidiary has been mainlyengaged in sales and production of hybrid rice seeds and hybrid corn seeds. With operatingrights of a number of rice varieties and large area of rice seed production bases, Sichuan Zhengqihas strong competitive advantage in local area.
Sichuan Fuhua owns great investment capacity and solid sales network of pesticides. If thecompany is able to obtain competitive crop varieties and strengthen the R&D capacity bycollaborating with research institutes, its momentum of seed business should not be ignored.Guangdong Tianhe Agricultural Materials Co., Ltd. (Guangdong Tianhe), a leading distributor ofagrochemicals in Guangdong Province, already founded a seed subsidiary in late 2010. It choseto first distribute vegetable seeds to initiate its seed business.Guangdong Tianhe has introduced several vegetable varieties from Syngenta, including sweetcorn varieties, cabbage varieties, spinach varieties, etc. The company has maintained a goodrelationship with Syngenta for a long time before the cooperation on seed business. Besides,Guangdong Tianhe also markets vegetable seeds, such as bitter gourd varieties, eggplantvarieties, etc., from Guangzhou Vegetable Science Research Institute.The company has a strong distribution network of pesticide and fertilizer, which should be of greathelp to the marketing of vegetable seeds. Meanwhile, the addition of Guangdong Tianhe wouldmake the competition of vegetable seed market more intense especially in Guangdong, sincethere have been a large number of vegetable seed companies in local.Overall, adequate funds, good relationship with research units and governments, and perfectsales network are all essential for new players to get into seed industry and compete with a largenumber of existing counterparts. With the entering of new competitors and the promotion from thegovernment, Chinas seed industry is going to see more transformation in future.(Guangzhou China, September 1, 2011)Source: Seed China News 1108http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.htmlContent of Seed China News 1108:Administration of Seed Industry to be foundedSeedling industry prospering in Shouguang CityMore players enter seed industryHefei Fengle underperforms in corn seed businessShandong Denghais performance declines in H1 2011Gansu Dunhuang sufferes loss in H1 2011
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