Seed Co to offload 49pc of Quton
Martin Kadzere Senior Business Reporter
SEED Co Ltd is close to selling part of its shareholding in Quton, a cotton seed developer, to an Indian company Mahyco for a yet to be disclosed amount, sources said.Seed Co announced last year that it was looking for a technical partner for Quton, a company it owns 100 percent, which would bring expertise on the development of cotton hybrid seed. The stake is between 43 and 49 percent.
Yesterday, Quton managing director Mr Edward Mhandu would not be drawn into revealing finer details, but said “why can’t you wait for one or two weeks for an official announcement?”
However, a source said Seed Co, a ZSE-listed entity and Mahyco were close to sealing the transaction.
“Remember the company announced at its analyst briefing that it was looking for a technical partner for its subsidiary, Quton. Many suitors expressed interest,” said the source.
“However, the negotiations with Mahyco prevailed and the parties (Seed Co and Mahyco) are finalising on the shareholding and the price for the stake (to be disposed).”
Seed Co acquired Quton, a cotton seed company, from Cottco in 2006 in a share swap deal. Cottco increased its stake in Seed Co from 40,95 percent to 50,52 percent through the sale of the entire issued share capital of Quton in exchange for 29 656 750 new Seed Co shares.
Efforts to get a comment from Seed Co chief executive office proved fruitless by the time of going to print yesterday. Quton is the only cotton planting seed company in Zimbabwe and its main role is breeding, processing and marketing cotton seed to largely smallholder sectors in the SADC region.
The company has made headway in incorporating genetically modified herbicide-tolerant and insect pest resistant varieties and has been awarded a seven-year exclusive multiplication agreement in Tanzania. It also exports to Mozambique and Malawi.
Locally, the company supplies cotton seed to more than 200 000 small holder farmers. Mahyco is the pioneer in the cotton seed business. It has developed a strong cotton product portfolio which comprises 19 value added cotton products which are available for Indian cotton growers of North, Central and South zones of that country.
Unlike Quton which specialises in pollinated seed variety, Mahyco offers cotton hybrids with perfect combination of germ-plasm and technology. The hybrids produce higher yields than pollinated varieties and they are drought resistant.
Apart from producing hybrid cotton seed, Mahyco also produces hybrid field crops and hybrid vegetables. The company also offers farmers a wide range of products and train them in building their confidence and expertise.