S&W Seed Company expands into commercial hybrid sunflower production market

Date:02-08-2017

S&W Seed Company today announced it has commenced commercial seed production for one of the Company's proprietary hybrid sunflower seed varieties in New South Wales, Australia. This marks S&W's initial entry into the "vertical production model" for sunflower, a nearly $1 billion global crop. S&W anticipates that the transition into sunflower seed production will allow it to capture a higher gross profit dollar and move closer to the end customer. The move continues S&W's recent strategic initiatives to expand vertically by leveraging the company's key distribution and production capabilities.

S&W acquired the operations of SV Genetics' ("SVG") sunflower program in May 2016 with the goal of advancing deployment of the proprietary germplasm that exhibits high yield, high oil, disease resistance, and outstanding standability, on a global basis. The company has royalty-based sunflower licensing agreements with 5 partners in 6 countries that are currently increasing production, and commencing commercial-scale production of the hybrid sunflower operations is the first step in the company embarking on its dual strategy to further expand the company's opportunity within sunflower.

The vertical entry into a production-based model for hybrid sunflower follows S&W's recent vertical entry into the production of hybrid sorghum, and aligns S&W's operations more closely with its existing alfalfa seed operations where the company is currently one of the largest producers worldwide. S&W is initially producing the hybrid sunflower seed in the Murrumbidgee Irrigation Area of New South Wales, Australia, with initial end customer markets of Australia, South Africa, Brazil and Pakistan through distribution partners under both branded and private label programs. The variety being produced, SW-S6066, is a medium, late maturity sunflower that has historically performed extremely well in various regions of the world.

Mark Grewal, chief executive officer of S&W Seed Company commented, "We saw a significant opportunity in our acquisition of SVG to leverage our existing distribution and production infrastructure for the benefit of the sunflower program. We anticipate that the transition from strictly a royalty-based model to a vertically integrated research, production and distribution model for sunflower will allow for us to capture increased value of this healthy and high-performance non-transgenic vegetable oil that is gaining increasing popularity worldwide due to its high Vitamin E and low saturated fat levels. Sunflower seed production on a global basis is expanding and forecasted to rise further driven by strong demand in Asia, the EU, Africa and the Middle East. We look forward to the continued expansion of our sunflower program in the years to come."