Syngenta, a Swiss agrochemicals company, forecasted a significant drop in crop output in Ukraine this year when it announced its fourth-quarter results on Thursday. "We hope to save roughly two-thirds of what would normally be possible," a spokesperson said on Thursday, referring to the harvest of Ukrainian crops. "We do not anticipate a total failure."
The Chinese-owned company sells crop protection products as well as seeds and hopes to raise $10 billion in an initial public offering. It stated that it was now selling these at a cost in Ukraine in order to ensure a maximum harvest.
"We are on the verge of a global food crisis," CEO Erik Fyrwald said in a LinkedIn post, referring to infrastructure destruction, transportation disruptions, and land and water contamination, which he said were making it impossible for farmers to work.
Aside from the conflict, he said the current growing season was being impacted by unprecedented floods, droughts, and high levels of pest infestation.
Ukraine is a major global agricultural producer and exporter, and Russia's invasion is expected to significantly reduce the 2022 harvest, with Agriculture Minister Roman Leshchenko telling Reuters that the country's spring crop sowing area may more than halve this year.
Syngenta employs approximately 730 people in Ukraine and approximately 800 in Russia. It stated that it has no plans to leave Russia. Crop production is exempt from the sanctions imposed on Moscow.
Ukraine and Russia each accounted for less than 2% of group sales, according to the company. It reported a 17 percent increase in fourth-quarter sales to $7.2 billion across the board, owing to farmers investing in seeds and sprays to boost production.
It said it had increased revenue from its training centres in China, where it planned to open 167 new locations in 2021, bringing the total to 492. The sites provide farmers with training in the most up-to-date agricultural techniques as well as equipment, seeds, and pesticides.
Syngenta stated that it had continued to manage its supply chain despite procurement and other issues. EBITDA (earnings before interest, taxes, depreciation, and amortization) increased 4% to $1.1 billion in the fourth quarter.
Syngenta, which competes with Bayer (BAYGn.DE) in Germany and Corteva (CTVA.N) in the United States, was purchased by state-owned ChemChina (CNNCC.UL) in 2017 for $43 billion and is currently considering a flotation.
