Beijing, China
March 24, 2008
- Specific GM products have
historically dominated the worldwide crop market
- Introduced in US in 1998, glyphosate-resistant corn grew from
950,000 acres in 1998 to 2.3 million acres in 1999 to 41 million
acres in 2007
Origin Agritech Limited
(NASDAQ GS: SEED) (“Origin”), a leading technology-focused
supplier of crop seeds and agri-biotech research in China, today
updated its genetically modified pipeline to set forth the next
generation of corn product into China.
Phytase
World’s first transgenic phytase corn is expected to be
commercially launched in 2009, and is expected to be the first
genetically modified corn product in China. Final approval
(Phase 5) of product development is expected in late 2008.
Currently, phytase corn remains the only biotechnology crop
product in Phase 5 of development in China. Phytase is currently
used as an additive essential for the growth and development of
all animals, and limits the amount of phosphorus waste in the
environment. Phytase, as an additive for animal feed, is
mandatory in Europe, Southeast Asia, South Korea, Japan, and
Taiwan for environmental purposes. The worldwide phytase
potential market size is US$500 million dollars, including
US$200 million for China alone, according to the China Feed
Industry Study. The corn seed market in China is estimated at
US$1 billion.
Glyphosate (Herbicide) Resistance
Glyphosate resistance is in the intermediate testing phase
(Phase 2). Origin plans to apply for environmental release test
for both (Phase 3) in mid 2008 for 5 selected lines. Origin
Agritech retains the exclusive license rights to these specific
herbicide resistant traits, and expects to be the first company
to commercialize the herbicide resistant crops in China.
Worldwide, the largest segment of the transgenic crop market has
been herbicide resistant crops. Specifically, glyphosate
resistant crops have been widely accepted in cotton, corn, and
canola in North America. Introduced in the US in 1998, the use
of glyphosate resistant corn grew from 950,000 acres in 1998 to
2.3 million acres in 1999 to 41 million acres in 2007, or at a
compounded annual growth rate of 51.9%, according to the US
Department of Agriculture. The rapid historical adoption rate
indicates farmers find this trait to be extremely valuable. The
high level of adoption of these crops by farmers has also caused
the reduction in value of the remaining herbicide market.
Since their introduction in 1996, over 75 million acres of
genetically engineered glyphosate-resistant crops have been
planted, making up 46% of the corn acres, 80% of soybean acres,
and 70% of cotton acres in the US. These genetically engineered
crops have been adopted by farmers because they are perceived to
offer significant economic benefits over conventional crop and
herbicide programs. The adoption of glyphosate-resistant crops
has reduced costs for US farmers an estimated $1.2 billion. On
the basis of recent adoption rates by growers around the world,
it appears that glyphosate-resistant crops will continue to grow
in number and in hectares planted.
Pest Resistance (Bt Corn)
Pest resistance (Bt Corn) is in the intermediate testing phase
(Phase 2). Origin plans to apply for environmental release test
for both (Phase 3) in late 2008 for 3 selected lines, and the
company retains the exclusive license rights to these specific
pest resistant (Bt corn) traits which, in all early trials, are
the best performing traits for pest resistance throughout China.
Bt crops produce a protein toxic to specific insects used in
areas with high levels of infestations of targeted pests. Bt
cotton, which controls varieties of the budworm and bollworm,
was planted on 59 percent of U.S. cotton acreage and 75 percent
of the Chinese cotton acreage in 2007. Introduced in 1996 in the
US, acreage of Bt corn has grown from 3.6 million acres in 1999
to 44 million acres in 2007, or at a compounded annual growth
rate of 36.7%, according to the US Department of Agriculture.
This Bt corn variety was planted on 49 percent of U.S. corn
acreage in 2007.
Stacked Traits: Glyphosate Resistance & Pest Resistance (Bt)
Glyphosate resistance and pest resistance are in the
intermediate testing phase (Phase 2). Origin plans to apply for
environmental release test for both (Phase 3) in 2008.
Worldwide, more than 250 million acres of biotech crops with
herbicide resistant and pesticide resistant traits were planted
in 22 countries in 2006, with the U.S. accounting for about 54
percent. Argentina, Brazil, Canada, India, China, Paraguay, and
South Africa together accounting for nearly 43 percent,
according to the International Service for the Acquisition of
Agri-biotech Applications.
Nitrogen Efficiency & Drought Tolerance
Nitrogen efficiency and drought tolerance traits are in the
laboratory testing phase (Phase 1). Again, Origin Agritech
retains the exclusive license rights to these specific traits.
“Historically, these are the glyphosate and Bt traits that have
dominated globally. We believe that our product pipeline is
unparalled.” Bailang Zhang, a director of Chinese Academy of
Agricultural Sciences (CAAS), industry expert, and Origin
Agritech board member commented. He continued, “Origin continues
to be unique with its in-house biotechnology capabilities and GM
product pipeline in China. Coupled with the fact that China
continues to remain a marketplace for Chinese players, as only
China-based firms are able to move past the initial round of
testing, Origin Agritech, from a strategic standpoint, remain
second to none.”
Founded in 1997 and headquartered in Beijing, Origin Agritech
Limited (NASDAQ: SEED - News) is one of China’s leading,
vertically-integrated agricultural technology company
specializing in agri-biotech research, development and
production to supply the growing populations of China. Origin
develops, grows, processes, and markets crop seeds to farmers
throughout China and parts of Southeast Asia via a network of
approximately 3,800 first-level distributors and 6,500
second-level distributors. The hybrid seed industry is estimated
at US$2 billion and that is expected to double by 2010. The
Company currently operates facilities in 30 of China’s 32
provinces as well as Beijing. Since Origin launched its first
entirely internally developed seed in 2003, the Company has
developed and commercialized an internally developed proprietary
seed portfolio of twelve corn hybrids, twelve rice hybrids and
two canola hybrids as of 2007. |
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