More good news on Monsanto/DeKalb. DeKalb is in an investment partnership with Monsanto...
DEKALB Genetics Expects Further Gains in 1998
PR Newswire, Tuesday, December 02, 1997 at 18:52
MYSTIC, Conn., Dec. 2 /PRNewswire/ -- DEKALB Genetics Corporation
(NYSE:DKB) said today that it expects further gains from both domestic and
international seed businesses in fiscal 1998. DEKALB, which will market the
industry's first Roundup Ready(R) corn hybrids next spring, expects that
Roundup Ready corn and Bt corn will leverage market share growth in the United
States. The international seed business, meanwhile, is led by operations in
Argentina, which will post very significant market share gains this year.
"In Argentina, where the planting season has substantially concluded, we
estimate that we added at least 10 points to our leading corn market share,"
Richard T. Crowder, DEKALB's senior vice president of international
operations, told security analysts at a company meeting. "The performance of
our products has been outstanding, despite severe disease pressures.
Moreover, we released several new hybrids this season that strengthen an
already powerful line-up."
DEKALB expects continued sales momentum in North America. "We are
targeting a corn market share increase of about one percentage point in 1998,"
said Doug Roberts, vice president of marketing, adding that the company also
expects higher sales and profits from its supporting products.
"Demand should be very strong for our Roundup Ready and Bt corn hybrids,"
said Richard 0. Ryan, president and chief operating officer. "Growers have
adopted specific-trait products at a remarkable pace. By 2001, we anticipate
that more than 50 percent of U.S. corn acres will be planted to specific-trait
products, led by Bt. We would expect similar penetration of soybean acreage,
led by the phenomenal success of Roundup Ready soybeans."
Seed supplies will be sufficient for the company to achieve its sales
goals. Conventional hybrid supplies are excellent and of very high quality.
Meanwhile, supplies of biotech products should also be good, thanks to a
record winter growing program in South America. Although the extensive winter
program will increase unit corn costs, this increase will be largely offset by
favorable price mix changes, primarily due to premiums from these specific-
trait products. "The bottom line is that we expect to maintain corn unit
margins at the elevated levels we achieved in fiscal 1997," Ryan said.
Product performance continued to be strong during the 1997 growing season.
"DEKALB's conventional hybrids provided a return per acre more than $11 higher
than the average of the competition," said John Pfund, vice president of
research. "Our newest conventional hybrids -- those released in 1997 --
provided performance advantages ranging from $9 to $34 per acre."
"We saw excellent results as well from our specific-trait products," said
Catherine Mackey, vice president of research. "Field tests showed that there
was no yield reduction associated with our Roundup Ready corn hybrids. This
means that farmers can get the same yield advantages they have come to expect
from DEKALB, along with an additional herbicide option that wasn't available
before."
Meanwhile, DEKALB's Bt hybrids delivered a yield and moisture advantage of
more than $25 per acre compared with unconverted DEKALB hybrids and a $7 per
acre advantage versus competitive Bt hybrids. DEKALB's high-oil hybrid had a
$28 per acre performance advantage over competitive TopCross(R) products.
Research expenditures are expected to increase to $62 million in 1998, up
more than 20 percent from $50 million in the prior year. Biotechnology
expenditures will account for nearly $25 million of the total. Interest
expense will also be up significantly, reflecting higher inventory costs
related to the proliferation of specific-trait products and an aggressive
capital expenditures program.
"Although our costs are considerably higher in 1998, we believe they lay
the groundwork for continued growth," said Bruce P. Bickner, DEKALB's chairman
and chief executive officer. "Despite these higher costs, we continue to
believe that our corporate goal of a 20 percent annual increase in earnings
per share is achievable."
Based in DeKalb, Ill., DEKALB Genetics Corporation is a worldwide leader
in agricultural genetics and biotechnology for seed and swine. DEKALB
Genetics Corporation Class B Common Stock is traded on the New York Stock
Exchange under the symbol DKB.
Forward-looking statements are subject to several risk factors that could
cause actual results to differ from projections. Among these factors are the
company's relative product performance and competitive market position,
weather conditions, commodity prices, trade policies, market conditions, and
intellectual property matters.
SOURCE DEKALB Genetics Corporation
-0- 12/2/97
/EDITOR'S NOTE: Roundup Ready(R) is a trademark of Monsanto Company.
TopCross(R) is a trademark of DuPont Company, Inc./
/CONTACT: David R. Wagley, Vice President and Treasurer of DEKALB,
815-758-9383/
/Company News On-Call: prnewswire.com or fax, 800-758-5804,
ext. 262250/
Companies or Securities discussed in this article:
SymbolNameNYSE:DKBDekalb Genetics Corp Cl B |
