The Sunday Mail
sector – file picture
Lorraine Muromo
THE Zimbabwean unit of American-based seed business DuPont Pioneer will shell more than US$30 million to acquire the assets and liabilities of Pannar Seed Company as it seeks to consolidate its business and claim a significant market share of the seed market business.
Presently, listed agro-concern Seedco controls an estimated 80 percent of the seed market, with competitors sharing the remainder.
The deal, however, still has got to go through stringent regulatory approval processes both within and outside Zimbabwe. It is understood that regulatory authorities in South Africa initially rejected the takeover bid.
Pannar Seed Company, which is targeted for acquisition, is a South African company. Sources suggest that negotiations between the two entities began in 2010. Experts believe that the merger of the two companies will likely generate positive spin-offs for the local market as combining Pioneer’s high-yielding maize with Pannar’s sub-tropical disease-resistant hybrids will help boost yields.
DuPont Pioneer’s head of communications-Africa Mrs Barbra Sehlule Muzata said the two parties are engaging Government in order to finalise the deal.
“DuPont Pioneer and Pannar filed a Merger Notification Form with the Competition and Tariff Commission to seek approval for Pioneer Hi-Bred (Zimbabwe) (Private) Ltd (Pioneer Zim) to acquire the assets and liabilities of Pannar Zimbabwe. The two organisations will be consolidated into one commercial entity in Zimbabwe supporting both the DuPont Pioneer and Pannar brands, operating under Pioneer Hi-Bred (Zimbabwe) (Private) Ltd. The completion of the acquisition is subject to receipt of regulatory approvals.
“Continued pressure on sales, revenue and profit as well as increasing bad debt write-offs, largely attributed to the continuing liquidity issues, have obligated the two companies to take a course that allows for a future of the two brands in the country, even if under one organisation,” said Mrs Muzata.
Pioneer Hi-Bred’s president Mr Paul Schnicker recently said seed companies ultimately intend to lift productivity level of sub-Saharan farmers.
“Combining our research capabilities will deliver better products faster than either of us can do on our own,” he said.
Panaar Seed was established in 1958 and sells seed directly to farmers in nine African countries, including South Africa.
It also sells through third parties elsewhere in Africa, the US, Europe and Argentina. It is believed that Panaar was the first private company to introduce its own maize hybrids in South Africa in the 1960s. Over the years, it has since expanded its research and commercial activities into various other crops and territories.
However, DuPont Pioneer began operating in Zimbabwe in 1992, distributing Pioneer brand maize hybrids through area sales agronomists, dealers, rural traders and farmers who link Pioneer to Zimbabwe’s commercial and communal farmers.
Zimbabwe also serves as the headquarters for Pioneer’s East African operations, including Ethiopia, Kenya, Malawi, Tanzania and Zambia. Both companies are world class seed companies that are ostensibly angling to boost the agricultural productivity of sub-Saharan farmers.
