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SYNGENTA

Restructuring costs dent Syngenta profits for 2014

Leading agrochemicals group Syngenta on Wednesday posted a two percent drop in net profit in 2014 compared to the previous year, due in part to restructuring costs and pressure on currencies in emerging markets.

Restructuring costs dent Syngenta profits for 2014
Syngenta biology building in Stein, Switzerland. Photo: Syngenta

The Swiss company recorded a net profit of $1.6 billion last year on sales that increased three percent to $15.1 billion.
   
The result narrowly beat the expectations of analysts polled by the AWP financial news agency, who had anticipated a net profit of $1.5 billion on sales of $15 billion.
   
The company, which specializes in insecticides to protect crops and competes with US giant Monsanto, said that not counting restructuring costs and impairments, its earnings per share inched up one percent to $19.42.
   
Syngenta last year launched a massive restructuring programme, which the company said would lead to the termination or relocation of around 1,800 jobs in 2015.
   
The company, which makes more than half of its sales in emerging markets, meanwhile saw currency fluctuations take a heavy toll, draining $90 million out of its operating margin.
   
In a bid to withstand the brutal fall of the rouble and the Ukrainian hryvnia, Syngenta raised prices, allowing it to make back around half of its losses in those currencies.
   
"With emerging markets now accounting for over 50 percent of our sales, managing more volatile conditions has become an integral part of our business," company chief Mike Mack said in the earnings statement.
   
Not counting currency fluctuations, the company said its sales were five percent higher in 2014 than the year before.
   
Syngenta saw its sales swell seven percent in Latin America, where its new fungicide Elatus raked in more than $300 million after its launch in Brazil.
   
In North America though, sales plunged seven percent because of a longer than usual winter season that delayed crops, as well as because of widespread flooding in Canada.

Sales were also hit by a reduction of acres for planting corn, the company said.
   
Syngenta was cautious about the future, saying it expected its sales at constant exchange rates to remain "broadly unchanged", adding that it was planning further price hikes to offset continued currency pressures.
   
"In 2015, in an environment of crop price and currency volatility, we will continue our track record of rigorous risk management," Mack said.
   
Syngenta said its board planned to propose hiking the dividend paid on 2014 earnings by ten percent to 11 francs per share, reflecting "the company's confidence in future cash generation and its robust balance sheet."
   
Following the announcement, Syngenta saw its share price swell 3.53 percent in midday trading to 311 francs, as the Swiss stock exchange's main SMI index rose by 1.31 percent.

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SYNGENTA

Swiss NGO links Syngenta pesticide to Indian farmer deaths

The Swiss NGO Public Eye called on Tuesday for an export ban on the pesticide Polo, produced by agriculture giant Syngenta, implicating it in the death of 20 Indian farmers last year.

Swiss NGO links Syngenta pesticide to Indian farmer deaths
A man outside Sygenta HQ in Basel in 2017. File photo: AFP

Syngenta, bought by ChemChina for $43 billion in 2017 in China's largest ever foreign takeover, has rejected the allegations by Public Eye.

“There is absolutely no evidence to suggest that Syngenta's product Polo was at all responsible for the incidents that have occurred,” the company said in a statement. 

Last September, officials in the western Indian state of Maharashtra reported that 20 farmers had died and hundreds of others were in hospital after inhaling poisonous pesticides while spraying crops.

After visiting the affected Yavatmal region and interviewing farmers and their relatives, Public Eye said there was strong evidence that Polo — specifically its active agent diafenthiuron — was responsible for the 
poisoning. 

Public Eye noted that while the evidence was not conclusive, the spraying of Polo was a common link among those who died or fell sick. 

The NGO also said farmers in Yavatmal likely inhaled excessive amounts of the insecticide last year as cotton plants grew higher than normal, forcing them to spray closer to their mouths. 

Officials in Maharashtra reportedly opened a criminal investigation targeting Syngenta over the deaths, but the status of the probe is not known. 

The European Union banned diafenthiuron in 2002. 

The Swiss government pulled it from the market in 2009 “for reasons of health or environmental protection”, according to official documents. 

Syngenta branded Public Eye's allegations “salacious and incorrect”.

In response to the spate of deaths and illnesses, the company said it “conducted stewardship programs in the district and adjoining regions, conducted doctor training programs and established mobile health clinics to 
support treatment of farmers who may have been affected.”

Syngenta noted that Polo “has been successfully and safely used by Indian farmers across the country for the last 14 years,” and that diafenthiuron is registered in 25 countries worldwide. 

Export ban?

While diafenthiuron cannot be used in Switzerland, it is produced in Monthey, in the Valais canton. 

Under current Swiss law, Syngenta has to inform the federal government about its diafenthiuron exports, including quantities and destination countries. 

Bern is then responsible for informing the recipient countries, so they are aware of the risks. 

Public Eye says this does not go far enough and that companies based in Switzerland should be barred from exporting products deemed unsafe for Swiss people. 

“The Swiss authorities must put an end to this policy of double standards,” the NGO said. 

Swiss voters will this Sunday vote in two referendums aimed at ensuring foodstuffs produced in Switzerland are sustainable, healthy and fairly-produced.

It urged backing for a motion introduced by federal lawmaker Lisa Mazzone calling for the prohibition of “the export of pesticides whose use has been banned in Switzerland due to their effects on human health or the environment.”