US industrial giant eyes SA acquisition
17 September 2010
Pioneer Hi-Bred, a division of US industrial giant DuPont, is set to acquire a majority share in South African hybrid grain and seed producer Pannar Seed for an undisclosed sum.
Financial terms were not disclosed for the agreement, which is subject to review by the South African Competition Commission and other countries' regulatory agencies. Pending regulatory approvals, the deal is expected to close in early 2011.
"This is good news for our customers, for our employees and for South Africa," Pannar chairman Brian Corbishley said in a statement this week. "Pioneer is the ideal partner for the long-term growth of our business.
"They'll help us meet our customers' increasing needs for better and higher-yielding products and services."
Pannar management, employees, facilities and brands will be retained.
Mutual benefits
According to DuPont, the investment will allow each business to access additional crop areas, reach more customers and deliver improved seed products quicker than either can do on its own.
Pannar will receive access to Pioneer's genetics library and its maize breeding and biotechnology capabilities, which will benefit its African operations and its businesses in the United States and Argentina.
In return, Pioneer will tap into Pannar's expertise and reach across Africa, as well as its maize genetics, developed specifically for the region.
"Our respect for Pannar, their people and their products runs deep," said Pioneer Hi-Bred President Paul Schickler. "Together with Pannar, we can increase investments in innovative products and services for farmers across Africa. This will enhance productivity, improve food security, and grow our businesses."
Increasing crop yields
With approximately 30-million hectares available for maize production, DuPont says Africa represents a significant opportunity for improved productivity.
"Average grain yields are just one ton per hectare, less than one-third of what is achieved in other developing regions and only one-fifth of yields in developed countries," the company said.
In addition, maize seed demand is strong and growing, with annual hybrid maize seed sales totalling about US$250-million (about R1.7-billion) in South Africa alone.
"This investment is part of the DuPont strategy to deliver innovations that address some of the world's most important challenges, including the need for increased food production to feed the world's growing population."
SAinfo reporter
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