Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 16 2017-2018 1.3.1.4. The development of non-food needs Parallel to the market for food, the development of industrial applications that exploit agricultural production can strengthen the potential for growth of the seed market. These applications especially concern: plant chemistry – also known as “green chemistry” – including the market for biodegradable plastics, and agrofuels, particularly ethanol, produced from corn, and representing 38% of corn applications in the United States. The expansion of these markets, still modest in size, can have a positive influence on the volume of activity in commercial seeds. Consequently Vilmorin & Cie remains attentive to the evolution of these markets. 1.3.2. An essentially growing seed market The world market for seeds, the value of which was estimated to be around 39 billion USD in 2017, posted average annual growth of almost 1% over the past 5 years (Source: Phillips McDougall 2018) . 1.3.2.1. The vegetable seeds market The value of the world market for vegetable seeds was estimated to be at around 5.4 billion USD in 2017 (Source: Phillips McDougall 2018) . This market was temporarily tougher during fiscal year 2017- 2018 in certain regions, because of the impact of several short-term difficulties, especially high inventories with distributors worldwide, particularly in North America. Nevertheless, this in no way calls into question the fundamentals of this market, the development of which is driven by the regularly increasing world consumption of vegetables. This is a consequence of the rising world population, and the evolution of the food habits of consumers who have become more aware of the importance of a well-balanced, varied diet. Greater use of commercial seeds in developing markets, and the increase in the use of seed technology in the more mature markets, are also contributing to global growth in the sector. World market for commercial seeds 2017 Source: Phillips McDougall 2018. Market value 39.4 billion USD 54.3 % 13.8 % Vegetable seeds (conventional seeds) GM* field seeds 31.9 % Conventional field seeds Analysis of the market (in value) by geographical area (in billions of USD) Market value 39.4 billion USD 17.4 NORTH AMERICA 8.3 SOUTH AMERICA 0.7 AFRICA MIDDLE EAST 7.2 EUROPE 5.8 ASIA Biodiesel 0 5 10 15 20 25 30 35 40 45 2007 2017 2027 (predicted) Ethanol 2027 (predicted) 2007 2017 0 20 40 60 80 100 120 140 Source: OECD-FAO outlook. EU 28 United States Brazil Indonesia Argentina Thailand China India Others Evolution of the world production of agrofuels ((in billions of liters) 1.3. The seed market