The French Vilmorin rise to the world rank of vegetable seeds

By Marie-Josée Cougard

The landscape of the agrochemical industry has changed considerably in three years. The giants have become super-giants, rebapping the cards of competition in a global market of seeds weighing 40 billion dollars, field crops and vegetables combined. In passing, the French Vilmorin has risen to the world rank of vegetable seeds.

This vast movement of tectonic plates saw the merger of German Bayer and American Monsanto, Chinese ChemChina and Swiss Syngenta, and the birth of Corteva, an independent group of two American chemists Dow and Dupont, which he includes agricultural activities.

Bayer had to sell 100% of his seeds to his compatriot BASF in order to acquire Monsanto, which helped Frenchman Vilmorin take the world leadership in vegetable seeds in a $ 6 billion market. A few tens of millions of euros separate the vegetable business (Seminis) from Monsanto and that of Vilmorin.

Acquisition

As it stands, the world vegetable market remains much more fragmented than that of field seeds. He could see new reconciliations taking place. "Vilmorin, whose priority is to reduce its debt after several acquisitions, is nevertheless ready to finance a structuring external growth transaction, if it presents itself," said its managing director, Daniel Jacquemond.

With a growth of close to 4%, to 688 million euros during the 2019-2020 financial year ended June 30th, the French group's vegetable seeds experienced more dynamic periods, when the turnover increased by 6%. % per year. At the same time, the group made 650 million with field seeds (+ 5.2%). Total operating income jumped 14% to 111 million, with net income down slightly from 73.9 million to 73.9 million. Operating margins moved in opposite directions in both activities. Vegetables, in decline, suffered notably from a "very unfavorable product mix" , while field crops benefited from a sharp rise in the commercial margin thanks to rapeseed in Europe and maize in Latin America.

Ambitions

In this sector, Vilmorin wants to develop its positions in "wheat and maize, two strategic crops for the group" . Despite the very good results obtained on the European rapeseed market, he does not intend to launch on this important niche in the world. But prefers to consolidate its alliances and partnerships in order to access technologies and pursue varietal innovation. Vilmorin wants to expand its corn business to new territories, primarily in South America and Africa to have between 5 and 10% market share futures.

In vegetable gardens, Vilmorin wants to accelerate its development in Asia until "to reach 20% of the activity on this zone" , against 12% in 2018-2019. In Sub-Saharan Africa (Zimbabwe and Zambia) , French also has very "big ambitions" through Seedco, which it holds 30% since 2014. It has just participated in a capital increase to finance international activities. .

For the 2019-2020 financial year, Vilmorin expects its consolidated turnover to grow by 2-3% and expects to reach an operating margin of at least 8%, taking into account research expenses of 255 million euros.

Editor's note: This article was originally published in French, Vilmorin double Monsanto au premier rang mondial des semences potagères. This English summary has been prepared with Google Translate and edited for clarity.