As part of its global strategy, Sakata Seed Corporation will set up a local subsidiary in Argentina, South America's second largest vegetable seed market. It is the third South American subsidiary, which is scheduled to be established in April 2018. By creating the local subsidiary, Sakata Seed aims to accelerate its sales activities in Argentina and further promote collaboration with its overseas business hubs, thereby enhancing its global business.
The local subsidiary will be named Sakata Seed Argentina S.A. (tentative name) and its address will be in Buenos Aires. It is a subsidiary capitalized at 17 million Argentine pesos (approximately 109 million yen), 95% of whose stock is owned by Sakata Seed Corporation. Its line of business is the import, sale, and test cultivation of plant seeds. The number of employees will be four at the time of its founding. We plan to achieve unconsolidated sales of 620 million yen for the subsidiary in four years after its founding and 930 million yen in eight years.
Argentina returned to the international financial market in 2016, after Mauricio Macri was inaugurated as the new President in December 2015. The environment for investments from overseas is also currently being developed, raising expectations for the country's economic recovery and growth. Argentina's population is 43.41 million, the third largest in South America after Brazil and Colombia, which, along with the ongoing economic recovery, makes it likely for Argentina to achieve a significant increase in domestic consumption as well as business expansion in the near future. The annual per-capita consumption of vegetables in Argentina is approximately 70 kg, exceeding the per-capita consumption in Brazil (50 kg). Accordingly, Argentina's vegetable seed market is the second largest in South America next to Brazil.
Sakata Seed is working to enhance its sales in South America. We have been selling vegetable seeds through agencies in Argentina. However, new needs and trends are likely to grow in the country's vegetable market as a result of its recent economic recovery. To quickly provide services tailored to meet such needs and market trends, we have decided to establish the local subsidiary. In addition to squash and broccoli, our current major sales items, we will also enhance our sales activities by focusing mainly on high-quality fruits and vegetables that are suited to cultivation in Argentina. Sakata Seed will promote collaboration with its overseas business hubs, thereby enhancing its global business system.
【Reference materials】 Since 2004, we have been developing genetic resources in Argentina on the basis of the Convention on Biological Diversity. The garden plant "Mecardonia yellow chrosite" of the Scrophulariaceae family, released in Japan in November 2007, was developed by our company on the basis of the joint exploration of genetic resources by the Argentina's National Agricultural Technology Institute (INTA) and Sakata Seed Corporation. Part of the revenue from the product is returned to Argentina based on the Agreement for Access and Benefit-Sharing of genetic resources from the Convention on Biological Diversity and helps protect the country’s biological resources.