Monsanto and Novozymes form BioAg Alliance to leverage assets in their ag biologicals portfolios.
MONSANTO Co. and Novozymes 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 new BioAg Alliance will allow the companies to leverage employees, technologies and commercial assets in their agricultural biologicals portfolios.
The statement said 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. The result will be a comprehensive research, development and commercial collaboration to help farmers globally meet the challenge of producing more with less in a sustainable way — for the benefit of agriculture, consumers, the environment and society at large.
"As the world population grows at a tremendous pace over the next decades, we need to significantly increase the output from our land without increasing the pressure on the environment," Peder Holk Nielsen, Novozymes chief executive officer, said. "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."
Dr. Robb Fraley, chief technology officer of Monsanto, added, "Monsanto, Novozymes and the farmer customers we serve share a need to meet growing demand in a sustainable way, and investing in the research and development of agricultural biological technologies like microbials is another step in that direction and a natural extension of our core business. ... We see this collaboration as being the same type of catalyst for taking our biologicals work from a technology to a full-fledged platform that represents the next layer of opportunity for growers to drive yield and productivity while helping the preservation of finite natural resources in our precious planet."
Microbial solutions are a significant part of the agricultural biologicals industry, which today represents roughly $2.3 billion in annual sales and has posted mid-teen sales growth in each of the last several years.
Microbial-based solutions are derived from various naturally occurring microorganisms such as bacteria and fungi. They can protect crops from pests and diseases and enhance plant productivity and fertility.
With faster development cycles compared to other agricultural innovations, as well as broad geographic and crop applicability, microbial solutions offer tremendous potential to deliver sustainable, cost-effective solutions that can increase yield using less input, the announcement said.
The emerging agricultural biological technologies complement the integrated systems approach that is necessary in modern agriculture, bringing together breeding, biotechnology and agronomic practices to improve and protect crop yields.
In combining the capabilities of Novozymes and Monsanto, the companies are poised to deliver an entirely new category of more-effective microbial solutions for global broad-acre crops, fruits and vegetables.
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 the 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.
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.
The companies will co-manage the alliance and co-fund research and development efforts. The marketing responsibility for Novozymes' current product portfolio in agricultural biologicals will be transferred to Monsanto, along with much of Novozymes' commercial organization currently responsible for that work.
The agreement is subject to the approval of the relevant national antitrust authorities to the extent required. The alliance is expected to go into effect in early 2014. Further terms were not disclosed.