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PGG Wrightson gets government backing in $14.6M seeds research

Thursday 4th October 2012

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PGG Wrightson, the New Zealand rural services group controlled by China's Agria, has won government backing for a $14.6 million research programme that aims to improve seed quality and plant species.

The government will invest $7.15 million over six years through its Primary Growth Partnership fund in a Wrightson-led initiative to lift animal productivity and reducing environmental impacts, the Ministry for Primary Industries said in a statement. The balance will be picked up by Wrightson and its research partners.

The programme seeks to establish faster and more reliable pasture, increase pasture productivity and persistence, cut greenhouse gas emissions, improve animal health and lower susceptibility to summer droughts.

"Co-funding of these projects by government and industry is what PGP is all about," Primary Industries Minister David Carter said in a statement. "Every New Zealander stands to gain from innovative investment in the primary sector because our food, fishing, fibre and forestry industries are pivotal to the success of the economy."

Wrightson's seeds business was widely seen as the attraction for China's Agria Corp taking a controlling 50.01 percent stake in the company in a $144 million deal. Its agri-tech unit, which has been building its seeds business, increased revenue 3.6 percent to $435 million, though earnings fell 21 percent to $30.1 million in the latest financial year.

Derek Woodfield, PGG Wrightson Seeds general manager of research and development, said the funding will let the company build a suite of new technology to keep New Zealand farmers internationally competitive.

Wrightson shares were unchanged at 35 cents today, and have shed 7.9 percent this year. The stock is rated an average 'outperform' based on five analyst recommendations compiled by Reuters with a median target price of 43.5 cents.

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