Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 48 2017-2018 1.6.4.3. Wheat seeds: becoming the world reference for the most widely grown crop in the world Consolidating the leading position in Europe As the European leader for straw cereals (wheat and barley), Vilmorin & Cie is empowered by its historical expertise and high- quality genetic resources* obtained through acquisitions and specialized partnerships. Today it holds around 12% of the wheat market in Europe with market shares exceeding 20% in certain countries. Vilmorin & Cie’s ambition is to maintain and strengthen its position as leader in Europe. In particular this involves the creation of varieties that meet farmers’ needs even better, and the strengthening of its genetic resources* on a case-by-case basis. Contributing to the conversion of the market into one of high value seeds Wheat is the most widely grown cereal in the world with almost 220 million hectares in 2017 (Source: USDA) , and is the staple food for one third of the world’s population. In order to satisfy constantly increasing food needs, the world production of wheat needs to increase by 60% before 2050. Yet wheat is suffering from low yields, and this represents a serious risk for the world’s food balance. This situation can be explained by a major lack of innovation for this crop with very complex genetics and consequently the really low use of commercial seeds. The seeds industry is thus working to come up with more efficient seeds, guaranteeing a better performance, particularly in terms of yield and a better potential for different uses. Vilmorin & Cie is particularly well positioned to contribute to the conversion of this market into a seed market that offers high yields as a result of genetic progress, with the development of hybrid* seeds. Progressively conquering new regions and developing solid international partnerships From its position of excellence in Europe, Vilmorin & Cie has all the benefits required to stand out as the world reference for this strategic crop. Targeting the main wheat production areas, i.e. the Americas, Australia and Asia, its particularly dynamic conquering strategy is aimed at the constitution of a portfolio of genetic resources* perfectly adapted to local climatic conditions, with access to, and the development of innovative technologies and the setting up of new distribution networks. The United Stated represented the first major objective for Vilmorin & Cie. Launched in 2009, its wheat seed development plan for this zone, deployed by the Business Unit Limagrain Cereal Seeds, means that it now has an efficient platform to distribute high yield seeds. In this respect, through the implementation of the cooperation agreement with the Colorado Wheat Research Foundation and the company Albaugh, signed at the beginning of 2016, Vilmorin & Cie reached a new stage in its development of this crop. This agreement, which targets the development and distribution of wheat varieties with a non-GM trait* conferring resistance to a generic herbicide, also involves an exclusive license granted to Vilmorin & Cie, with the commitment to deploy the use of the technology outside the United States. This information is presented in detail on pages 30-31. Vilmorin & Cie is pursuing its development on the Canadian market, initiating its presence in this country in July 2015, with the creation of a joint venture devoted to research and the development of new cereal varieties, with a special focus on wheat, with the Canadian seed company Canterra Seeds. This operation is the consequence of changes to Canadian legislation which, in the coming years, will result in the application of a system of royalties* on wheat seeds, and provide direct remuneration to research. Canada will therefore be positioned among the top world players for this crop. This information is presented in detail on pages 30-31. Australia is an extremely important market for wheat seeds, and already has an efficient royalties* collection system. Since 2008 Vilmorin & Cie has benefited from a strategic partnership with the company Australian Grain Technologies (AGT), the Australian leader for the breeding*, development and distribution of innovative wheat varieties, which holds more than 45% of market shares. It also benefits from existing agreements with the two wheat research leaders in Australia – ACPFG and CSIRO (1) – to develop wheat optimizing the use of nitrogen adapted to local conditions. At the same time Vilmorin & Cie is pursuing its strategy to internationalize its positions on other major markets. These include South America and Asia, a major market in terms of acreage and wheat production. Finally, in southern Africa, the company Seed Co, in which Vilmorin & Cie holds a minority stake, also owns and develops wheat seed activities. (1) ACPFG: Australian Centre for Plant Functional Genomics. CSIRO : Commonwealth Scientific and Industrial Research Organisation. 1.6. Strategy and perspectives