IT/OWG-EFMLS-9/19/Inf.

5
June 2019 E

INTERNATIONAL TREATY ON PLANT GENETIC RESOURCES

FOR FOOD AND AGRICULTURE

NINTH MEETING OF THE AD HOC OPEN-ENDED WORKING GROUP TO

ENHANCE THE FUNCTIONING OF THE MULTILATERAL SYSTEM

Rome, Italy, 17−21 June 2019

REPORT ON SALES WITHIN THE SEED SECTOR

Note by the Secretary

The Co-chairs of the Working Group have indicated the importance of having data and
information available about sales and profitability within the seed sector at global level,
especially in the context of defining monetary benefit-sharing in the revised SMTA.
The Co-chairs therefore sought input from experts on recent trends in both areas. This document
reproduces a presentation prepared for the ninth meeting of the Working Group on preliminary
key findings of the analysis by the experts

This document is printed in limited numbers to minimize the environmental impact of FAO's processes and
contribute to climate neutrality. Participants are kindly requested to bring their copies to meetings and to
avoid asking for additional copies.
Drilling down into seed
company sales and profit
Rome | 17th June 2019
Dr Jonathan Shoham
Phillips McDougall | Agribusiness
Intelligence
Contents
 About Agribusiness Intelligence
 The Seed Market
 Seed company sales
 Seed company profit
 Crop analysis
 Next steps
 About
Agribusiness
Intelligence

4 Agribusiness intelligence
The complete picture on global agribusiness

Providing unrivalled breadth and depth of intelligence

Helping the world’s largest and most influential agribusiness organisations
gain competitive advantage by delivering actionable intelligence across the
food and commodities value chain.

5 Agribusiness intelligence
The complete picture on global agribusiness
5. Retail & Industry 1. Inputs
► Food
Service
Fertilizers Crop
► ammonia protection &
► Restaurants
► nitrates
seed
► phosphate
► agrochemicals
► potash
► seeds
► sulphur
► GM crops
► sulphuric acid
► biostimulants
► urea
► biopesticides
4. Food Policy ► NPK Animal health
& Regulation ► pharmaceuticals
► vaccines

Providing ►
►
US Agriculture
US Food Policy
►
►
diagnostics
generics
breadth ►
►
European Agriculture
European Food Law
► feed

and depth of
coverage
across
the value
chain 3. Food
Processing 2. Agricultural
& Distribution Commodities

► meat & meat cuts ► grains & oilseeds

► dairy ► livestock, poultry & cattle
► fruit juice ► soft commodities
► canned & frozen food ► animal feed
► transportation & logistics PLUS Energy – Biofuels &
► weather Coal

6 Agribusiness intelligence
Delivering a competitive advantage in a dynamic industry

Our trusted services provide:

► Authority – through our well respected,
global team of analysts with unrivalled
industry contacts
► Connection – linking industry activity to
give a complete perspective
► Precision – proprietary and deep historical
data sets feeding our market reporting
► Forward Focus – giving the ability to help
clients see further and react quicker to
changes and trends through accurate
forecasting and analysis
► ADVANTAGE – ultimately giving our
clients the confidence to make quicker,
better decisions that make a difference

7 Agribusiness intelligence
Who we work with

Powering agribusiness organizations

large and small
► Commodity trading houses
► Government organizations and regulatory authorities
► Food manufacturers
► Agrochemical and seed companies
► Fertilizer companies
► Banks, hedge funds and investors
► Trade associations and NGOs
► Animal pharmaceutical companies
► Oil and gas companies
► Consultancy organizations

8 Agribusiness intelligence
 Partnership

• Ahead of the Eighth Session of the Governing Body in November 2019, the FAO requires an analysis of the global
seed sector and company performance, to provide an understanding of the sales and profitability of the seed
sector.

• Agribusiness Intelligence works with the world’s largest and most influential agribusiness organizations to deliver
timely, specific and actionable unbiased intelligence on developments in the global agrochemical and agri-
business sector.

• Leading brands include the Phillips McDougall and Agrow brands, which provide unparalleled coverage of the
global market for the seeds and crop protection industry.

Project
• To provide a report on the global seed sector and an analysis of industry and company (including public
organizations where possible) performance (notably sales and profitability), additionally to segment by crop
types.

9 Agribusiness intelligence
The Seed Market
Commercial Seed Market: GM accounts for over 50%

$ Million USD37 2011 2012 2013 2014 2015 2016 2017 2018

GM seed 15,685 18,495 20,100 21,054 19,789 20,396 21,429 20,822

Conventional seed 18,810 19,065 19,282 19,481 17,441 16,582 17,998 17,036

World seed market 34,495 37,560 39,382 40,535 37,230 36,978 39,427 37,858

11 Agribusiness intelligence
Commercial Seed Market: GM accounts for over 50%

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
GM Conventional
Source: Phillips McDougall

12 Agribusiness intelligence
Changing seed industry structure:

Top 5 now the Top 3; BASF enters

2016 sales $m 2018 sales $m

Monsanto Bayer
DuPont Pioneer Corteva
Syngenta Dow and DuPont
Syngenta
merged
Dow Agrosciences Bayer acquired BASF
Bayer Monsanto Bayer
divested its seed Vilmorin
Vilmorin business to BASF
KWS
KWS
DLF
AgReliant Genetics
DLF AgReliant Genetics

Takii Sakata
Sakata Takii
- 4,000 8,000 12,000 - 2,000 4,000 6,000 8,000 10,000 12,000

13 Agribusiness intelligence
3 Tiers of Seed Company

• Tier 1: The R&D-based ‘majors’ with sales >$500m

• Tier 2: Mid-sized companies with sales between $100m and $500m
• Tier 3: Small seed companies with sales of under $100m

14 Agribusiness intelligence
Seed Company
sales
Historic Seed Sales for the Leading Companies

$m. $m. $m. $m. $m. $m. $m. $m. $m. $m. $m. $m.

Monsanto 5,120 6,632 7,229 7,743 8,953 10,010 10,261 10,685 10,021 10,437 10,913 na

DuPont Pioneer 3,325 3,992 4,736 5,338 6,258 7,253 8,181 7,614 6,787 6,642 6,807 7,842

Syngenta 1,746 2,105 2,233 2,468 2,850 3,237 3,204 3,155 2,838 2,657 2,826 3,204
Dow
365 470 630 795 1,074 1,360 1,614 1,604 1,453 1,533 1,455 na
Agrosciences
Bayer 523 662 699 910 1,140 1,237 1,293 1,466 1,417 1,502 1,671 10,443

Vilmorin 1,077 1,322 1,174 1,255 1,381 1,487 1,557 1,713 1,518 1,471 1,485 1,534

KWS 554 707 785 825 922 1,017 1,137 1,254 1,179 1,150 1,175 1,269
AgReliant
296 345 389 441 488 603 695 692 630 671 667 593
Genetics
DLF 410 442 383 356 400 411 451 605 543 530 517 693

BASF na na na na na na na na na na na 1,805

Kaneko na na na na na na na na na na na 530

16 Agribusiness intelligence
Historic Seed Sales for Tier 2 Seed Companies (1)
2013 2014 2015 2016 2017

$m. $m. $m. $m. $m.

Sakata 392 399 399 399 462

Takii 474 456 430 428 473

Rijk Zwaan 362 423 407 431 458

LPHT na na na 294 400

Enza Zaden 261 283 266 293 322

Advanta India 202 235 194 248 289

Barenbrug 273 286 279 262 278

RAGT Semences 277 291 257 232 210

Bejo Zaden 175 197 194 199 208

Nuziveedu na na na na 192

Euralis 219 235 212 192 197

Beidahuang Kenfeng Seed na na na Na 193

Jiangsu Dauha Seed na na na na 191

National Seeds Corporation na na na na 182

17 Agribusiness intelligence
Historic Seed Sales for Tier 2 Seed Companies (2)

2013 2014 2015 2016 2017

$m. $m. $m. $m. $m.

Union InVivo 132 129 127 161 180

SES Vanderhave 200 180 168 109 159

Caussade
191 213 173 155 158
Semences
Maïsadour 173 183 170 140 145

Saaten-Union 144.4 148.6 146 139 130

Seed Co na na na Na 129

Denghai Seed na na na 229 122

Win-All Hi-Tech
na na na 78 102
Seed

18 Agribusiness intelligence
Tier 3 companies

• More difficult to get data

• Private, often family-owned
• Chinese companies below top 8
• Indian companies below top 3
• All African companies apart from Seed Co
• Over half of the signatories of the declaration?

19 Agribusiness intelligence
Top 20 Chinese Seed Companies
Sales of Top 20 Chinese Seed Companies in 2017
Rank Company 2016 sales 2017 Sales Change
US$m. US$m. %
1 Long Ping High-Tech 294.08 399.63 35.89%
Beidahuang Kenfeng
2 220.06 192.95 -12.32%
Seed
3 Jiangsu Dauha Seed 171.09 191.41 11.88%
4 Denghai Seed 229.42 122.46 -46.62%
5 Win-All Hi-Tech Seed 77.62 101.95 31.34%
Guangdong Xianmei
6 85.83 94.24 9.79%
Seed
7 Zhongnongfa Seed 107.15 93.01 -13.20%
Beijing Jinse Nonghua
8 95.77 91.00 -4.98%
See
9 Beijing Lantron Seed 55.59 63.85 14.87%
10 Henan Qiule Seeds 50.12 49.20 -1.83%
11 Jiangsu Mingtian Seed 46.23 46.89 1.43%
12 Hefei Fengle Seed 44.50 41.95 -5.73%
13 WanXiang Doneed 45.94 39.79 -13.38%
14 Gansu Dunhuang Seed 60.77 39.02 -35.79%
15 Jiangsu Red Flag Seed 32.84 38.87 18.37%
Jiangsu Zhongjiang
16 39.89 36.25 -9.14%
Seed
Hainan Shennong
17 49.69 34.09 -31.40%
20 Agribusiness intelligence Dafeng Seed
18 Sichuan Xike Seed 20.45 23.75 16.15%
Top Indian Seed Companies

Sales of leading Indian Seed Companies in 2017 (provisional)

Company $m
Advanta 289
Nuziveedu 202
National Seeds Corporation 182
Rasi 78
Nirmal 55
Andra Pradesh Seed Co 51
VNR Seeds 34
PHI 28
Kalash 17
Maharashtra 15
Kaveri 10

21 Agribusiness intelligence
Using manpower as a predictor of sales
Manpower vs sales $m
1000

900 y = 10.238x + 91.202

R² = 0.9434
800

700

600

500

400

300

200

100

0
0 10 20 30 40 50 60 70 80 90

22 Agribusiness intelligence
Seed Company
profitability
Tier 1 company profitability: $m 2017

Company Sales: $m EBIT* : $m EBIT *% Main Crops

Corteva 8056 769 9.5% Maize, soybeans, Cotton
Monsanto 10913 2910 26.7% Maize, soybeans, cotton, veg
Syngenta 2657 266 10.0% Maize, soybeans, veg, oilseeds
Bayer 1694 85 5.0% Canola, veg, cotton
Vilmorin 1594 133 8.4% Maize, veg, cereals
KWS 1212 148 12.2% Sugar beet, maize, cereals
DLF 618 35 5.7% Forage crops
AgReliant 657 66 10.0% Maize, soybeans
Kaneko 531 18 3.5% Veg

Total 27401 4412 16.1%

Total w/o Monsanto 16488 1502 9.1%

* EBIT – Earnings before interest and taxes

24 Agribusiness intelligence
Tier 2 company profitability: $m 2017-2018

Company EBIT % Main crops

2017 2018
Kaneko 3.5% 3.0% Veg & flowers
Rijk Zwaan 21.7% 14.0% Veg
Enza Zaden 14.1% 9.7% Veg
Barenbrug 8.5% 7.9% Turf grasses
Bejo Zaden 24.6% 10.4% Veg

Average EBIT % 12.9% 8.5%

25 Agribusiness intelligence
Proposed Company Segmentation

Tier 1 Tier 2 Tier 3

Sales range: $m >$500m $100-500m <$100m

Hundreds, possibly
# companies 11 30-40
thousands

Profit % of sales 10-15% 10% 5% (provisional)

% total market sales 75% 15% (provisional) 10% (provisional)

Annual reports and Company House

Methodology Annual reports Company House submissions and
submissions estimations

Signatories -1st pass 4 12 25

26 Agribusiness intelligence
Crop analysis
Seed market by crop: $m 2017

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0
Maize Soybean Vegetables Cereals Rice Rapeseed Cotton Sugar beet Sunflower
Sales 2016 ($ M.) Sales 2017 ($ M.)

28 Agribusiness intelligence
Sales of leading companies by crop: $m 2017

Maize Soybean Veg & Flowers Cotton Cereals Others

Bayer (Monsanto) 6,068 2,817 867 650 542
Corteva 5,324 1,613 161 968
Syngenta 1,075 424 622 707
BASF 186 491 237 779
Vilmorin 139 833 216 355
KWS 528 141 504
AgReliant 512 138 7
DLF 10 507
Takii 473
Sakata 462

Sub-total 13,645 5,179 3,758 1,049 357 4,368

Total 16,420 8,423 5,436 1,757 2,306 5,085

29 Agribusiness intelligence
Crop profitability

• Lot of variation within the same crop

• E.g. for corn Monsanto v profitable; other companies not always so
• Vegetables – some Dutch companies very profitable; Kaneko not so
• But can get some indications of ranges, averages and rankings by crop….

30 Agribusiness intelligence
Initial hierarchy of crop profitability

• Sugar Beet (>30% EBIT for KWS)

• Vegetables (10-15% EBIT: specialist companies, Monsanto, Vilmorin)
• Maize/soybean (5-10% EBIT: Corteva, Monsanto, Vilmorin, KWS)
• Forage crops (5% EBIT: DLF)
• Potatoes (<5% EBIT)

• ? Wheat, rice, rapeseed, other oilseeds, cotton

31 Agribusiness intelligence