DuPont Gains Control of Africa’s Pannar Seed After DelayJack Kaskey
DuPont Co., the world’s second-largest seed company, completed its purchase of a stake in closely held Pannar Seed Ltd., overcoming an almost three-year delay to gain control of Africa’s largest producer.
DuPont’s Pioneer unit acquired 80 percent of Greytown, South Africa-based Pannar, Paul E. Schickler, Pioneer’s president said in a phone interview. Terms weren’t disclosed. The transaction, announced Sept. 15, 2010, required antitrust approvals in about a dozen countries, including South Africa, which initially rejected the takeover, Schickler said.
DuPont, based in Wilmington, Delaware, is expanding its seed business as part of Chairman and Chief Executive Officer Ellen Kullman’s focus on food, energy and safety. Combining Pioneer’s high-yielding corn with Pannar’s subtropical, disease-resistant hybrids will help increase yields on the 86 million acres available for corn production in Africa, Schickler said.
“This is about lifting the productivity levels of sub-Saharan farmers,” Schickler said in the interview. “Combining our research capabilities will deliver those better products faster than either of us could do on our own.”
Corn yields average about 2 tons per hectare in Africa, compared with 7 tons in Brazil and 10 tons in the U.S., Schickler said. Better seed, fertilization, weed control and other farming improvements may boost yields on the continent to as much as 6 tons a hectare, he said.
Pannar, established in 1958, sells seed directly to farmers in nine African countries, including South Africa, and sells through third parties elsewhere in Africa and in the U.S., Europe and Argentina. The company doesn’t disclose sales or earnings.
South Africa, with $350 million in annual seed sales, has the most advanced farms in sub-Saharan Africa, Schickler said. Tanzania and Mozambique are starting to develop commercial farms to supply feed for dairy and livestock operations, he said. More than half of South African corn is genetically modified to tolerate herbicides and control insects, he said.
Many African farmers are “small holders,” with just an acre or two to feed their family, who will benefit from improved seeds, Schickler said. Pannar will spend 20 million rand ($2 million) to help boost small-holder production, part of a commitment to South Africa’s antitrust regulators, he said.
Pannar also will spend 62 million rand by 2017 to create a technology hub in Delmas, South Africa, similar to seed-breeding research networks that DuPont established in Brazil, India and China, the companies said in a statement today. Monsanto Co. is the world’s biggest seed company.