Corn Products and Latin American Markets Help Fuel Monsanto's Profits

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Researched by Industrial Info Resources (Sugar Land, Texas)--Monsanto Company (NYSE:MON) continues to develop innovative and profitable products. This was the message given by Robb Fraley, Monsanto's Chief Technology Officer, at the company's R&D Pipeline Review held recently in London. Monsanto recently reported first quarter 2009 net income of $556 million, more than double 1Q08's income of $256 million. The boost in sales comes in large part from the company's expansion into Latin America.

At the review, Fraley discussed two products in the developmental stages intended for the Brazilian market. These included Roundup-Ready sugar cane, which will contain a gene making the crop resistant to the Roundup herbicide and possibly genes to help minimize damage from insects. Monsanto is also developing a soybean that is engineered to resist damage from pests specific to Brazil and South America, which take quite a toll on the soybean crop.

For the U.S. market, Monsanto is developing various forms of soybeans and corn. The company's SmartStax corn combines increased protection against corn earworm above ground and rootworm below ground. SmartStax was submitted to the Environmental Protection Agency (EPA) for approval on June 16, 2008. The company is also the first to develop a drought-tolerant form of corn, which could increase yields in water-stressed environments 6-7%. Initial submission to the EPA for this type of corn was made in December 2008.

Industrial Info is currently tracking $531 million of Monsanto's projects in the U.S. Not surprisingly with the two recent EPA submissions for corn, Monsanto's larger projects in the U.S. involve grassroot construction or expansion of corn-seed production plants. In July 2008, Monsanto completed an $85 million expansion of a corn-seed processing plant in Kearney, Nebraska. The company is currently constructing a grassroot corn-seed processing plant near Waco, Nebraska, and expanding an existing processing plant in Boone, Iowa. These projects each have a total investment value of $70 million and are expected to be complete in late spring/early summer of this year. Information on these and other Monsanto projects can be found at Industrial Info's North American Industrial Database.

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