Syngenta International AG

Schwarzwaldallee 215
Basel,
Switzerland
Telephone: ( + 41 061) 323 11 11
Fax: ( + 41 061) 323 12 12
Web site: http://www.syngenta.com

Public Company
Incorporated: 2000
Employees: 22,364
Sales: $8.1 billion (2005)
Stock Exchanges: Swiss New York
Ticker Symbols: SYNN; SYT
NAIC: 325320 Pesticide and Other Agricultural Chemical Manufacturing; 111421 Nursery and Tree Production

Syngenta International AG is the world's leading pureplay agrochemical company, operating in two primary markets: Crop Protection and Seeds. Syngenta holds the global lead in the crop protection market, producing a strong lineup of selective and non-selective herbicides, fungicides, and insecticides as well as a range of products for the professional sector. Major brand names in Syngenta's crop protection portfolio include Callisto, Actara/Cruiser, Topik, Touchdown, Dual Gold, Gramoxone, Amistar, Bravo, Gotvr, Kstsyr, Ptovlsim, Dividen, Heritage, Icon, and Dynasty. Crop protection remains Syngenta's largest division, accounting for nearly 78 percent of Syngenta's sales of $8.1 billion in 2005. Europe, including Africa and the Middle East, accounts for 36.5 percent of group sales, while NAFTA adds nearly 33 percent. The remainder is shared between the Asian Pacific and Latin American markets. Syngenta's Seeds division operates in two core categories, field crops and vegetables and flowers. The company markets over 1,000 field crop varieties, is the world's leading producer of sunflower seeds, and the third largest producer of corn and soybean seeds. The smaller flower and vegetable segment is nonetheless the world's leading producer of flower seeds, and the second largest producer of vegetable seeds, with a focus on 14 major vegetable crops, including tomatoes, cucumbers, cabbage, peppers, melons, watermelons, sweet corn, and beans. The company's field crop seed brands include NK, Garst, and Golden Flower, while vegetable and flower seeds are marketed under the S&G and Rogers brands. Syngenta has also been stepping up its biotechnology component in order to build its position in the market for genetically modified seeds. Among the biotech products in its pipeline is Syngenta's own glyphosate-tolerant corn, in response to the massive success of Monsanto's Roundup Ready. In October 2006, Syngenta also received approval to market its new corn rootworm trait, Agrisure RW, in the United States. Syngenta, created in 2000 through the merger of the agrochemicals operations of Novartis and AstraZeneca, is listed on the Swiss and New York Stock Exchanges.

FORMING AN AGROCHEMICALS
GIANT IN 2000

Founded in 2000, Syngenta nonetheless traced its origins to the beginnings of the modern chemical and pharmaceuticals industries. The merger of the agrochemicals operations of AstraZeneca and Novartis brought together the operations of a number of the most important names in corporate history in general, and in the chemicals and pharmaceuticals industries in particular. Novartis, for example, was itself the result of a merger among three leading Swiss chemicals pioneers, Ciba, Geigy, and Sandoz. For its part, AstraZeneca had been created in the late 1990s through the combination of Sweden's Astra and Zeneca, created as a spinoff from Imperial Chemicals Industries (ICI) in the early 1990s.

Like most companies in the chemicals and pharmaceuticals sectors, the forerunners to Syngenta had all diversified in a variety of areas, including agrochemicals. The formation of ICI in 1926, for example, included the operations of Brunner, Mond & Company Limited. That company had been founded in 1873 in order to produce soda ash, growing into one of the United Kingdom's leading fertilizer producers. In 1928, ICI expanded its agrochemicals business through the creation of a Agricultural Research Station in 1928.

Into the 1930s, Geigy, then the weakest part of the Basel AG cartel with Ciba and Sandoz, had begun developing an interest in agrochemicals, and particularly pesticides, in the 1930s as well. That company launched its first pesticide production in 1935. By 1939, a researcher at Geigy had developed a new and revolutionary pesticide, called DDT.

DDT helped to save Geigy from collapse after the Basel AG cartel was abolished in 1951. By the end of the decade, the pesticide had become a major international success. By then, too, Geigy had developed a new class of herbicides, based on triazine, further establishing the company among the leaders in the agrochemicals industry.

ICI had also become an active player in that industry. The company developed its own seeds business through its Plant Production Limited joint venture, created in 1937. ICI's research and development efforts led to the discovery of new herbicides, including MCPA and 2,4-D, based on alphanapthylacetic acid. Another set of chemicals developed during World War II provided the basis for a new class of herbicide, including paraquat and diquat, launched in 1954.

Through the 1970s, the global agricultural chemicals market expanded rapidly, playing an important role in the massive productivity increases exhibited by the agricultural sector. The extraordinary population boom then taking place across the globe, which saw the world population more than double in the second half of the 20th century, created a corresponding demand for evergrowing food supplies. The agrochemicals market attacked this problem from several directions, developing new pesticides and herbicides on one hand, and new seed varieties on the other. The intensely competitive market, and the increasing costs of developing and marketing new chemicals and seed varieties, in turn sparked the consolidation of the agrochemicals market.

Ciba and Geigy played the role of pioneers in this consolidation, merging their operations as early as 1969. Following the merger, the company, which had up until then focused its agricultural operations on the crop protection side, entered the seeds business as well, buying up Funk Seeds International, based in the United States in 1974. The company's crop protection operations also performed strongly, resulting in the launch of Dual, part of a new generation of "selective" herbicides, capable of destroying weeds while leaving field crops unharmed. By the 1980s, Ciba-Geigy had also developed a new fungicide, Ridomil. The company had also launched a biotechnology division, the benefits of which extended beyond Ciba-Geigy's core pharmaceuticals business to its agrochemicals operations as well.

COMPANY PERSPECTIVES

We believe in delivering better food for a better world through outstanding crop solutions, and we take pride in meeting our commitments to our stakeholders. Our goal is to be the leading global provider of innovative solutions and brands to growers and the food and feed chain.

In the meantime, other members of the future Syngenta were boosting their agrochemicals expertise. Sandoz, which had established itself as a leading pharmaceuticals group during the 1950s, was undergoing its own growth spurt in the 1970s, more than quadrupling in size. During this period, Sandoz gained a leading position in the worldwide seeds market, completing a series of acquisitions, starting with Rogers Seed Co., in the United States, in 1975, and continuing with Northrup King in 1976, and the Dutch Zaadunie Group in 1980. By the end of the 1980s, Sandoz had become a world leader in the seeds market, a position further heightened by its purchase of Hilleshög, based in Sweden, in 1989. Towards the middle of the 1990s, however, the worldwide pharmaceuticals industry had launched a new wave of consolidation, further reducing the pool of companies to a small number of powerful, large-scale businesses. Given the shared history and similar operational profile, Sandoz and Ciba-Geigy appeared a natural fit, and in 1996 the two companies merged in what was then the world's largest-ever merger, valued at more than $70 billion. The new company was renamed Novartis AG.

ICI's agrochemicals operations were also expanding during this time. The company set up ICI Seeds in 1983 as part of an effort to develop seed-breeding capabilities in-house. Two years later, ICI's pesticides division had a new success with the launch of its Karate insecticide. In the late 1980s, ICI further boosted its agrochemicals operations with the acquisition of Stauffer Chemical Company in the United States in 1987. Into the early 1990s, however, ICI's highly diversified operations had left it unable to respond quickly enough to the rapid globalization of many of the world's industries. In 1993, therefore, ICI restructured, spinning off its pharmaceuticals, agrochemicals, and specialty chemicals operations into a new company, called Zeneca Agrochemicals. By 1994, Zeneca had become a fully independent company. Just five years later, Zeneca joined the pharmaceuticals industry consolidation movement, merging with Sweden's Astra to form AstraZeneca AB.

ENGINEERING SUCCESS IN THE
NEW CENTURY

The creation of AstraZeneca led to discussions between the new pharmaceuticals and chemicals giant and rival Novartis, and by the end of 1999, the two companies had agreed to spin off their agrochemicals operations into a new company, named Syngenta. The merger, completed in November 2000, also established the first "pure play" agrochemicals giant, with operations exclusively grouped around two core divisions, crop protection and seeds. Of the two, crop protection, including herbicides and insecticides, remained the company's largest division, accounting for more than 85 percent of its revenues and placing the company as the global leader. The group's seeds operation, although smaller, retained a respectable third place position worldwide, in large part because of Novartis's 1997 acquisition of Merck's seed business.

By 2002, the merger between the two agrochem giants had been declared successful, surpassing most of the group's initial targets. The company had continued to tack on to its business, buying out its Japanese joint venture partner to take full control of Tomono Agrica in 2001, then buying up French seed group CC Benoist. In 2001, also, the company expanded into China, opening up a facility to produce its crop protection products. These include its newest success, the corn herbicide Callisto, which received U.S. approval that same year.

Yet Syngenta found its core crop protection under growing pressure, as the rising tide of genetically modified crops began to affect its sales. More resistant than traditional crops, the new GM crops required lower dosages of herbicides and pesticides, while also producing higher yields. Syngenta recognized that the future of the agrochemical industry lay as much in the development of newer seed varieties.

Into the mid-2000s, the company launched a new effort to boost its seeds business, and especially its biotechnology driven operations. In 2004, for example, Syngenta acquired the corn germplasms and other cornbreeding materials from CHS Research LLC in the United States. Another major boost in the group's seeds operation came in May of that year, when Syngenta reached an agreement to acquire the NAFTA operations of Advanta BV, a major seed company jointly owned by AstraZeneca and Royal Cosun of the Netherlands. Syngenta paid EUR 400 million for Advanta, which added nearly as much to the company's annual seeds revenues and also gave it control of major U.S. seeds brand Garst.

In July of that year, the group boosted its global position, and especially its position in the United States, with the acquisition of Golden Harvest. That purchase, which cost Syngenta $180 million, further cemented the company's rise as the major challenger to U.S. leader Monsanto.

KEY DATES

2000:

Novartis and AstraZeneca spin off their agrochemicals and seeds operations to create a new company, Syngenta International.

2001:

Syngenta opens manufacturing operations in China; acquires French seed company CC Benoist and takes full control of Tomono Agrica in Japan.

2004:

Company acquires NAFTA operations, including Garst Seeds, for EUR 400 million; acquires corn germplasms and materials from CHS Research; acquires Golden Harvest seeds business, based in the United States; acquires GA21 glyphosate tolerance technology from Bayer CropScience.

2006:

Company acquires Emergent Genetics Vegetable in Denmark; announces plan to expand Chinese manufacturing operations; acquires lawn and garden specialist Conrad Fafard in the United States.

The rivalry between Syngenta and Monsanto had moved into a new phase when Syngenta reached an agreement with Bayer CropScience, acquiring its corn glyphosate tolerance technology, GA21. Although contested by Monsanto, which sought to maintain control of the GM corn market with its Roundup Ready seeds, the acquisition enabled Syngenta to begin preparation to launch a new range of biotech-based corn and soybean traits. By 2006, Syngenta had cleared the last hurdles and was given permission to launch its new biotech lineup for the 2007 season.

As it moved into the second half of the decade, Syngenta had come into its own as an agrochemicals leader, boasting the world's largest crop protection operation, and becoming a challenger for the top spot in the global seeds market as well. The company showed no signs of slowing down in its race to outpace its rivals. By the end of that year, the company had reached agreements to acquire Emergent Genetics Vegetable, based in Denmark, a producer of seeds for spinach, cabbage, and cauliflower. The company also announced its intention to expand its Chinese manufacturing operations in support of the rapid growth of the Asian region agrochemicals market. The company also added to its North American business, buying up the lawn and garden specialist Conrad Fafard Inc. Syngenta had found the formula for fast growth in the new century.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

O.O.O. Syngenta (Russia); Syngenta (China) Investment Co., Ltd.; Syngenta Agribusiness S.A. (Chile); Syngenta Agro GmbH (Germany); Syngenta Agro S.A. (Argentina); Syngenta Agro S.A. (Spain); Syngenta Agro S.A.E. (Egypt); Syngenta Agro S.A.S. (France); Syngenta Asia Pacific Pte. Ltd. (Singapore); Syngenta Corporation (U.S.A.); Syngenta Crop Protection A/S (Sweden); Syngenta Crop Protection Canada, Inc.; Syngenta Crop Protection Ltd. (Hong Kong); Syngenta Crop Protection Ltd. (Thailand); Syngenta Crop Protection NV (Belgium); Syngenta Crop Protection Pty Ltd. (Australia); Syngenta Crop Protection S.p.A. (Italy); Syngenta Crop Protection UK Ltd.; Syngenta Crop Protection, Inc. (U.S.A.); Syngenta Crop Protection, Lda (Portugal); Syngenta Czech s.r.o.; Syngenta Hellas AEBE (Greece); Syngenta India Ltd.; Syngenta International AG; Syngenta Japan K.K.; Syngenta Korea Ltd.; Syngenta Maroc S.A.; Syngenta Pakistan Ltd.; Syngenta Proteção de Cultivos Ltda (Brazil); Syngenta S.A. (Colombia); Syngenta Seeds (Beijing) Co., Ltd. (China); Syngenta Seeds A/S (Denmark); Syngenta Seeds B.V. (Netherlands); Syngenta Seeds Canada, Inc.; Syngenta Seeds NV (Netherlands); Syngenta Seeds, Inc. (U.S.A.).

PRINCIPAL COMPETITORS

Bayer CropScience AG; BASF Aktiengesellschaft; Dow Europe GmbH; Agan Chemical Manufacturers Ltd.; Monsanto Co.; Sumitomo Chemical Company; Nufarm Limited; Arysta LifeScience Corporation.

FURTHER READING

Burchett, Andrew, "Hot Competition: Syngenta Races After Monsanto," Top Producer, September 2004, p. 19.

——, "Syngenta Grows," Farm Journal, November 29, 2004.

De Guzman, Doris, "DuPont Joins Forces with Syngenta to Cooperate on Biotechnology," Chemical Market Reporter, April 17, 2006, p. 5.

Marcial, Gene G., "How Syngenta's Garden Grows," Business Week, March 13, 2006, p. 96.

"Novartis, Zeneca to Form 'Pure Play' Agribusiness," Western Farm Press, December 18, 1999, p. 10.

Robinson, Simon, "Syngenta to Buy Brassica Seed Firm," ICIS Chemical Business, June 12, 2006, p. 8.

"Syngenta Acquires Seeds Firm," Chemical Week, May 31, 2006, p. 9.

"Syngenta Adds Facilities in China," Chemical Week, March 8, 2006, p. 5.

"Taking the Fear out of 'Genetically Modified,'" Business Week, July 5, 2004.

Wenzel, Wayne, "Syngenta's Growth Spurt," Farm Journal, May 13, 2006.