BASF to Refocus Plant Biotech R&D

29.02.2016 -

BASF has announced it will refocus its R&D efforts in plant biotechnology to concentrate on projects with highest business and technical realization potential.

The move, which will go hand in hand with the loss of 350 jobs, will be aimed at streamlining the German chemical giant’s footprint both in Europe and North America, where it relocated its PlantScience headquarters after its failure to commercialize a genetically modified potato in the EU.

At the annual results press conference in Ludwigshafen on Feb. 26, CEO Kurt Bock said the realignment was part of a regular portfolio review, and would not impact its working relationship with Monsanto of the US, which he described as “very close.” In the collaboration, BASF identifies the genes that equip seeds with characteristics such as drought resistance, while Monsanto does the field testing and markets the products.

In future, BASF aims to focus its plant biotechnology research on high-potential projects in herbicide tolerance and fungal resistant soybeans. The project with polyunsaturated omega-3 fatty acids in canola seeds will also be continued.

While discovery and early development projects in yield and stress, including corn and soybeans, will be streamlined, and rice yield as well as corn fungal resistance projects will be discontinued, the yield and stress collaboration agreement with Monsanto for corn and soybeans will not be affected.

In fungal and herbicide resistance of plants, “we have some very smart projects underway. We will adjust, not completely stop, but we will adjust our efforts in some other areas where the payback periods are quite long and the level of uncertainty is very, very high,” Bock said in a talk with analysts, also on Feb. 25.

As part of the cutbacks, BASF will eliminate 140 plant research positions in North America and 180 in Europe – nearly half of its 700 employees engaged in plant biotechnology R&D.

The research and field sites at Research Triangle Park, North Carolina; Ames, Iowa; Berlin and Limburgerhof, Germany; Ghent, Belgium and in Brazil will be retained at reduced size, while field testing sites in Kekaha, Hawaii, USA, as well in India and Puerto Rico will be closed. The restructuring scheme is expected to be completed by the end of 2016.

At the conference, Bock would not comment on whether BASF’s ties with Monsanto would be strengthened or if the group would be interested in picking up any other agrochemical assets that might be put up for sale as part of the restructuring process sweeping the industry globally.

With Swiss agrochemicals giant Syngenta agreeing to be acquired by ChemChina and thus no longer in play, the BASF chief acknowledged that new combinations could be possible, but added that “we don’t want to speculate. We feel comfortable with what we have.”

Bock stressed also that the German group has no plans to become a seeds producer, saying, “We made a clear decision about 10 to 15 years ago not to enter the seeds business.” As regards conventional crop protection, he said the BASF business is “very competitive and has good earnings power.”