Daily News Archive
Group Warns Investors That Monsanto Is a Risk
(April 22, 2003)
According to Reuters News Service, anti-biotech forces opened a new
line of attack on agrochemical producer Monsanto Co, warning investors
that the company's increasing focus on development of genetically modified
crops was destined for disaster. A report commissioned by Greenpeace,
and Genetic Engineering: Risk for Investors, warns that Monsanto
has "above average risk exposure" for investors.
The report says Monsanto's genetically modified crops face widespread
consumer opposition around the world, lack regulatory approval in many
countries, and are likely to suffer a contamination event similar to
the StarLink corn problem three years ago. That incident cost Monsanto
competitor Aventis about $1 billion when biotech corn not approved for
food use showed up in food products.
Monsanto, which has just released its latest genetically modified offering
in the form of an insect-protected corn technology called YieldGard
Rootworm, criticized the report as biased and lacking a clear view of
the company's strategy. R.T. Jones analyst Juli Niemann said Monsanto's
cautious approach to its biotech offerings was keeping it in line with
market demand and helping it avoid potential pitfalls.
While Monsanto does not expect large sales this year of its newest biotech
corn, which is being sold in the U.S. and Canada, and has import approval
in Japan, the company has said it sees significant demand for the rootworm
corn in the future. In addition, the National Corn Growers Association
is supportive of Monsanto's efforts and said that to date its products
have been beneficial to farmers and consumers.
Monsanto has been working to refocus its revenue growth on the sales
of biotech seeds and traits as competition steadily eats away at profits
in the herbicide business, which traditionally gave Monsanto the bulk
of revenues. But the company has struggled financially of late, losing
$1.7 billion in 2002, and capping the year with the unexpected resignation
of Chief Executive Hendrik Verfaillie.
Monsanto stock has lost about half its value in the last year on the
New York Stock Exchange.