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NEWS
August 21st
2002
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Monsanto is having a hard time - aah! Faced with widespread opposition to GM crops, Monsanto chief executive Hendrik Verfaillie was recently forced to acknowledge that it could take much longer than initially forecast to gain regulatory approval for GM crops in Europe and Brazil. Monsanto estimates that when approved in Europe and Brazil GM crops could generate $600 million earnings. In the meanwhile Monsanto's profits have suffered a series of blows and the company has been forced to revise its projected profits for 2002 after a warning that profits could be one third down. In the first six months of 2002 profits fell $500 million below the same period a year ago. Monsanto was also forced to admit that changes to past accounting practices caused it to lose $1.6 billion during the same period. In addition, the US patent on Roundup, which generated 45% of revenues for the company, has expired. Monsanto was also hit be the Argentinian economic crash and was forced to write off $154million of farmers bad debt and, because they can't afford to buy them, looks set to sell considerably less GM seed and chemicals to Argentinian farmers next season. It is also having trouble persuading US farmers that they need GM wheat and has slashed prices on GM maize in order to bribe farmers to continue to purchase GM seed in an increasingly sceptical marketplace. Monsanto denies that it is currently in danger of running out of cash. But when the company recently tried to raise $650m from commercial debt markets it struggled to obtain $390m. The fall in profits and uncertainties about when money will flow in from the GM investment has also seriously affected Monsanto's share price, which has halved over the past year. The company was weakened further last week when US drugs company Pharmacia transferred its remaining 84% share in Monsanto to its shareholders, just two years after buying the company. Meanwhile, the company is desperately trying to woo those sceptical Europeans with 'The New Monsanto Pledge' in which it claims to want to talk to its customers, engage in public dialogue and be transparent in all its dealings. FT Articles: http://search.ft.com/search/article.html?id=020819000709&query=Monsanto&vsc_appId=totalSearch&state=Form Article
in the Guardian:
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