Monsanto and Novozymes Team Up to Provide Sustainable Bioagricultural Solutions
The companies establish The BioAg Alliance to discover, develop and sell microbial solutions that enable farmers worldwide to increase crop yields with less input
Monsanto Company (NYSE: MON) and Novozymes (NASDAQ OMX:NZYM B) announced Dec 10 a long-term strategic alliance to transform research and commercialization of sustainable microbial products that will provide a new platform of solutions for growers around the world.
The BioAg Alliance will allow the companies to leverage employees, technologies and commercial assets in the companies’ agricultural biologicals portfolios. The BioAg Alliance is unique in the industry, bringing together Novozymes’ commercial BioAg operations and capabilities within microbial discovery, development and production with Monsanto’s microbial discovery, advanced biology, field testing and commercial capabilities.
“As the world population grows at tremendous pace over the next decades, we need to significantly increase the output from our land without increasing the pressure on the environment,” says Peder Holk Nielsen, CEO of Novozymes. “Today, we forge a game-changing alliance with the potential to transform global agriculture. The combined capabilities of Novozymes and Monsanto create an innovation powerhouse with a unique opportunity and approach to unleash the transformational opportunity in naturally derived microbial solutions in agriculture.”
The BioAg Alliance
Novozymes has over the last decade leveraged its know-how and experience in industrial enzymes and microbial technologies to build global positions in the agricultural biologicals market with a broad and proven product portfolio and annual revenue of approximately $120 million in 2012. Combining its strengths within microbial discovery, application development and fermentation and its leadership position in the agricultural biologicals market, Novozymes brings an established and unique starting point for the alliance to accelerate from in both the short and long term.
Monsanto has a research team working on microbial solutions and has one of the most extensive seeds and traits discovery, field-testing and commercial footprints in the industry.
Under the collaboration:
• Monsanto and Novozymes will maintain independent and complementary internal and external discovery research programs to identify microbial targets with the potential to help farmers.
• Novozymes will be responsible for production and supply of the microbial solutions to Monsanto, building on its expertise within fermentation. Monsanto will serve as the lead for field testing, registration and commercialization of all alliance products.
• The companies will co-manage the alliance and co-fund research and development efforts.
• Monsanto will pay Novozymes an aggregate upfront payment of $300 million net in recognition of Novozymes’ ongoing business and microbial capabilities, and for Novozymes to supply alliance products.
• Marketing responsibility for Novozymes’ current product portfolio in agricultural biologicals will be transferred to Monsanto along with much of the Novozymes commercial organization currently responsible for that work. The two companies will work to ensure that existing customer relationships and know-how are maintained and further built on for short- and long-term success.
•Both companies will benefit from profits on commercialized products resulting from this alliance and those products brought into the alliance by the parties. Through the alliance, the companies will also test and sell commercial microbial products purchased from other suppliers to bring additional value to farmers.
Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries Novozymes creates tomorrow’s industrial biosolutions, improving its customers’ business and the use of our planet’s resources. With over 700 products used in 130 countries, Novozymes’ bioinnovations increase industrial performance and safeguard the world’s resources by offering superior and sustainable solutions for tomorrow’s ever-changing marketplace. Read more at www.novozymes.com.
About Monsanto Company
Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world’s natural resources such as water and energy. To learn more about our business and our commitments, please visit: www.monsanto.com.