While agribusiness is in a low phase of its cycle, the Syngenta situation is far from being resolved. On one hand, financial results are not at the height of [too greedy?] expectations of shareholders, and on the strategic side the jury is still out to know if the integrated approach taken since 2011 will actually deliver on its promises. But overall, farming and agribusiness have a bright future and face great challenges, as it has had since millennia.

Last year’s take-over offers of Monsanto, rumours about discussions with DuPont prior to the announced Dow-DuPont merger, and current speculations about acquisition intentions of ChemChina, CEO resignation: the company is in turmoil, at least at its capitalist edge.

An unusual debate is now taking place on the public area, in the Basler Zeitung, the local newspaper of the home-town of the company. Last Monday, Folke Rauscher, an investor relation specialist claiming to be representing a group of dissatisfied shareholders, was exposing his critique, and today we can read counterarguments presented by the vice-chairman of the Board. Such discussions are usually made behind closed doors while clients, employees and other stakeholders are being told, after the facts, that details will not be disclosed.

Mr Rauscher arguments reflect the habitual uninvolved but interested shareholder’s view: financial objectives are not achieved or just cosmetically improved; Board and Management have proven their incompetence and have lost faith in their ability to drive the company out of difficult times; merger ideas with a state owned Chinese company are bizarre. He asks for a complete overhaul of the Board and of the management team.

Jürg Witmer, writing in his name and not on the behalf of the company, is member of the Syngenta Board since ten years, he is also Chairman of Givaudan, a highly successful fragrance company which he led as CEO for many years. He explains that Monsanto’s offer had been thoroughly reviewed before being rejected; that the company has a solid, well diversified product portfolio, founded on innovation; and that with its “good growth plan” an ambitious strategy is being followed to address the needs of a modern agriculture. While acknowledging that the implementation of this strategy has not been perfect, also due to decreasing commodity prices, he considers that the company is on the right path. Also he explains that even if, at the end, any decision belongs to the shareholders, considerations must be given to customers and employees without whom the company cannot create any value. Apparently he is confident that the company should be able to succeed on its own, although he would welcome the support of a long term thinking strategic investors who could also help open the door to new markets (without specifically naming them: India and China). Who would not welcome such an ideal investor?

Thus on one side we have the “normalized” capitalist, asking for return on investment and for compliance with set goals (meaning dividends or share buybacks), but not considering if the set goals make sense, probably because such uninvolved investor cannot grasp the content and the dynamics of the business at hand. And on the other side, the representative of a responsible governance, aiming at a sustainable success of an enterprise, taking shareholders as what they are: a component of a larger whole. What is new is a debate that is not taking place between business schools professors or among intellectuals, but in which the current actors explain their views while the game is far from being over.

My opinion: the vice chairman, a better communicator than the chairman, and the representative of dissatisfied shareholders don’t fundamentally disagree: a take-over for the sake of shaking out the company does not make sense; any merger among the few global players would be accompanied with huge divestments imposed by competition laws; Syngenta can succeed on its own; the Swiss R&D and fine chemistry production know-how are an irreplaceable assets; inroads into India and China must be accentuated; the company will have to critically review its strategy and its implementation because reality at the farmer’s side as well as within a complex organization may not fit the aimed goals; and a competent CEO is urgently needed.

As writes Witmer at the end of his article: on verra!

Merci de partager et de diffuser cet article !