The Syngenta saga goes on

The acquisition is not yet fully completed that we learn that ChemChina, the new Syngenta owner, is in merger talks with Sinochem to build the largest chemical company worldwide. This is not surprising; some rumors were already going into that direction last year. The Chinese government is facing a double challenge: on one side to revitalize the large state-owned companies to put themselves at par with global competition and innovation; and on the other side to restructure a sector where too many small operators grew almost overnight by entering generic manufacturing, and dumping on the local and the international markets products of doubtful quality, manufactured under low environmental and safety standards. ChemChina began being of the second kind, grew by acquisitions, is largely indebted, and is now to be tamed into a much larger construct of the first type.

All this is just one Chinese story to keep up with the rest of the industrial World, would you say. Of course, it is, but one should not forget the European companies that ChemChina acquired over the past decade; and managed, so far fairly well, at arm’s length. Syngenta Board and employees altogether were told that no structural or formal changes of their company would take place over the next five years. Only the one wanting to believe such promises can be disappointed, since such soothing talks are highly reversible when the owner of the owner gets changed.

So, not only all know-how accumulated over generations is now getting transferred 9’000 km to the East, but the current employees, before all competent managers, will be well advised to seek other job opportunities now, before being left alone on the curbside within a couple of years.

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Well, I do not wish Basel, nor Switzerland for that matter, a gloomy future, but if I were responsible for the government coffers, employment and the welfare of the economy at large, I would pronto get clear thinking, able heads together, come up with credible plans how to stem and reverse a foreseeable exodus of know-how, R&D and production.
As the author indicates, give it another M or A, another budget cycle (‘those cost in CH are insane…’), add some old Chinese command-and-execute management style, and Syngenta will be dispersed abroad, with little left in good ole’ Switzerland – especially if, in addition, certain NGO’s miss no opportunity to vilify Syngenta. With no other compelling reasons, who wants to remain in such a hostile environment?

The Syngenta saga goes on

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