A unit of Sinochem Corp, a major State-owned agrichemicals conglomerate, is in talks with the US-based crop-biotechnology company Monsanto Co about cooperation in tapping China's vegetable-seed market, said Group President Liu Deshu while attending China's annual parliamentary session in Beijing on Thursday.
Liu confirmed that Sinochem's seed division, China National Seed Group Co Ltd, is discussing cooperation with Monsanto, but declined to elaborate further, and it remains unclear what form the cooperation will take.
Analysts said that if the companies combined their respective strengths, they could reshape China's vegetable market, which has long been dominated by multinational companies, and put fresh pressure on the nation's smaller seed companies.
In 2001, Beijing-based China National Seed Group Co Ltd set up a joint venture with Monsanto specializing in corn seeds. The JV, called CNSGC-Dekalb Seed Co Ltd, produces and sells hybrid corn seeds developed by Monsanto for the market in northern and western China, the nation's major corn-growing regions. Monsanto currently has two other JVs and also owns three companies that focus on genetically modified cotton and conventional vegetable seeds in China.
"The two companies are long-term partners and they have been discussing plans for cooperation for many years," said Lance Wang, the general manager of CNSGC-Dekalb.
The companies expect to cooperate in a number of areas, including the agrichemical sector, Wang said, but declined to disclose further details.
The highly segmented Chinese seed market has more than 8,000 domestic companies, most of which have limited research and development capability. Industry analysts estimate the value of the country's vegetable seed market to be more than 8 billion yuan ($1.25 billion) a year.