Monday, March 22, 1999
DuPont Co.'s planned acquisition of Pioneer Hi-Bred last week
goes a long way toward "sowing up" the consolidation in the U.S. of large seed
companies into life science companies, which are applying genomics to develop
new agricultural products and need distribution channels for their technology.
However, the application of genomics to plant science involves
layers of added complexity compared with its use in human biology. Products
resulting from the addition of single genes to plant genomes have begun to enter
the marketplace, but products resulting from the manipulation of plant biochemical
pathways are about 10 years from being realized.
Although two $100 million companies, Golden Harvest and Cargill,
remain independent sources of corn seed, the rest of the top 10 seed companies
in the U.S. are consolidated, said Rod Stacey, a partner with Verdant Partners
consultants. With its $7.7 billion acquisition of Pioneer, DuPont (Wilmington,
Del.) will become the largest owner of seed worldwide, with Novartis Seeds (Golden
Valley, Minn.) second and Monsanto Co. (St. Louis, Mo.) third, according to
Biotechnology companies applying their capabilities to agriculture
will need to make alliances with the owners of quality germplasm for the crop
of interest, Stacey said. He added, however, that the big multinationals will
be interested in partnering to leverage their investments in seed. Indeed, both
DuPont and Monsanto, which spent $4.2 billion in its acquisitions of seed companies
DeKalb Genetics and Delta and Pine, will be challenged to leverage investments
of this size.
Life science companies have hailed biotechnology as opening an array of markets to the agricultural, food and feed industries ranging from manufacturing pharmaceuticals and plastics in plants to producing nutrition-added crops that grow in poor soils and can be irrigated with ocean water. Analysts have predicted growth in genetically modified crop seeds sales of more than 50 percent per year, reaching nearly $6 billion by 2002 (see BioCentury, Oct. 12, 1998).