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KWS: Expand corn business to Huanghuaihai Plain and south region in Chinaqrcode

−− Interview with Gyula Szelle, head of East-SE Asia Corn and Oilcrops at KWS

May. 25, 2018

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May. 25, 2018
KWS SAAT SE is one of the world's leading plant breeding companies focused on global breeding and distribution in more than 70 countries in the temperate climatic zone. KWS entered the Chinese seed market already 40 years ago. Until today, KWS has established one of the biggest corn breeding programs in China, its corn variety test covers 90 different regions, over 100,000 test plots.

2017 is an important year for Chinese seed market. It could be labeled with many keywords, such as revision of standard, merger and acquisition, adjustment of planting structure, especially the decrease on corn planting area, etc. The changing tone of the market constitutes a great challenge to the seed industry practitioners. Early this year, AgroPages invited Gyula Szelle, head of East-SE Asia Corn and Oilcrops at KWS, to share his ideas on Chinese seed market and some hot issues in 2017. This article was also included in our recent seed magazine (Chinese version), which is published this April.

1. Could you please introduce the position of KWS in Chinese corn seed market? And also the representative products.

KWS left her first footprint in China already 40 years ago. Since then KWS has been cooperating with several business partners in China, and through her partnerships, such as our joint venture partner Kenfeng from the North of China, KWS has provided outstanding corn hybrids to Chinese farmers. At present, the newly established Kenfeng-KWS joint venture is the major corn commercial platform for both JV companies in the North-East, however, KWS also has outstanding license partners mainly in North-West part of China. We estimate our corn market share around 3% in China that definitely does not include the counterfeited seed market which causes lots of problems for breeding companies. Hybrids available on the Chinese corn market like Demeya, Kenwo, Kewo, KWS, etc. are all hybrids coming out from KWS breeding program.

2. In China, the top-selling products “demeiya” are all for feed and food use, and KWS is mainly focused on developing early maturity, cold-resistant corn varieties, is this the R&D trend in the world of KWS? What are the main breeding targets?

KWS operates highly competitive corn breeding programs in all major corn growing areas in the world, developing proprietary germplasm ranging from super early in Europe to late maturities in the US and fully tropical germplasm in Brazil. In all maturities, KWS focuses to provide the farmer with high yielding, stable hybrids that allow for an early harvest with low moisture content.

3. It is said that KWS is willing to expand corn business to the Huanghuaihai Plain and south region in China, is it true? Compared to the traditional seed companies in those regions, what’s the advantage of KWS?

That is right. Our advantage right now to local Chinese companies is our global, modern breeding approach and full access to proprietary germplasm in any maturity group from all over the world. You ask about ‘’traditional seed companies’’, however I believe that the development of the modern Chinese seed industry cannot just be based on traditional, localized and many times protected approach any longer. China cannot avoid establishing global concept in seed industry and plant breeding – in different forms of cooperation as well - to stay or even become more competitive.

4. Where does KWS go to find the necessary germplasm that will help your companies’ breeding work and what are the main sources of your diversity: mainly commercial varieties, or also landraces and other species?

All global corn breeding programs of KWS work closely together regarding germplasm and technology exchange. As most of the breeding programs exist since many decades the major source of elite germplasm diversity for any individual program like China are the connected elite programs in Europe, North- and South America. Due to the general lower performance level and missing heterotic pool compatibilities, landraces or competitor varieties are rarely used anymore.

5. How do you see the new breeding technology, especially for genome editing?

Genome Editing, short to medium term, could become an important breeding tool for specific, simple inherited traits such as disease tolerance or grain composition quality. KWS dedicates significant resources to develop this technology, especially in its recently established research facility in St. Louis. Like the other global companies KWS holds all necessary agreements to use and further develop the methods.

6. With ChemChina’s acquisition of Syngenta, cultivation of GMO crop for human consumption maybe be possible in the future, what’s the challenge and opportunity for KWS?

KWS’s relationship with Syngenta is outstanding. We have several common platforms to cooperate with each other and we also have several, long term, technology related agreements. KWS has been granted access contractually to all Syngenta GM traits in the next 20 years. We see this as a win-win situation for both companies in China if the government is ready to open the market for GMO cultivation. The challenge related to GMO corn opening in China is the uncertainty around exact timing and regulatory requirements (GM hybrid registration, trait conversion, etc.), especially for foreign companies like KWS. ChemChina is an elite, global chemical company without too much experience in seed business, however we do trust that ChemChina will successfully integrate Syngenta seed part into the Chinese seed industry and the government will support this integration.

7. Your business partner KenFeng Seed went through a difficult time in 2016, the adjustment of the government’s corn industry policies and the decreasing corn price caused a fall of 18.3% in its revenue from corn seed business. Does this also influence the business performance of KWS in China? How do you overcome it?

Yes, the corn acreage decreased especially in areas where farmers used to plant early maturing corn varieties. I believe the decrease happened too fast and affected too large area, which was unnecessary. For the next years we believe, however, that this market segment for early varieties will recover and increase again due to the increasing degree of mechanization of the harvest and consolidation of farm lands. You can see some signals already this year for that. KWS is strong in early corn but based on our also high performing later maturing varieties Kenfeng-KWS JV will focus and intensify its activities more to later market segments.

8. KWS has a very successful business in first three quarters of 2016/2017, especially corn seed business in Brazil, how does KWS reach this result?

Today we are licensing in GM traits from various platforms (like the mentioned Syngenta agreement); we have a joint GM trait development program with Limagrain and we are developing traits with NON GM technologies too. Therefore KWS is ready to provide choice to farmers on any market of the world including Brazil where the major corn market is GMO. In 2012 KWS decided to enter the Brazilian market via acquiring commercial and breeding companies and with that created a platform for tropical and subtropical corn breeding and business development. Acquisitions mean that the acquiring company has to integrate the acquired one as soon as possible (culturally, financially, etc.) and obviously for KWS it was a successful, super-fast integration after which the development of the new company speeded up even more.

Source: AgroNews

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