Beijing, China
September 13, 2010
Agria Corporation (NYSE: GRO), a China-based holding company for investments in the agriculture sector, today announced that it has made a RMB40 million investment in Wuwei Ganxin Seeds Company Limited ("Ganxin"). Under the investment agreement, Agria will receive a 49% equity stake in Ganxin, a corn seed research, development, production and sales company based in the Gansu province, China. Agria and Ganxin have also entered into an exclusive sales agency agreement, whereby the entire production volume of all current and future varieties of seeds owned or developed by Ganxin will be sold by Agria, acting as Ganxin's exclusive agent.
The investment and sales agreement are part of Agria's ongoing strategy to build a seed division through both organic growth and a series of acquisitions.
Ganxin was formed in 2005 and produces corn seeds through arrangements with farmers in Gansu province, which is regarded as the leading area for corn seed production in China. Ganxin's rights to produce and sell three varieties of corn seeds have been approved by relevant government authorities. This includes the variety Jixiang No. 1, which has features of high productivity and strong resistance to disease and is well regarded with a significant market share in China. Under the terms of the investment agreement, Agria will have board representation sufficient to enforce veto rights on all decisions.
The sales agency agreement will remain effective for so long as Agria holds an equity stake in Ganxin.
Agria Corporation is a China-based holding company for investments in the agricultural sector.
Topics
Species
