AVENTIS CropScience
StarLink Parent has Colorful History
Analysts are weighing fallout from StarLink
S.P. DINNEN / Register Business Writer 5nov00

 Few outside the farming community had heard of StarLink corn until September. Then StarLink, approved only for livestock feed, worked its way into the human food chain.  Suddenly the genetically modified corn's name is being spread worldwide by newspapers, radio stations and magazines. Consumers who have never set foot on a farm may now wonder whether it's in their taco shells or tortilla chips.  The company behind the name is Aventis SA, a huge pharmaceuticals and agrichemicals company based in France. Aventis sells the technology in the United States through Aventis CropScience, of Research Triangle Park, N.C. Aventis SA is a new company, the product of the December 1999 merger between old-time European manufacturing giants Rhone Poulenc SA and Hoechst A.G. Rhone Poulenc was founded in 1858 as an apothecary shop in Paris. By the early 1900s the company had developed a synthetic drug to combat previously untreatable syphilis. Hoecsht also traces its roots to the mid-19th century, when it started making chemicals in Germany. In 1925, it joined with drugmaker Bayer A.G. and chemical manufacturer BASF to become part of I.G. Farbenindustrie A.G.  I.G. Farben, as that company was known, was broken up by Allied forces after

World War II because of its involvement in producing gases used in Hitler's death camps. Neither Hoecsht, Bayer nor BASF was held responsible for I.G. Farben's wartime activities. The three were allowed to maintain their businesses.  As it merged with Rhone Poulenc, Hoechst was Germany's largest drugmaker. The combined company's biggest selling drugs include Lovenox, which is used to help prevent blood clotting, and Allegra, an antihistamine.
 About 75 percent of Aventis' $17 billion in 1999 sales came from its drugs business. The rest was from its agrichemicals sector, based in Lyon, France. To better concentrate on pharmaceuticals, Aventis SA is considering a spinoff of its farm chemicals business, including Aventis CropScience. But Aventis SA spokesman John Abrams said no decision is imminent.

 "We are looking at our life sciences strategy and giving ourselves the next 12 to 18 months to see what makes sense," he said.
 Abrams said Aventis CropScience's popular farm products include Balance and Puma herbicides and the Regent brand of pesticide. The flap over StarLink appears to have had little impact on Aventis SA. Its American Depositary Shares, traded on the New York Stock Exchange, are up 22 percent for the year. Since early October, when the StarLink controversy began to mushroom, its shares have fallen about 9 percent. Johannah Walton, a securities analyst in London with Lehman Brothers, sees little threat to Aventis SA from StarLink. "There may be some element of StarLink" in a recent weakening of Aventis SA shares, said Walton. But she said it's more likely related to whether Aventis SA will jettison Aventis CropScience.

 "I don't think it's a material issue," said Ted Semegran, an agribusiness industry analyst in New York. He called StarLink more an emotional issue than a practical concern, adding that the three-year-old StarLink's problems were "not a big deal" to a company as large as Aventis. Kuwait's government-run petroleum company, which is the largest single shareholder of Aventis, declined to comment on whether Aventis could be harmed by StarLink backlash. Neither Aventis CropScience nor Aventis SA have indicated what the costs incurred from StarLink. The company has agreed to pay farmers a premium of 25 cents for each bushel they turn over, and to cover transportation costs for any grain elevators that have to redirect corn shipments contaminated with StarLink. Descended upon by the press, Aventis has hired a New York City publicity firm, Abernathy and MacGregor, to field inquiries on StarLink. It also has set up a Web site, www.starlinkcorn.com, where farmers, elevator operators and other people interested in the corn can gather information.