Monsanto pulling out of Pharma Crops/Public mistrust of GM at root of Monsanto's UK pull out (17/10/2003)

"Public mistrust of genetically modified food is at the root of Monsanto's decision to sell its Cambridge cereal seed operation" (item 2)

In the last few days Monsanto has:
*pulled out of Europe
*cut up to 9% of its global workforce
*reported a $188 million loss
*paid $600 million in compensation
*seen a big drop in share value
*and now pulled out of Pharma Crops

1.Monsanto Overhauling Businesses
2.Public mistrust of GM at root of Monsanto's UK pull out
1.Monsanto Overhauling Businesses
The New York Times
Published: October 16, 2003

Monsanto, the world's leading agricultural biotechnology company, says it is abandoning efforts to produce pharmaceuticals in genetically engineered crops to focus on businesses that could pay off sooner.

The company, based in St. Louis, said that its decision was not related to the controversy that has surrounded such efforts. Rather, it said, the move was part of a broader overhaul announced yesterday that would result in layoffs of 7 to 9 percent of its work force, or as many as 1,200 people.

Scientists are experimenting with putting genes into plants that cause the plants to produce proteins for use as drugs, like growth hormone or various monoclonal antibodies. This approach, called pharming or biopharming, is not done commercially yet but may prove to be cheaper than the current method of producing such drugs in genetically modified animal cells grown in vats.

Pharming has attracted opposition not only from the environmental groups that usually oppose genetically modified foods, but from food companies, which worry that pharmaceutical-containing corn might wind up in corn flakes, forcing product recalls and undermining public confidence in the safety of the food supply.

Such concerns were stoked by a couple of incidents last year in which pharmaceutical-containing corn developed by ProdiGene, a small biotech company, intermingled with food crops, though the problem was discovered before any of the food was eaten. Regulations have since been tightened in a way that could make it more difficult to grow pharmaceutical-containing corn - the crop Monsanto was concentrating on - in the Corn Belt.

In a conference call with analysts yesterday, Hugh Grant, the chief executive, said that the decision was based on the "uncertainty of the longer-term reward from a highly capital-intensive business." He said the company was trimming research and development spending and focusing on projects that had a nearer-term payoff.

Bryan W. Hurley, a spokesman for Monsanto, said in a subsequent interview that the move was "purely a business decision" unrelated to the controversy. The company's plant-based pharmaceutical division, known as Monsanto Protein Technologies, employed about 70 people.

Monsanto remains committed to genetically modified crops, he said. The company is suffering from generic competition to its Roundup herbicide and is focusing more than ever on seeds and biotechnology.

The company said yesterday that it would trim its work force, largely in the agricultural chemical business. It also said that it would exit the European breeding and seed business for wheat and barley, though it will continue to develop genetically engineered wheat resistant to its Roundup herbicide.

It announced a loss for its fourth quarter of $188 million, or 72 cents a share, largely because of a settlement of a lawsuit tied to decades-old pollution in Alabama. Revenue rose 10 percent, to $1.31 billion.
2.125 jobs hinge on Monsanto's ability to sell Cambridge site
Public mistrust of genetically modified food is at the root of Monsanto's decision to sell its Cambridge cereal seed operation, putting 125 jobs in jeopardy.
Business Weekly, 17 October 2003

Public mistrust of genetically modified food is at the root of Monsanto's decision to sell its Cambridge cereal seed operation, putting 125 jobs in jeopardy.

US-based GM specialist, Monsanto said that the growth expected to come from the introduction of hybrid wheat seeds, one of the principal reasons for the purchase of the business from Unilever in 1998, had failed to materialise.

The company announced that it would begin immediately seeking a buyer for all or parts of its cereal seed business.

The largest public debate ever conducted in Britain revealed widespread misgivings about GM crops last month. Hundreds of meetings were staged around the country and about 37,000 people responded to questionnaires, with well over half saying they never wanted to see GM crops grown in the UK.

Results of the Government's farm-scale evaluation of GM crops were close to being announced at the time of going to press, with a mixed verdict on the technology anticipated. It is still far from certain that the Government will allow them to be grown.

"Nonetheless, we've made great progress over the past few years in realigning the cereals business to make it more competitive in a much tougher European seed market," said Jeff Cox, Monsanto UK's general manager.

"While our lack of success in hybrids means this is no longer a good strategic fit for Monsanto, the changes we've made could make it a great addition to another company's portfolio."

In addition to the Cambridge site, also affected are breeding stations in France, Germany and the Czech Republic. The cereal seed business is supported by sales, marketing, product development and seed production operations in the UK, and operates through agencies in major European markets.

Monsanto said it had entered into a collective consultation process with trade unions, employee representatives and all affected staff.

Proposals were also announced to reorganise Monsanto's Northern European Region crop protection and oilseed rape business. The intention is for this business to move to another location in the Cambridge area.

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