• Bloomberg


Sakata Seed Corp. is betting that rising demand for its disease-resistant hybrid “F1” seeds will help the company triple its market share in India.

The seed wholesaler accounts for about 1 percent to 3 percent of the F1 and “open pollinated” vegetable seed market in India, and plans to increase it to 10 percent by 2018, according to Chief Executive Officer Hiroshi Sakata. That would place the company in the top five vegetable seed wholesalers in India.

F1 seeds are first-generation offspring from cross-breeding of two different parents.

“About a quarter of the seeds used in India are F1 seeds. I see that ratio increasing to more than half as India’s economy grows, and shifts from cheaper seeds that are produced through open pollination,” Sakata said in an interview in Tokyo. “It won’t take long for that to happen. It’s our business opportunity.”

His company, Japan’s largest listed seed wholesaler, is betting on demand for higher-yielding F1 seeds rising in India as rising wages in an expanding economy makes the seeds more affordable. India’s economy is expected to grow 8.8 percent this year, compared with 1.9 percent for Japan and 1 percent in the euro area, according to the International Monetary Fund.

Sakata Seed, based in Kanagawa Prefecture, is aiming for ¥300 million in sales in India by next fiscal year and ¥500 million by 2013. The company declined comment on last year’s sales in India.

About 90 percent of the seeds the company produces are of the F1 variety. Disease-resistant hybrid seeds are more expensive but provide at least two to three times higher economic returns from their yield and quality than open pollinated cultivars, according to the United Nations Food and Agriculture Organization.

“I don’t think Sakata’s F1 seed marketing in India will be up on its feet running as fast as they expect,” said Masanobu Mizuta, an analyst at Toward the Infinite World Inc., who has a “neutral plus” rating on the stock. “It’s still planting seeds for growth in the region, and it will take some time for farmers to truly see the benefits of expensive F1 seeds. But the fact that they have already set their eyes on India is a positive.”

Sakata Seed, founded in 1913 and listed on the Tokyo Stock Exchange since 1987, established a subsidiary office near New Delhi in May 2008.

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