July 20, 2012
Written By Richard C. Young
“Syngenta AG (SYT – yield 2.20%)— In Brazil, Vietnam and Indonesia, Syngenta has had success turning wayward agricultural economies into powerhouse food producers. By supplying technology and training, Syngenta turned Vietnam into a major rice exporter. Now, says CEO Mike Mack, Syngenta is poised to attempt the same in Africa. Over the last ten years, six of the ten fastest- growing economies were African.
“The continent has a rapidly expanding middle class that will grow to 100 million by 2015, from 60 million today. The middle class in Africa is developing a consumer culture, and they want better food, including more protein. Syngenta is helping African farmers supply it. One of Syngenta’s major successes in Africa has been in selling crop insurance in Kenya. Before a drought in 2009, only 200 farmers had purchased insurance. After the drought, the insured farmers were paid, showing others the benefits of insurance. Today Syngenta protects 46,000 farmers. Syngenta is focusing on seven countries: Ethiopia, Ghana, Ivory Coast, Kenya, Mozambique, Nigeria and Tanzania. This will be a small part of Syngenta’s business for years to come, but long-term potential exists. Africa has three times more arable land than agricultural heavyweight Brazil. You can see Syngenta sitting slightly below trend on my long-term chart. Don’t let inertia prevent you from buying shares today.”
Richard C. Young, Richard C. Young’s Intelligence Report, August, 2012