Monsanto

Biotech Giant Pulls Out of Zimbabwe

The Daily News (Harare) 30jan04

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BIOTECH giant Monsanto—the world's leading producer of agricultural inputs—has pulled out of Zimbabwe by selling its business to a local consortium, citing the country's unstable economic environment, according to company officials in South Africa.

Monsanto, whose headquarters are in the United States of America, manufactures herbicides, seed brands and offers biotechnology to farmers in 52 nations, three of them in southern Africa.

Its Zimbabwean business has been sold to an unnamed consortium, with Monsanto saying it now wants to focus its resources in more stable countries on the continent.

Kobus Lindeque, the chief executive officer of Monsanto's operations in South Africa, who is also responsible for Zimbabwe, said his firm had negotiated with a local consortium to sell the company for an undisclosed amount.

He said the firm would now expand its operations in Malawi, where two senior employees from Zimbabwe were transferred last month.

"Monsanto is pulling out of Zimbabwe because it would like to focus its present resources in more stable countries within Africa," Lindeque said in response to questions from The Daily News.

"We are not relocating to Malawi, but simply expanding our business. Monsanto has been in Malawi for many years and has had a seed processing facility for many years."

It was not possible to secure comment from the new owners of the company.

Senior officials at the firm were said to be away and would only be back next Monday.

The relocation of Monsanto's local operation comes at a time when Zimbabwe is battling severe shortages of agricultural inputs, including seed.

The shortages, which have been affecting the country for the past two years, come at a time the government is pursuing a controversial programme to take over white-owned land in what it says is an attempt to redress colonial imbalances.

Farmers resettled by the government on seized land have been hit hard by the shortage of agricultural inputs, which has adversely affected farming output.

Production in the farming sector has also been cut by the government's land reform programme, which is criticised for allocating land to people without the financial resources to farm productively.

Monsanto is one of several companies that have relocated their operations to other countries in southern Africa, citing Zimbabwe's economic instability, also partly blamed on the decline of the agricultural sector, the backbone of the country's economy.

At least 600 companies, mostly in the manufacturing sector, shut down between 2000 and June 2003 because of the harsh operating environment, pushing up unemployment, now estimated at more than 70 percent.

Several foreign investors have also abandoned plans to enter the Zimbabwean market, citing macroeconomic instability and the erosion of law and order and property rights since the beginning of farm invasions in 2000.

Lindeque said Monsanto's operations in Zimbabwe concentrated on the production of hybrid seed as well as agro-chemicals. The seed is produced in Zimbabwe for local consumption only.

The agro-chemicals are imported from South Africa, but the company has been unable to import the materials in the past year due to foreign currency shortages.

Monsanto produced more than 1 000 metric tonnes of seed in Zimbabwe for that market only, and accounts for between five and seven percent of the market.

The firm entered the Zimbabwean market in 2000, after buying shares from local agriculture concern Cargill Zimbabwe (Pvt) Limited at a time the company's turnover was $400 million.

source: http://allafrica.com/stories/printable/200401300142.html 6feb04