Seed firm Vilmorin doubts farmer appetite for all-in offerings

Vilmorin & Cie SA

20/10/2016 16:28

* Like BASF, French firm sceptical of one-stop shop model 
    * Focus on veg seeds, maize, wheat; data only as complement 
    * Sees no clear M&A targets resulting from mega-merger deals 
    * Profits fell last year, Europe grain market to stay tough 
 
    By Gus Trompiz 
    PARIS, Oct 20 (Reuters) - Vilmorin  VILM.PA  will remain a 
specialist seed maker and is sceptical farmers will take to the 
bundled agricultural product offerings that have encouraged 
multi-billion merger deals in the farm supplies sector, the 
French firm's chief executive said. 
    Bayer's  BAYGn.DE  planned $66 billion purchase of Monsanto 
 MON.N , unveiled last month, followed ChemChina's deal to 
acquire Syngenta  SYNN.S  and a merger agreement between Dow 
Chemical  DOW.N  and DuPont  DD.N  - moves designed to bring 
scale and broader product ranges during a downturn in many 
agricultural markets.  urn:newsml:reuters.com:*:nL8N1BQ365 
    Vilmorin, the world's fourth-largest seed maker by sales, 
wants to stick to its priorities of vegetable seeds, maize 
(corn) and wheat, CEO Emmanuel Rougier told Reuters. 
    "We're a pure play seed company, unlike the other players," 
he said following a press conference. "We have plenty to do with 
our three priorities, without getting dispersed." 
    Like BASF  BASFn.DE , which has cast doubt on the one-stop 
shop logic pursued by Bayer in acquiring Monsanto, Vilmorin said 
the case had yet to be proven that farmers want to buy services 
from pesticides to weather data from one provider.  urn:newsml:reuters.com:*:nL8N1BS48J 
    "As part of a farmer cooperative group, we find it hard to 
imagine that farmers will want to have someone dictate to them 
how to run their farms from A to Z," Rougier said. 
    Vilmorin, majority owned by French cooperative Limagrain, 
had a team looking at ways to develop information services for 
clients to support seed sales, but had no plans to invest 
massively in so-called big data projects, he said. 
    The trio of mega-merger deals would on paper reinforce the 
current position of Monsanto, Dupont and Syngenta as the world's 
biggest seed makers, but it could take two or three years for 
the companies both to obtain regulatory approval and reorganise 
their activities, he said. 
    Vilmorin did not see obvious acquisition opportunities for 
itself arising from asset sales required for regulatory 
clearance, Rougier said earlier during a presentation of the 
group's 2015/16 results. 
    Likely markets for regulatory scrutiny would be cotton in 
the United States and canola in Canada, two markets which 
Vilmorin had no plans to enter, he said. 
    In vegetable seeds, the multitude of varieties would make it 
hard for regulators to see a dominant position, while Vilmorin 
itself already had large positions as the world's second-largest 
producer behind Monsanto, he added. 
    Vilmorin reported on Wednesday that its net profit for the 
year to June 30 fell to 60.8 million euros from 75.9 million in 
2014/15.  urn:newsml:reuters.com:*:nFWN1CP0RO 
    Its field crop division, which had been a drag on 2015/16 
profits, would continue to face difficult conditions in Europe 
due to low grain prices for farmers, it said. 
 
 (Reporting by Gus Trompiz; Editing by Andrew Callus and Mark 
Potter) 
 ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters 
Messaging: gus.trompiz.thomsonreuters.com@reuters.net)) 
 
Keywords: VILMORIN SEEDS/M&A