Bayer plans $9m investment in seeds projects

Monheim, Germany–Bayer CropScience, a subgroup of German pharmaceutical and chemical company Bayer AG, is planning to invest a total of 7 billion euros ($9.1 billion) by 2016 to further fuel its growth in the global agricultural industry.

The company is committing 5 billion euros to its research and development operations to develop new products in seeds treatment and chemical and biological crop protection, Sandra Peterson, chief executive at Bayer CropScience, said at a press conference on Thursday.

An additional 2 billion euros will be invested in production capacities and seed breeding and processing facilities, to meet rising global demand for agricultural raw materials, according to Peterson.

While crop protection remains its core business, the company is planning to expand its seeds business substantially in countries including Canada, Brazil and India, with a focus on oilseeds and soybean seeds.

"We expect our seeds business to double to around 20 percent its contribution to the company's overall sales by 2016," Peterson said.

The company did not break down its huge investment plan by region, but it said it will step up efforts to boost presence in the Asia-Pacific region, particularly the Chinese market, which is seeing rapid agricultural growth.

"In order to make sure that our products are suitable for local uses, we have invested quite a bit of development money in countries including China," said Lykele van der Broek, chief operating officer at Bayer CropScience.

"Agricultural growth in China will continue to be high despite the overall economic slowdown," he added.

He said the company is expecting greater growth in China as agricultural productivity in the world's most populous country and its demand in food and energy continue to increase.

The main business of Bayer CropScience in China so far has been focusing on the areas of seed insecticides, herbicides and fungicides.

The company has raised its business outlook for 2012, predicting its global sales to increase by 10 percent this year, with profitability improved by 20 percent, according to Peterson.

In 2011, Bayer CropScience posted revenue of 7.26 million euros globally, an increase of 6.2 percent from the previous year.