Monsanto Tries to Stem its Decline

Financial Times (London)
February 6, 2003
Monsanto Takes GM crusade to Brazil
By CAROLINE DANIEL

CHICAGO, IL

Monsanto's interim chief executive will go to Brazil in early March to try
to persuade the government of the benefits of genetically modified (GM)
crops in its campaign against hunger.

The company, which has the biggest stake of any agricultural company in
biotechnology, has been seeking approval for its RoundUp Ready soyabeans in
Brazil for some time. Although Monsanto received initial approval in 1998,
progress since then has been stalled by the Brazilian courts. Last year one
judge ruled in favour of acceptance, but the other two judges have failed to
issue an opinion. "Brazil is very key for us," said Frank AtLee, chairman
and interim chief executive. "The new government has talked about being
opposed to biotech. However, it has a major interest in feeding the hungry
people of the country. This is a very dynamic situation. We are working very
hard with the government to demonstrate our products can help them."

His visit to Brazil comes as President Luiz Inacio Lula da Silva last week
launched an ambitious campaign to eradicate famine. However, US government
efforts to help Africa tackle its famine with free GM food have so far been
resisted.

Mr AtLee said Monsanto has not included any biotech revenues in its numbers
for Brazil this year. He was also sceptical about progress in Europe. "My
view is the authorities tell us they want to get the process started, but
very little happens. So now we have the US government looking at a WTO suit
- yet food companies in Europe are trying to get traceability and labelling
which we think is not right. So we have a real political quagmire to go
through in Europe."

The problems with biotech acceptance come amid declining sales for
Monsanto's traditional RoundUp herbicide, its flagship product. Sales of
RoundUp, which has come off patent in the US, and other non-selective
herbicide products fell 24 per cent in 2002 to Dollars 1.8bn.

Total 2002 sales fell 14 per cent to Dollars 4.7bn. Net losses were Dollars
1.7bn, or Dollars 6.45 per share, against net income of Dollars 295m, or
Dollars 1.12 per share. The 2002 results included a loss of Dollars 6.94 per
share for a goodwill impairment.

However, sales of genetic traits and seeds in the fourth quarter helped
Monsanto deliver net income of Dollars 61m against a net loss of Dollars
104m.

In December Hendrik Verfaillie, chief executive, resigned, amid concern
about performance over the past two years, which included two profit
warnings. Monsanto said the search for a replacement would take a further
four to six months. Hugh Grant, chief operating officer, is one of the
candidates.

Mr Grant said Monsanto had lost share in the US for RoundUp to international
rivals, such as Syngenta. "We saw Syngenta end the year with 7-10 per cent
market share, with some fairly aggressive pricing".

Monsanto shares were down 1.7 per cent at Dollars 17.35 in early trading.