Edited from: 2008 annual report and company website
Syngenta states that 2008 was a record year for agriculture. Investment by growers in their crops surged as crop prices soared in the first half of the year. Acreage expanded and technology adoption accelerated. This meant an increase in the planting of high value seeds and greater usage intensity in crop protection, resulting in excellent crop yields globally. However, while grain stocks have been partially replenished, food and feed demand continues to grow.
The challenge of increasing agricultural productivity to meet the demands of a growing world population remains. For Syngenta, 2008 was a year in which it made substantial strategic progress while strengthening its platform for future growth through investments in manufacturing capacity, R&D and marketing. The company has also made several acquisitions in targeted areas.
“Our outstanding financial performance shows that we maximised the opportunity presented by the exceptional rise in crop prices. Sales increased by 21% at constant exchange rates, with the pace of growth sustained throughout the year even though crop prices declined in the second half”, says chief executive officer, Michael Mack.
In July 2008, Syngenta announced a phased capacity expansion programme with an expected total investment of $600m over the three years 2008-2010, and an estimated payback period of less than four years. The capacity expansion will be focused on Syngenta's sites at Grangemouth, UK and Monthey, Switzerland.
The main products concerned are the fungicide azoxystrobin (Amistar) and the insecticide thiamethoxam (Actara/Cruiser). The decision to invest in these key compounds is underpinned by what the company states as being “outstanding success to date and by favourable long term trends towards improving crop performance”.
Its R&D pipeline includes a number of second generation launches targeted for launch from 2009 onwards, including: Agrisure Viptera for broad lepidoptera insect control; corn amylase for more efficient bioethanol production; and drought-tolerant corn. The company states that these launches will enable it to offer multiple stack seeds with both productivity and end-use benefits.
Its R&D strategy has been developed to take full account of the needs and opportunities of emerging markets. Syngenta announced in 2008 the construction of a new biotech research and technology centre in Beijing for the early evaluation of genetically modified (GM) and native traits in key crops. The investment will be approximately $65m in the first five years and by 2010 the centre will employ around 200 researchers and staff.
Syngenta is also investing in seeds production, notably in the US, where projects include new capacity for sweet corn, for which it says it is the global market leader.
“The creation of new businesses is a cornerstone of our strategy, enabling us to adapt to fast changing market dynamics. We are now bringing together flower seeds and professional products to form a new lawn and garden business serving the varied needs of professional customers, such as ornamental growers and golf course managers, and consumers”, says Mack.
Another area of Syngenta’s strategy is ongoing innovation and will “play a unique role owing to the diversity and breadth” of its technology platforms.
Looking ahead, the company says that it faces an “uncertain economic climate, but one in which the fundamental drivers of its industry remain firmly intact”.
“Arable land is limited and increasingly affected by soil erosion and water availability, while demand for food and feed continues to grow. So agriculture has to do more with less, making the best possible use of natural resources and maximising the yield of every crop planted”, says Mack.
Looking ahead, Syngenta expects the continuing need to improve agricultural productivity to result in sustained demand for its products. On this basis, it has raised its target for 2009 to growth in earnings per share (EPS) to over 35%.
Syngenta's strategy has three main elements, these being:
(1) Enhance leadership in crop protection and field crops seeds;
(2) Drive growth in its consumer led areas of professional products and vegetables, and flower seeds; and
(3) Create new opportunities by exploiting its plant science capabilities.
ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.
A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.
See the article and analysis of the ICIS Top 100 on ICIS news.
Financial highlights: Syngenta, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
2004 |
|
Sales ($ m) |
11,624 |
9,240 |
8,046 |
8,104 |
7,269 |
|
Operating Profit ($ m) |
1,858 |
1,464 |
829 |
860 |
541 |
|
Net Profit ($ m) |
1,385 |
1,111 |
637 |
626 |
623 |
|
Total Assets ($ m) |
14,584 |
13,280 |
11,852 |
11,404 |
12,008 |
|
Diluted earnings per share ($) |
14.63 |
11.42 |
6.35 |
6.13 |
-- |
|
Number of Employees |
24,000 |
21,200 |
19,500 |
19,000 |
19,536 |
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Syngenta
Company Structure
Syngenta is an agribusiness company and claims to be a leader in crop protection. Syngenta was formed in November 2000 by the merger of Novartis Agribusiness and Zeneca Agrochemicals and is listed on the Swiss stock exchange, as well as in London, New York and Stockholm.
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