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Bayer CropScience Steps Up Investment Plans
Bayer CropScience September 9, 2013 Bayer CropScience is on track to grow annual sales toward EUR 9 billion in 2013 and toward EUR 10 billion in 2015. “Since 2007 we have continuously expanded our business with record sales, and we are optimistic about the future development,” said Bayer CropScience CEO Liam Condon at the company’s annual press conference in Monheim, Germany. Against the background of strong demand for its products, the company is adding EUR 1 billion to its investment program, bringing total capital expenditures for the period 2013 to 2016 to approximately EUR 2.4 billion. As a result of the accelerated investment program, the production volume of key active ingredients for crop protection products is expected to increase significantly. “Many industries today are facing overproduction. At Bayer CropScience, we are in a completely different situation: A growing global population, changing diets and increasing weather volatility are affecting food supply and need to be addressed today,” said Condon. “Demand from farmers for our products is increasing so strongly that we’re significantly stepping up our supply chain capacity to serve farmers around the world with much needed innovative agricultural solutions,” added Liam Condon, describing the challenge: “About 900 million people remain hungry today and the world population is growing strongly. We need to raise agricultural productivity and at the same time advance sustainability in farming and ensure protection of the environment. We aim to achieve this by developing innovative solutions and services that can help agriculture to contribute to the healthy development of society.” About EUR 380 million investment in new glufosinate-ammonium plant in the United States One integral element of Bayer CropScience’s investment plans is the construction of a new plant in Mobile/Alabama for the production of the herbicide glufosinate-ammonium, marketed in the United States under the brand name Liberty. The start-up of the new plant is anticipated probably for the fourth quarter of 2015, in time for the 2016 growing season. “With about EUR 380 million earmarked for this new facility, this is the biggest single construction project in the history of Bayer CropScience,” said Condon. Along with capacity expansion projects currently under way at other sites, this new facility will contribute significantly to the company’s target of more than doubling global product supply for this important active ingredient. The increased production of Liberty will help to fight weed resistance, a key challenge for modern agriculture. Liberty is the only non-selective herbicide that controls weeds resistant to the most used herbicide, glyphosate. About 50 percent of the farmers in the USA have experienced weed resistance on their fields, and the situation is worsening further not only in the United States but also around the world. Bayer CropScience is addressing this problem with its unique expertise in R&D, the most diverse herbicide portfolio in the industry, diagnostics and monitoring, and by promoting an Integrated Weed Management (IWM) approach. IWM techniques such as crop rotation, the use of herbicides with different modes of action – glufosinate-ammonium being one of the cornerstones – and rotation of herbicide-tolerant traits help growers to manage or delay weed resistance, as no single strategy will be completely effective on its own. “Diversity is the key to sustainable agriculture,” stressed Condon. Expanding the Seeds business – building up strong positions in soybean and wheat In addition to the ramp-up of its supply chain capacity in Crop Protection, another element of the company’s growth plan is the implementation of its Seeds strategy. Bayer CropScience plans to further strengthen its position in established crops such as vegetables, rice, oilseed rape and cotton, and to build up significant market positions in soybean and wheat. “We are continuing to invest in our soybean business, for example through strategic acquisitions in Latin America, contributing to a fast and focused development of distinctive traits,” explained Condon, who highlighted the soybean cyst nematode trait currently under development at Bayer CropScience. He also announced the planned launch of the global Bayer CropScience soybean brand Credenz for late 2014 in North and South America. “Credenz soybean seeds will help us to deliver improved varieties to growers. It will offer future traits that could protect soybeans against specific insects, repel persistent attacks by nematodes, and make soybeans tolerant to the most effective herbicides,” said Condon. The company intends to significantly expand today’s soybean-related sales within the next decade. A second seed investment focus for the company is wheat, the world’s most important staple crop. Here, Bayer CropScience is building a leading global wheat breeding network, with the objective of developing high-yielding varieties adapted to local growing conditions. First varieties are expected to come to market in 2015. “Our business strategy is aimed at addressing the pressing challenges farmers are facing worldwide,” concluded Condon. “We will further strengthen both our CropProtection and our Seeds businesses, continue to sharpen our customer focus and foster innovation to strengthen our leading market position.” Continue reading
Old McDonald Had A … Good Investment
You’ve heard it a million times: invest in real estate because “they’re not making any more of it.” Often, that’s less than true. Manhattan hasn’t gotten any bigger, but its residential and office capacity has soared. It is more than true, however, for farmland: the number of arable acres per world population has been falling steadily since the 1960s. Many reasons for investing in farmland are screamingly obvious: it produces current yield with no interest rate risk; generates returns highly uncorrelated to the general financial markets; and protects holders from inflation. That’s why some folks like to call it “gold with a coupon.” But, are these reasons maybe too obvious? After all, larger institutions have been pouring money in to farmland for years, and per-acre prices have had a tremendous run over the past decade and more. Is too late for average investors to get in? I don’t think so. The reason is simple: the fundamentals still work. Properly acquired acreage still maps to a solid 4% yield, appreciation completely aside. That’s what you should expect from a cash lease on a quality property producing corn, wheat, and soybeans–irreplaceable elements of the worlds’ diet. (I’ll pass on handicapping almond and avocado farms). And 4% — without interest rate risk and with inflation protection — looks awfully good right now. Could land values fall and damage your total returns? Of course. But there are some awfully strong fundamental reasons that support even these recent higher prices. Most basic is the huge, rising, politically empowered middle class of the Middle East, Asia, and Latin America. One thing you can pretty much count on is that better diets will on the top of their agendas. And that means direct demand for grain staples, and also for animal protein, which depends on… those same staples. Indeed, one credible estimate says that if every person in China suddenly had two eggs a day, it would take the entire Canadian wheat output just to feed those overworked hens. But there’s another, pretty surprising, reason land values are unlikely to fall significantly, despite the recent run up. And it is: technology. Numerous innovations, from GPS-guided tractors to ever better seed stock to irrigation breakthroughs, are constantly increasing the yield a given acre can produce. To give just one cool example, some farms now plant seeds with gel packs that absorb and hold rainfall (that otherwise would run off or evaporate) until the plant needs it. So even if commodity prices do tumble, the land’s economic yield is protected by enhanced output over time, a spectacular natural hedge. And, of course, if do we continue to get the underlying appreciation that has fueled much of the +10% total returns of the past many years, so much the better. (A quick note on political and environmental risk: no, changes in the farm subsidy system– if any– are not likely to change the basic investment thesis here; and yes, crop insurance is a good safeguard against flood and drought). Now, the bad news. It’s not so easy to invest in farms. Do not think for a moment that investing in agricultural companies, or the ETFs that hold them, is a reasonable substitute. Those might be decent choices too, but they do not represent the same basic investment proposition as owning the land itself. And remember, we’re not “playing” a theme here looking for big gains- – we’re making a solid, yield-oriented, purchase-power-protecting allocation. So… where to look? There are numerous, high quality, mid-size investment partnerships out there with strong management teams and reasonable investment minimums. And some wealth management firms have excellent internal teams that will handle the property purchase and management for you through a separately managed account. In either case, you can expect to pay modest management fees, but the expertise is likely worth it. Or, you can go directly to one of many farm brokerages (easy to find online) and have at it… but make sure to watch a few episodes of Green Acres first. To learn more about this and other alternative investment topics, check out my new book, The Alternative Answer. And please follow me on Twitter @bobrice3. Continue reading
Eco2 Ltd. of UK to Implement Trimble’s Forestry Bioenergy Solution from Cengea
SUNNYVALE, Calif., Sept. 9, 2013 /PRNewswire/ — Trimble (NASDAQ: TRMB ) announced today that Eco2 Ltd. will be implementing its forestry bioenergy solution from Cengea , a Trimble Company and part of its Forestry Division. The Cengea solution will be used to manage Eco2’s supply chain operations for its state-of-the-art, straw-fired Sleaford Renewable Energy Plant in Lincolnshire in England. “Eco2 spent some six months reviewing the marketplace for integrated biomass supply chain solutions, and found that Trimble’s solution from Cengea provides the closest match with our application,” said David McDonald, operations director of Eco2. “With full implementation support and a hosted platform, we will be able to rapidly configure the software and integrate it with systems at the Sleaford Renewable Energy Plant. We look forward to working closely with Trimble and demonstrating the full capabilities of the system in the coming months.” About Eco2 Ltd. Established in 2002, Eco2 is a leading renewable energy project developer specializing in the initiating, developing, financing and operating renewable energy projects throughout the UK and Europe. Initially focused on onshore wind and landfill gas projects since 2006, Eco2 has concentrated on developing biomass projects. Over the last 20 years the management team has extensive experience in the development and construction of over 390MW of biomass projects throughout the world and the Eco2 Team has been involved in over 60 percent of the UK Dedicated Biomass Capability. For more information about Eco2, visit: eco2uk.com . About Trimble’s Forestry Division Trimble’s Forestry Division offers field hardware, field software and enterprise solutions that improve the productivity and operations for some of the world’s largest integrated forest product companies, forest land owners, international food processing companies and conservation organizations as well as small and medium-sized businesses and state and federal departments involved in soil, water and biodiversity protection. For more information, visit: www.trimble.com/forestry . About Trimble Trimble applies technology to make field and mobile workers in businesses and government significantly more productive. Solutions are focused on applications requiring position or location—including surveying, construction, agriculture, forestry, fleet and asset management, public safety and mapping. In addition to utilizing positioning technologies, such as GPS, lasers and optics, Trimble solutions may include software content specific to the needs of the user. Wireless technologies are utilized to deliver the solution to the user and to ensure a tight coupling of the field and the back office. Founded in 1978, Trimble is headquartered in Sunnyvale, Calif. For more information, visit: www.trimble.com . GTRMB SOURCE Trimble RELATED LINKS http://www.trimble.com http://eco2uk.com Continue reading
