Syngenta faces US distrust of China

Syngenta faces a challenge in the United States: avoiding the perception that it threatens national security. An article published by the Wall Street Journal today highlights problems in the relationship between the company that belongs to ChemChina, a Chinese state-owned company, since 2017, and some North Americans.

Jeff rowe (in the photo), the company's executive director since January, needs to deal with the problem. One of the fears is Syngenta's ownership of land for research and development. The company owns about 600 acres of American farmland, and several states are tightening restrictions on foreign land ownership. Parliamentarians fear that China could use these lands for espionage or influence food supplies in the event of conflict, as pointed out by the Wall Street Journal.

Land ownership by foreign countries, directly or through third parties, has been a topic of great international complexity over the years. Although, legally, there is no sovereignty of one country over the territory of another (the “sovereignty” of embassies is one of the myths of Brazilian popular culture…).

In the midst of this, Rowe tries to reassure politicians, highlighting Syngenta's positive impact on the agricultural economy, the number of jobs created and the products launched for farmers.

“If someone sees me on the street in Princeton, my hometown, they think 'that's Jeff Rowe. I know who he is — he’s not a Chinese spy,'” Rowe told the Journal.

In addition to geopolitical issues, Syngenta is facing a decline in farmers' spending, due to the fall in grain and chemical product prices. To give an idea of ​​the scale of these challenges, in the balance sheets for the first quarter of 2024, the Chinese company reported sales of US$3,2 billion (US$7,4 billion from Syngenta Group). The German Bayer presented a figure of US$8,6 billion (€7,9 billion). Obviously this result is a mere reference, with meaning limited by several factors. But, just to compare, in the full 2023 financial year, Syngenta Group earned US$32,2 billion against Bayer Crop Science's US$25,16 (€23,2 billion) (does not consider sales from the human health division) .

To deal with the situation, the Journal reports, Syngenta is looking to cut costs in office operations and the supply chain. Plans for an IPO in China or Europe are on hold, and political tensions make a New York IPO unlikely.

Tensions between the US and China have been increasing since the purchase of Syngenta. Similar concerns led Grand Forks, North Dakota, to block construction of a $700 million Chinese corn factory.

Some 24 states have passed laws restricting foreign ownership of farmland, some specifically targeting China. According to the Wall Street Journal, Chinese entities own about 1% of US agricultural land, approximately 142 thousand hectares.

Rowe says his role as CEO requires an understanding of the US and China, and the ability to build bridges between the two countries.