A New Leaf.doc

conversesoilBiotechnology

Dec 3, 2012 (5 years and 1 month ago)

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Title:A new leaf.Authors:
Plishner, Emily S.
Source:
FW
; 9/26/95, Vol. 164 Issue 20, p16, 2/3p, 1
cartoon
Document Type:
Article
Subject Terms:
PLANT biotechnology industry
Geographic
Terms:
UNITED States
Company/Entity:
MONSANTO Agricultural Co.
Abstract:
Examines how
Monsanto

has been investing $8 billion
-
in
-
revenues in agricultural biotechnology, since 1985.
The vision of a three
-
phase
transformation producing annual growth in excess of 20% for more
than 20 years; An insect
-
resistant potato called NewLeaf; Planning to market bioengineered plant
qualities directly to the consumer.
Full Text Word Count:
484
ISSN:
0015
-
2064
Accession
Number:
9509
127662
Persistent link to this
record:http://search.epnet.com.floyd.lib.umn.edu/login.aspx?direct=true&db=buh&an=95091276
62Database: Business Source Premier
* * *

Section:
Company Watch


Monsanto

A NEW LEAF




How do you get a potato or a tomato to be all
that it can be? By bioengineering it to taste better
and be better for you.

And by focusing on such activities,
Monsanto

could become the only highly liquid, cash
-
positive biotech play around.

Sounds like too big a stretch for a company that has made its

living on chemicals, including
weed killers, carpet fibers and pharmaceuticals. But maybe not. Over the past decade, $8 billion
-
in
-
revenues
Monsanto

has all but bet the store on agricultural biotechnology, and it could be
about to pay off.

"The inflexion

point is next year". says BioScience Securities principal Sano Shimoda, who
thinks the big "if" will be commercialization.

It's definitely a long shot.
Monsanto

executives envision a three
-
phase transformation producing
annual growth in excess of 20% for

more than 20 years, and a big multiple boost.

In the first phase,
Monsanto

will market bioengineered seeds with superior agronomic traits to
farmers. The company is launching several products over the next year, including an insect
-
resistant potato calle
d NewLeaf and Roundup
-
ready soybean seeds, which have been
bioengineered to be all but impervious to the company's best
-
selling broad
-
spectrum weed killer.
Altogether, eight such launches are expected over the next four years and should begin helping
Monsa
nto's

bottom line in 1997.

In the second phase, look for
Monsanto

to be marketing bioengineered plant qualities directly to
the consumer. Early products here include the better
-
tasting tomatoes developed by soon
-
to
-
be
-
50%
-
owned Calgene, a high
-
starch pota
to that is more nutritious than the ordinary spud, and
soybeans bred for the traits that make high
-
quality soy sauce and tofu. Also expect brand
-
name
food products marketed along the lines of the company's hit low
-
cal sweetener, NutraSweet.

The third phas
e: biotechnology that turns plants into factories.
Monsanto

will design the seeds
and process the crops that will produce "biofuels," "biomaterials" and "oils to make
biodegradable plastics," says
Robert

Fraley
, president of the new Ceregen biotech busines
s unit.

Monsanto's

biotech expertise is in agriculture
--
mainly plugging exotic genes into familiar crops
-
-
and it has little competition. But execution is another matter. The first phase is easy, because
Monsanto

already knows how to market weed killers to

farmers, and the seeds are going to the
same customers.

However,
Monsanto's

record with consumers is uneven. Yes, NutraSweet and Wear
-
Dated
carpet are unqualified successes. But they are the exceptions. Then there is its hormone to
stimulate milk product
ion in cows, bovine somatotrophin, marketed under the brand name
Posilac, a financial success but a public relations disaster. Trouble may already be brewing for
Calgene's branded MacGregor's Flavr Savr tomatoes, which taste good enough to fly off grocery
shelves at a premium price but provoke prohibition
-
style "never" pledges from famous chefs
lined up by activist Jeremy Rifkin.

Don't call your broker just yet.

NYSE (MTC) 947/8, p/e 16, yld. 2.9%.

~~~~~~~~

By Emily S. Plishner