Agrochemical multinational Monsanto has drastically reduced the operations of its Israeli R&D center and is mulling its closure, sources informed “Globes”. The center was the result of two local acquisitions made by the US company the $35 million purchase of Rosetta Green in 2013 and the $100 million buyout of Beeologics in 2011.
The two Israeli ventures were brought together under one roof, which at its peak employed dozens of employees; the R&D center’s workforce has since been reduced to a few individuals. Monsanto also has another small R&D center focusing on produce seeds which has yet to be cut and a strategic cooperation with Evogene.
The cutbacks are part of wide downsizing at the multinational enterprise. Monsanto is in the midst of terminating the contracts of thousands of workers around the world and “bringing in” its global research centers to its St. Louis headquarters.
The crisis affecting Monsanto and the rest of the agriculture sector is based on price drops of products like corn and soy, which then carry over to the price of seeds the key product offered by companies like Monsanto. The crisis led to a series of consolidations, with rival Syngenta sold to ChemChina and the merger of Pioneer and DuPont.
While experts believe Monsanto is also likely to merge potentially with the seed division of Bayer its CEO has rejected the possibility of a merger. Monsanto trades on the NYSE with a market cap of $28 billion, after a 28% drop in share value over the past year.
Monsanto and other multinational conglomerates are often the target of environmental activists led by Greenpeace who claim they are harming the environment extensively, allegedly, because their seeds are genetically modified, the prices they offer to farmers, and the claim their pest control products are bad for the environment.
Given the past criticism, when the Office of the Chief Scientist in the Ministry of Economy signed a cooperative agreement with Monsanto in a bid to encourage its investment in other Israeli startups, a wave of criticism erupted as if the government had let in an “evil corporation”.
Monsanto’s investment in the aforementioned startups occurred before the signing of the agreement with the Chief Scientist; the company was already operating in Israel, and it has not invested in other startups since the deal was signed. Nevertheless, the company is now significantly reducing its presence in Israel.
Rosetta Green was acquired by Monsanto for $35 million in 2013 a 90% premium over its market value on the TASE. After the purchase, Monsanto maintained all 20 of its employees, claiming to be deeply impressed with the quality of its team. However, as is often the case when foreign firms buy Israeli companies, they eventually decide they want their capabilities closer to home.
Monsanto did not comment on the report.