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VIEW FROM THE TOP
SYNGENTA SEEDS PLANS TO CHANGE THE RULES OF ENGAGEMENT
Editor's Note: John Sorenson is president for Syngenta Seeds, North America, Golden Valley, Minn. Previously, Sorenson served as head of Syngenta's vegetable seeds business in North America.

AM: Prior to this appointment you were the head of the vegetable seeds business. How are the sectors different? Will Syngenta's emphasis be the same for each sector?

JS:
Syngenta Seeds is composed of four separate business units in North America - Corn and Oilseeds, Vegetables, Flowers, and Sugarbeets. Each of them is unique. Vegetable and flower markets are fragmented, and each market segment is relatively small. Both businesses are driven to an increasing extent by consumers, and both use breeding approaches that are qualitative. It's not only about yield, but also flavor, appearance, ability to maintain freshness, etc., making the product development process complex. Corn, soybeans and sugarbeets, on the other hand, are all about yield, or at least about factors that influence yield. The product development process is large-scale and statistically oriented - big numbers win.

There are a few critical success factors that are common across all of the businesses. Product performance, controlling inventory levels and production costs are key. The levels of competition are intense, and the differences in performance from one product to the next are getting smaller. Finally, each of these sectors is stuck in a business model that needs to change. The rules that used to work for the industry don't work anymore. In the medium term, those companies that survive will be the ones that can innovate in the way they convert their genetics into profits.

AM: What are your immediate goals and objectives for Syngenta Seeds? What is the most critical factor in successfully achieving these goals?

JS:
My medium-term goal is to redefine all of the four businesses to create an exceptional record of profitable growth despite the difficult market conditions. Doing that will require managing the fundamentals of the businesses exceptionally well, being the best at changing the rules of engagement in the marketplace and creating new approaches to the basic business models. We'll be doing a lot of inventing!

Success will require three things - toughness in using every investment dollar wisely, extraordinary creativity in redefining the businesses and a heavy dose of courage. The next few years will be painful for the timid but ought to be outrageously exciting for those who are willing to be bold.

AM: How is Syngenta getting involved in pharmaceutical applications of traditional crops?

JS:
We believe there will be huge opportunities and some huge challenges in this area. It turns out that plants are amazing chemists, and they can easily produce complex chemicals that are costly, difficult or even impossible to produce in a test tube or a factory. Syngenta will be one of the leaders in this field, and we are developing a portfolio of intellectual property, technology and alliances that will put us in a strong position to achieve big things.

There are many challenges in doing all of this in a way that manages the risks that can be associated with producing pharmaceuticals in plants, and we will bring our expertise to bear in developing this vast potential safely and responsibly. The integrity of the food chain simply cannot be compromised, and it is our intent to manage the science and stewardship in a responsible manner. I firmly believe that tremendous goodwill will come to developed and developing nations alike from the improved healthcare possible with plant-produced pharmaceuticals.

AM: What are some of the biggest challenges facing the agriculture industry in the short term?

JS:
The challenges are big, and they are going to be with us for a while. In every sector our growers are in heavy financial distress. There are many factors that contribute to that, but perhaps none is more potent than the globalization of supply. As more countries become exporters into the global supply, the whole system becomes less sensitive to the laws of supply and demand. We can expect to see chronic oversupply for the foreseeable future. Many of our traditional export markets now are being satisfied by other countries. Prices at the farm gate will continue to be depressed, and there is no truer rule of marketing than the one that says if your customer is in financial trouble, your life will be difficult as well. AM


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