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.
BEIJING--(BUSINESS WIRE)--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."
About Origin
Founded in 1997 and headquartered in Beijing, Origin Agritech
Limited (NASDAQ: SEED) 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. For
further information, please log on www.originagritech.com.
Forward Looking Statements
This release contains forward-looking statements. All forward-looking
statements included in this release are based on information
available to us on the date hereof. These statements involve
known and unknown risks, uncertainties and other factors,
which may cause our actual results to differ materially from
those implied by the forward-looking statements. In some
cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "targets," "goals," "projects," "continue," or
variations of such words, similar expressions, or the negative
of these terms or other comparable terminology. Although
we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.
Therefore, actual results may differ materially and adversely
from those expressed in any forward-looking statements. Neither
we nor any other person can assume responsibility for the accuracy
and completeness of forward-looking statements.
Important factors that may cause actual results to differ
from expectations include, but are not limited to, those risk
factors discussed in Origin's filings with the SEC including
its annual report on Form 20-F filed with the SEC on February
27, 2008. We undertake no obligation to revise or update publicly
any forward-looking statements for any reason.
Contacts:
Origin Agritech Limited
Irving Kau, 760-918-1781
Vice President, Finance
Irving.kau@originseed.com.cn
or
Global Consulting Group
Eddie Cheung / Dixon Chen, 646-284-9414
Investor Relations
echeung@hfgcg.com