German seed producer KWS Saat said it will sell its Chinese corn business due to new regulations that could mean its conventionally bred traits would be unable to compete with genetically modified corn over the longer term.
The company said it expects to sell its corn unit and the corresponding 49% minority stake in joint venture Kenfeng-KWS Seed to its Chinese partner firm Kenfeng for a mid-range double digit million euro sum.
The decision was driven by changes in China’s regulatory framework, a company spokesperson told Reuters.
China has approved genetically modified corn for domestic companies, but bans foreign companies – including partners in joint ventures – from developing GMO corn traits.
KWS Saat said without giving further details that it expects the deal to positively affect its after-tax operating income for 2023/2024.
Kenfeng-KWS Seed was founded as a joint venture in 2014 as KWS Saat bet on the Chinese corn market opening up to foreign companies.
With the sale, KWS Saat will largely exit the Chinese market, where its corn business accounts for about 1% of global revenue, or about 15 million euros ($15.95 million).
Source: Reuters.com