Manufacturing News

New Zealand grass seed company moves into China with funding, representative office

New Zealand's largest agricultural services company is to set up a representative office in Beijing with its Chinese parent company, Agria Corporation, as the two companies take advantage of a Beijing government grant to develop products for the China market.

The Beijing office would work to deliver revenue and profit generating business for PGG Wrightson in China, said a statement from PGG Wrightson Wednesday.

"The initial focus will be on working with PGG Wrightson's existing businesses to satisfy the strong demand in China for high quality grass seed and for dairy livestock sourced from New Zealand, Australia and Uruguay," said the statement.

The representative office would facilitate sourcing of products for PGG Wrightson's rural supplies business in New Zealand and serve as a valuable resource for PGG Wrightson's other business units, it said, although it gave no timetable for the move.

The office would also be responsible for conducting market and product research, marketing, brand promotion and coordination of PGG Wrightson's activities in China.

Xie Tao, Agria chief executive officer, said in the statement that Agria was proud to welcome its partner into China.

"The establishment of a formal representative office reflects the success of our relationship, our resource sharing and continued mutual goal of pursuing attractive growth opportunities in China, New Zealand and worldwide."

George Gould, managing director of PGG Wrightson, said the move represented a significant milestone in the company's strategy of generating value for all PGG Wrightson shareholders from market opportunities in China.

"It is worth noting that PGG Wrightson has a history of working with China-based partners and customers given the international scope of our livestock, wool and proprietary seeds businesses," Gould said in the statement.

The announcement came as Agria also announced it had received the first phase of a grant to help fund Sino-New Zealand joint research into high technology content grass seeds for the China market.

The first phase grant from the science and technology division of the Beijing government was for 6 million yuan (945,600 U.S. dollars), said a statement through PGG Wrightson.

The grant would be used to fund joint research and development into the adaptation of six grass seed varieties that were originally developed in conjunction with PGG Wrightson with a view to their application in China.

The project also intended to develop GAP (Good Agricultural Practice) in the development of grass seed technology by following the high standards set in New Zealand, it said.

Agria vice president Charles Jiang said in the statement that China had 390 million hectares of natural grassland, but much of it was of very low productivity.

"By working jointly with our and our partners' scientists in China, those in New Zealand and our subsidiary PGG Wrightson, we aim to develop high technology content grasses to allow for the increase of productivity of this grass land. This is the latest success of Agria's strategy of working with leading government science departments in China to secure a pipeline of next generation seed technologies for future commercialization. It will also serve to strengthen the PGW brand in China," said Jiang.

New York Stock Exchange-listed Agria Corporation is involved in research and development, production and sale of seed products, including field corn seeds, edible corn seeds and vegetable seeds.

Its Agria Asia arm has a 50.22-percent stake in PGG Wrightson, which reported turnover of 1.2 billion NZ dollars (926.28 million U.S. dollars) for the year to June 30.

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