By Dominique Patton

BEIJING (Reuters), – China’s $120billion corn market is being opened to genetically engineered (GM) seeds. Little-known Dabeinong Biotechnology is hoping to benefit from early biotech investments as well as a law that prevents foreign companies from participating.

Commercialization of GM corn is a long-awaited event in the No. The world’s No. 2 seed producer will significantly increase yields and reduce imports. The industry experts predict that it could also help to reform a chaotic and undersupplied seed sector.

The first steps to approval in China of corn varieties containing GM traits were laid out last month by new regulations.

Beijing made it clear that Beijing will support home-grown seed tech leaders. Dabeinong, the bigger of the two local companies has an herbicide-tolerant and insect-resistant corn approved by the ministry.

Liu Shi, general manager, stated that “for the first two year, because we are the first to move in the market and we believe technology is better,” and would have two thirds.

Even with greater competition, the company can still generate revenue of around 1 Billion Yuan ($155 Million) per year. He estimates. To generate revenue, the company will depend on its genetic traits being used by seed breeders.

ME-TOO PRODUCTS

Dabeinong Biotechnology was started in 2011 by Beijing Dabeinong Technology Group Co. Ltd. as a large-scale animal feed producer.

After a senior executive was charged with taking corn seed from Illinois and Iowa fields, the parent company made national headlines. Shao Genhuo was the brother in law of this executive and was sent to prison for three years.

Liu said that Dabeinong is committed to the law and is working hard to improve its image. Liu was hired earlier in the year. He was previously employed at Monsanto (NYSE:), part of Germany’s Bayer Group (OTC):, in 1990, when GM was still trying to accept its first product.

Dabeinong has 160 employees and hopes to replicate the U.S. Seed giant’s success, Liu stated. But, most importantly, he wants to help farmers.

Dabeinong’s corn varieties use gene that were commercialised and discovered by other businesses, but which are currently off-patent. Although the biotech company is currently working to develop its own genes they are still being approved.

An executive from a multi-national seed company said that it may be necessary to act quickly to prevent its “me too” products losing their value.

Dabeinong has increased its commercial staff to ensure that it is a first-mover and invited seed companies in September to inspect trial plots located in Inner Mongolia, Henan and Henan with corn bearing its Fengmai branding traits.

There are almost 200 licensed seed companies.

COMPETITION IS COMING

It is probable that early demand will be high.

China harvested 261 Million Tonnes of Corn in 2020/21 on 41,000,000 hectares. This was largely because it needed to feed its enormous herds of chickens and pigs. The average yield per hectare was only 60% higher than in the No. United States, No. 1.

An October report in China Seed Industry Journal revealed that 70% of China’s corn seeds are illegally bred GM. It highlighted its popularity among Chinese farmers.

But Dabeinong is not going to be left alone.

Global seed giants such as the U.S. are still based in America, Corteva (NYSE:) Bayer, Inc., and Syngenta cannot compete in China’s GM Market. Syngenta is No. China’s Sinochem Holdings owns 3 seed producers and expects to be market leader.

Syngenta, a key player in GM grain production, was acquired in 2017. However it is currently playing catch-up in China as the long-running process of obtaining biosafety certificates from regulators for its GM traits.

Hangzhou Ruifeng Biotechnology is a small company founded by Shen Zhicheng. It uses an insect-resistant and herbicide-tolerant trait, which Beijing has approved. Some new genes were also used by the company.

Yuan Longping High-tech Agriculture Co Ltd is developing GM traits. It’s backed by the state-owned conglomerate CITIC.

GM Corn’s precise timing is not yet known.

New rules require seed varieties incorporating GM traits to undergo a 1-year production trial. Beijing may not accept any data that has been collected by Dabeinong.

Liu stated that they have two plans. One is for the commercial seed production of 2022. The other one is for 2023. We are still waiting to hear from the government.

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