DuPont said Tuesday its Pioneer Hi-Bred International unit formed a joint venture with one of China’s largest seed production companies, Dunhuang Seed Co. Ltd., to provide corn hybrids to Chinese farmers.
The new joint venture, Dunhuang Seed Pioneer Hi-Bred Company Ltd., will develop and distribute high-yielding corn hybrids for the spring corn market in China. The joint venture plans to produce seed in 2007 for sale in 2008. Dunhuang Seed Pioneer Hi-Bred Company Ltd., in accordance with Chinese law, is 49 percent owned by Pioneer, and 51 percent owned by Dunhuang Seed.
The news comes a day after DuPont said it will close or streamline some of the manufacturing operations of its seeds business, cutting its workforce by 1,500 worldwide.
DuPont said that under the plan it will reinvest all of the $100 million expected savings into its seed business. DuPont expects to record a charge of about $200 million in the fourth quarter of 2006 for restructuring and asset impairments.
With 62.5 million acres, China is second only to the United States in the amount of land producing corn. Additionally, a quickly growing population with rising incomes has resulted in an increased demand for agricultural products. More meat is consumed in China than in any other country, and 50 percent of the world’s hogs are in China, leading to a high grain demand for livestock feed, DuPont said.
Pioneer established a business representative office in Beijing in 1997. A year later, it began breeding and testing corn hybrids for commercialization in China for the summer and spring corn areas. The first Pioneer corn hybrids were approved for commercialization in 2002. Pioneer established a summer corn joint venture in China – Shandong Denghai Pioneer Seeds Co., Ltd. – in late 2002, and the first commercial sales were in 2004.