Proceedings of the Fifth Asian Regional Maize Workshop - Search ...

This strategy has not worked for many MNCs. Firstly, because the time element in converting
technologies into products has taken much longer than originally envisioned. secondly, there has
been a confl ict between the entrepreneurial management style of Slll811 companies vs. the hierarchial
and in most cases bureaucratic style of most MNCs. Thirdly, the learning curve has been
longer and more complex than expected and has lead to poor financial performance. Lately, foiI'Cs
have come to realize that the seed business is different than the chemical or pharamaceutical
business. Unlike chemicals, 8 variety cannot be marketed globally, but only in agroclimatic
regions similar to where it was developed. Most toties are dissatisfied with the payoff in the
seed business to date. It is expected that as chemical oompanies exit from the seed industry,
the acquired businesses are likely to revert back to the "genuine seedsmen". In the late 1980's
and early 1990'S, many multinationals began to divest their seed business and are still in the
process of doing so (Table 2).
Table 2. The seed industry divestment mania - 19905 (selected examples).
Multinational
Divested oompany
Arco Chemical
British Petroleum
British SUgar
Pfizer
Shell
Orsan
Rohm & Haas
Elf Acquitaine (sanofi)
SUnseeds
Edward J. Funk
Germain's, W.L. Research
3~ interest in Dekalb Plant Genetics
Nickerson International Seed Co., Ltd.
Wilson Hybrids, Western Plant Breeders
Rohm & Haas Seeds, Inc.
Dahlgren, Rustica
Today there are essentially two broad divisions (Table 3) within the global seed indUstry,
namely:
- the Hybrid seed sector, and
- the Non-Hybrid seed sector.
The hybrid seed industry is characterized by high R&D costs, high prices, high margins, and is
primari ly controlled by the private sector in both developed and developing countries. The nonhybrid
seed industry is characterized by low R&D costs, low prices and low margins, and is
primarily in the public domain in developing countries and in the private sector in developed
countries.
Table 3.
Seed industry characteristics in high, middle and low income countries.
Industry High Income Middle Income Low Income
HYBRID
· Volume high medium low
· Value high high high
· Margins high high high
· Sector private - private publtc and private
· Stage of Development mature growth embryonic
NON-HYBRID
· Volume high high high
· Value low low low
· Margins low low low
· Sector private public and private public
· Stage of Development growth embryonic embryonic
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