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The Honolulu Advertiser
Posted on: Friday, September 19, 2008

Seed corn producer to expand Oahu operations, research

By Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser
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One of the largest seed corn producers in Hawai'i plans to expand its O'ahu operations following a purchase of 848 acres of former pineapple and sugar cane land in Kunia.

A subsidiary of Switzerland-based agribusiness giant Syngenta Inc. purchased the land earlier this month from local landowner James Campbell Co. LLC for $14 million, according to property records.

The deal will allow Syngenta Seeds Inc. to expand corn and soybean research and production, including work on genetically modified plants.

Syngenta's purchase also follows other large land acquisitions on O'ahu by two other major seed producers in the past two years that have helped catapult the seed industry this year into the biggest segment of agriculture in the state by crop value.

The National Agricultural Statistics Service last week estimated the value of Hawai'i's seed industry at a record $146 million for the season that ended earlier this year, up 42 percent from $103 million in the prior season.

The increase helped the seed business — nearly all of it seed corn — eclipse floriculture and nursery products as Hawai'i's top-earning crop by about $40 million this past season, and the industry dominance isn't expected to change anytime soon.

"The demand for seed is very strong right now," said Mark Hudson, director of the National Agricultural Statistics Service's Hawai'i Field Office, explaining that the production of corn-based ethanol has driven up prices and production of corn.

"It's no surprise," he said. "It all ties back to the demand for seed."

Seed companies are drawn to Hawai'i by the year-round growing season and thousands of acres of fertile soil made available with the continuing demise of sugar and pineapple. Isolation from other corn crops also is attractive for growing genetically modified seed because it reduces the chance that the seed might spread accidentally.

Syngenta is one of the world's leading seed producers, with global seed sales accounting for $2 billion of the company's $9.2 billion in revenue last year.

Part of Syngenta's business involves using emerging genetic technology and conventional breeding to develop plants with proprietary genes that help plants resist insects and diseases, enhance crop yields and even improve the efficiency of ethanol production.

The company's Hawai'i roots go back more than 40 years with operations in Waimea, Kaua'i, by predecessors including Novartis and Northrup King.

Syngenta was formed in 2000 by Novartis and AstraZeneca combining and spinning off their agribusiness units. In 2004, Syngenta acquired a presence on O'ahu when it acquired Garst Seed Co.'s operations in Kunia.

The Kunia land bought earlier this month represents the first parcel of Hawai'i land owned by Syngenta, which leases about 4,000 acres, mostly on Kaua'i. The new acquisition is adjacent to roughly 500 acres on which Syngenta operates in Kunia.

"It's a very valuable opportunity to up our game," said Ray Riley, head of global corn and soybean seed product development with Syngenta. "It's a commitment we're making to the development of people and ... what we do in Hawai'i."

Riley said expanding the company's Kunia operations will involve more investment in preparing the land and developing support facilities, and will lead Syngenta to shift its staffing from primarily third-party contractors to direct full-time employees, including high-paying tech jobs.

Syngenta has 75 employees in Hawai'i and works with another 200 to 300 outside workers.

Michael Austin, Syngenta's Kunia station manager, said the move will lead to greater investment in employee development. "It's an exciting time," he said. "We're seeing great growth."

There is some controversy tied to the industry from the point of view of some residents and environmentalists who fear that altering plant traits through biotechnology threatens the ecosystem if traits spread to other plants. Others believe genetically modified food can be harmful.

But Matthew Loke, administrator of the state Department of Agriculture's Agricultural Development Division, said there are studies that show the industry isn't harmful, and that seed crop expansion helps keep Hawai'i farmland in farming.

Other big seed producers have been actively acquiring land to put down firmer roots or expand operations in Hawai'i.

In July, Pioneer Hi-Bred International Inc., an Iowa-based affiliate of DuPont, bought 2,140 acres of farmland on O'ahu's North Shore from Dole Food Co. for $39.3 million.

Pioneer previously leased the Waialua property and part of it for corn seed production and evaluation of sunflower varieties for potential seed production.

Last year, Monsanto Co. bought 2,300 acres in Kunia from James Campbell Co. for $31.3 million. Monsanto, which also has operations on Maui, Moloka'i and Kaua'i, said 700 acres of the 2,300 acres would be open space.

Of Syngenta's 850 acres, the company estimates that about 300 acres aren't suitable for farming and will remain open space.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.