SL Agritech to sup­ply hy­brid rice seeds to In­dia

Business World - - CORPORATE NEWS - By Jan­ina C. Lim Re­porter Arra B. Fran­cia

IN a bid to boost its pres­ence abroad, hy­brid rice pro­ducer SL Agritech Corp. has signed a deal with In­dia’s Na­tional Seeds Corp. ( NSC) Ltd. for the pro­duc­tion, devel­op­ment, and mar­ket­ing of the former’s sig­na­ture seed va­ri­ety.

“Hy­brid rice is one of the tech­nolo­gies we see that can do won­ders. You don’t even have to ex­pand your rice ar­eas, ir­ri­gate more lands. Just change seeds [ and] you can im­me­di­ately in­crease your yield,” Kuldeep Singh, Na­tional Seeds se­nior gen­eral man­ager, said dur­ing a brief­ing on Thurs­day in Makati City after it signed the mem­o­ran­dum of agree­ment with SL Agritech.

The In­dian gov­ern­men­towned firm is look­ing to plant SL Agritech’s F1 or SL-8 hy­brid rice va­ri­ety on 2.5 mil­lion to 5 mil­lion hectares of land in the next five years.

To achieve this, Na­tional Seeds will in­crease the avail­abil­ity of hy­brid rice seeds in In­dia by cul­ti­vat­ing ten hectares this year and a hun­dred hectares next year.

“Just to main­tain food se­cu­rity in coun­try we need to ex­plore hy­brid rice seed,” said Mr. Singh, not­ing In­dia pro­duces hy­brid rice from about two mil­lion hectares or around 4.5% of the 44 mil­lion hectare-land area un­der rice cul­ti­va­tion.

Mr. Singh said the firm took sam­ples of the now adopted va­ri­ety two years ago and tested it in seven dis­tricts in In­dia to see if it brings fa­vor­able yields based on the area’s cli­mate and soil con­di­tions.

“SL Agritech is very good than oth­ers and [it was ap­proved]. After get­ting due ap­proval we are here to sign agree­ment,” said Mr. Singh.

SL Agritech Chair­man Henry Lim Bon Liong said the seeds can bring rice har­vests of two tons per hectare if cul­ti­vated in “ideal good con­di­tion[s].”

“It can go up for four tons per hectare. [Some] 15 to 18 ki­los can pro­duce more than 10 tons per hectare al­ready,” Mr. Lim said dur­ing the press con­fer­ence on Thurs­day.

Mean­while, SL Agritech has been granted the sec­ond high­est rat­ing for the P2-bil­lion com­mer­cial pa­pers it plans to is­sue.

In a state­ment re­leased Thurs­day, Philip­pine Rat­ing Ser­vices Corp. ( PhilRat­ings) said it gave the hy­brid rice seeds and pre­mium rice pro­ducer an is­suer rat­ing of PRS Aa, in­di­cat­ing a pos­i­tive out­look for the com­pany’s growth prospects.

The dou­ble “A” rat­ing means the com­pany has a strong ca­pac­ity to meet its fi­nan­cial com­mit­ments, while a pos­i­tive out­look in­di­cates the rat­ing has a chance to be up­graded in the next 12 months.

The lo­cal debt watcher at­trib­uted the high rat­ing to SL Agritech’s mar­ket po­si­tion as well as fu­ture plans.

“SL Agritech is re­port­edly the only ver­ti­cally in­te­grated rice com­pany in the coun­try, with its knowl­edge and ex­pe­ri­ence en­com­pass­ing the en­tire value chain – from hy­brid rice seed re­search and devel­op­ment to pro­duc­tion and mar­ket­ing,” PhilRat­ings said in a state­ment.

PhilRat­ings fur­ther noted the com­pany’s sta­ble fi­nan­cial po­si­tions, cit­ing that its net in­come for the fis­cal year end­ing May 31, 2017 ac­cel­er­ated 10.9% to P509.2 mil­lion due to ro­bust sales in both hy­brid sales and hy­brid rice.

“Over the pro­jected pe­riod, SL Agritech ex­pects net in­come to re­main ro­bust. Earn­ings growth will con­tinue to be sup­ported by strong rev­enue gen­er­a­tion, cou­pled with con­trolled cost man­age­ment,” ac­cord­ing to PhilRat­ings.

In ad­di­tion, PhilRat­ings said the com­pany will ben­e­fit from the na­tional govern­ment’s on­go­ing efforts to strengthen the agri­cul­ture in­dus­try. Over­seas, SL Agritech has also been ex­pand­ing the pro­duc­tion of its hy­brid rice seed through for­eign di­rect in­vest­ments in Myan­mar, In­done­sia, and Bangladesh.

SL Agritech is part of the Ster­ling Pa­per Group of Com­pa­nies owned by the Lim fam­ily. The di­ver­si­fied con­glom­er­ate has busi­nesses in the man­u­fac­ture of pa­per prod­ucts, im­por­ta­tion and dis­tri­bu­tion of school and of­fice sup­plies, fur­ni­ture, re­tail­ing, real es­tate devel­op­ment, and agri­cul­ture. — with

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