Article

by Carey Gillam

ST. LOUIS, Mo., Aug 5 (Reuters) - As head of the world's largest seed company, Monsanto (MON.N) Chairman Hugh Grant is on a global quest for growth. And with the U.S.-based company's footprint firmly planted in the United States, that pursuit has turned south.

South America, particularly Brazil, is a top growth target now, Grant said in an interview with Reuters this week.

Friendly regulators, an influx of public and private investment into Brazilian agriculture and a population of farmers eager to help feed a hungry world are among the factor spurring the agricultural conglomerate to intensify its efforts there, Grant said.

"Brazil is critical to global agriculture, and therefore critical to Monsanto," Grant said.

The company's fresh five-year strategic plan - laid out for board members this week - includes an outlook for strong international revenue growth, with Brazil a key contributor. Sales in Brazil totaled $1.066 billion in 2010, about 10 percent of total company revenues. The company is aiming for strong growth going forward, Grant said.

To spur such growth in the key soybean-producing country, St. Louis-based Monsanto has been enlarging its Brazilian research teams, adding sales staff there and developing products aimed specifically at Brazilian farmer needs, investing more than $2 billion in fiscal 2010 in Brazil and Argentina.

The company is planning to launch a new genetically altered soybean seed - Monsanto's first product developed uniquely for a non-U.S. market - in fiscal 2013.

"Intacta" soybeans are designed to resist caterpillar pests common in Brazil and tolerate treatment of herbicide.

Investments in agriculture in Brazil, both by the public sector and a mix of private investors, including an influx of international capital, have helped the country improve efficiencies, increasing production even as acres have contracted, a factor noted by Grant.

The country is currently the second-largest exporter of soybeans, after the United States and the opportunity for production increases through yield enhancements is high, he said.

The country has a smaller concentration on corn production, but Monsanto is introducing new corn products there and sees that as a growth opportunity as well.

The recent acceleration of technology development work in South America has caused Monsanto to pull forward some of the money originally budgeted for 2012 into 2011.

China Also Key

Rising incomes and surging demand in China makes that country a top growth target for Monsanto as well, though over the longer term, according to Jesus Madrazo, leader of Monsanto's global commercial seeds and traits business.

Monsanto said it was deepening its ongoing alliance with Chinese chemicals conglomerate Sinochem Corp. The two companies have a hybrid corn seed joint venture, and Monsanto wants to strengthen its reach into the rapidly growing Asian corn market.

Madrazo said the focus on China is seen as a longer-term investments as limitations remain strict on foreign investments in agriculture.

(Reporting by Carey Gillam;editing by Sofina Mirza-Reid)