"Hybrid breeding is the
key to profitability"

How do you feel after your first six months on the EXB?

It has been a personal challenge and an amazing growth opportunity. When you step into an existing team and the team receives a new member, this of course triggers different dynamics. For me, a big challenge, in addition to the language, has been to adjust my “flying level” a bit while at the same time staying grounded and true to myself. The war in Ukraine, Covid and the overall macroeconomic situation has kept us focused on responding promptly to these challenges.

The main markets in South America – Brazil and Argentina – are markets with genetically modified organisms, which, compared to Europe, presents an additional challenge as we need to incorporate traits for insects and herbicide tolerance within our germplasm. Every time we introduce a new trait, we need to transform our portfolio of hybrids. Thanks to the excellent work of Breeding and Agroservice, the most recent transformation went very well, and we have been able to quickly come into the Brazilian market with very stable and high-performing products.

And what about Argentina?

In Argentina the situation is slightly different, as the market is highly competitive and more consolidated. The necessary maturity has bigger overlaps with the North American breeding programs of our main competitors. The market is growing in the north of Argentina and outside of the traditional corn growing region in the center of the country. In the upcoming years, we need to intensify our breeding efforts to offer optimally adapted products for these conditions.

How important is it to sell our own hybrids in South America?

As a breeder, having your own germplasm in the market is key for your profitability and to therefore be able to continuously re-invest in your breeding programs. There are times, for example when you are introducing a new trait, when you might have to rely on licensing to close a gap in your portfolio, but the strategy should be to move away from germplasm licenses as quickly as possible.

What are the differences in the markets in this respect?

In Argentina and Chile, we have hardly used any licensed material and therefore we have been able to maintain favorable margins.

In Brazil, the team had to conduct a huge transformation in all business areas over the last 10 years, ranging from breeding to production and marketing and sales. Our portfolio has not been the exception; we have quickly moved from former Monsanto traits and germplasm to a Syngenta trait platform mainly based on the latest insect resistance “VIP3” and co-hybrids (in which one parental component of the hybrid is licensed).

This year, we have launched a new 100% proprietary hybrid in Brazil, K7510VIP3. The launched volume is 140,000 bags, and we expect to go above one million in the upcoming years. This should boost our profitability in Brazil.

How important is the financial aspect in our South American markets?

Part of the challenge in South America is to create sufficient profit to sustain our breeding progress and finance our operations in these volatile markets, which consequently have high interest rates on working capital. In other words, we need to improve profitability and liquidity – otherwise all our efforts will be eaten up by financial costs.

Back to Europe: You mentioned our silage and grain corn position. What are our main challenges here?

In silage corn, we are facing tough competition in our core markets of Germany and North Europe. We are very excited about our new portfolio which is being launched this year. Our breeders have solved problems of plant standability and we are focusing on high energy hybrids.

In grain corn, we are where we wanted to be for years. Our portfolio, which we started with hybrid varieties such as KWS Kashmir, is now highly competitive and confirmed by a pipeline of new products which are being brought into the markets. We have good reason to tell our customers to stay tuned and „#EXPECTMORE from KWS“.

Do you also have other crops in mind?

Yes, we are also making progress in our sunflower breeding program. While we are aware it is a long process, together with oilseed rape we see it is a perfect complement and synergistic product for our customers in East and Southeast Europe.

Ukraine is one of the largest producers of rapeseed and sunflowers. What impact does the war have on the people and on KWS?

Without a doubt, one of the key concern points in Europe is the war in Ukraine and its potential consequences in the region for our colleagues, farmers and the society overall.
We can already see a dramatic impact for the people in Ukraine, human nutrition, and commodity prices which were already heavily affected by weather conditions.
Continuing to make our contribution as breeders is key to supplying people with food, securing seed supply and making highest yielding genetics our main priority.

We had to pause halfway the extension of our seed production plant in Ukraine; we hope to be able to resume construction as soon as conditions allow it. |