Jul 02, 2019 07:46 PM

ChemChina Chief ‘Confident’ in Subsidiary Syngenta, Despite Ambassador Slapdown

ChemChina bought Swiss agrochemicals giant Syngenta in June 2017 for $43 billion. Photo: IC Photo
ChemChina bought Swiss agrochemicals giant Syngenta in June 2017 for $43 billion. Photo: IC Photo

* ChemChina’s $43 billion takeover of Syngenta left it loaded with debt and open to questions about its ability to integrate the Swiss company

* However, current executives, including ChemChina Chairman Ning Gaoning, stand by the deal, the largest ever foreign acquisition by a Chinese firm

(Beijing) — Ning Gaoning, chairman of China’s state-owned chemical giant China National Chemical Corp. (ChemChina), insists he is confident in subsidiary Syngenta and says there is no plan to sell the Swiss agrochemicals business.

ChemChina’s $43 billion takeover in 2017 of the Swiss giant — the world’s third-largest seed supplier and top pesticides-maker — remains the largest overseas acquisition by a Chinese company.

Concerns persist about whether the Chinese buyer will be able to integrate the new business. Last week, China’s ambassador to Switzerland, Geng Wenbing, reportedly told Swiss media outlet Tages-Anzeiger that the deal was a mistake. “If Switzerland wants to have Syngenta back, I will convince ChemChina to sell the company again,” Geng said, without giving a specific reason for his position. “If I had become ambassador here a year earlier, the takeover wouldn’t have happened. It wasn’t a good deal for the Chinese side.”

The acquisition has spurred concerns in Switzerland that such direct investment backed by a Chinese state-run company could bring job losses and national security risks. Swiss politicians are debating whether a measure is required to approve sales of Swiss companies to foreign ones — despite the Swiss government saying laws limiting foreign investment are unnecessary.

Criticism in the Swiss press has driven potential Chinese investors to look elsewhere, Geng said.

The aggressive acquisition has also pushed up ChemChina’s debt ratio. By the end of September 2017, the company reported a debt-to-asset ratio of 74% with liabilities of 586.5 billion yuan (85.6 billion), up from 305.8 billion at the end of 2016, which was just before the takeover.

Speaking on the sidelines of the World Economic Forum’s Annual Meeting of the New Champions in Dalian, also known as the “Summer Davos,” Ning told Caixin ChemChina had no plan to sell Syngenta and was instead pursuing a plan to grow the business. “(Syngenta) will have a great contribution to the agricultural industry, especially in the Chinese market,” Ning said.

In January, Syngenta CEO Erik Fyrwald said in an exclusive interview (link in Chinese) with Caixin that the merger had been going smoothly. He said the company was now able to work closely with key ChemChina and SinoChem subsidiaries, such as pesticide-maker Hubei Sanonda Co. Ltd. and China National Seed Group Co. Ltd.

Fyrwald said Ning was “very focused on how we can better grow the company and have better profitability and better service to the customers, especially in the Chinese market.”

“We know the global market very well as Syngenta, and we have worked many years in China with mixed results. We haven’t had such a big business in China compared to the rest of the world,” he said.

With the know-how of its Chinese buyer, Syngenta was able to better understand China and draw more opportunities from the different business units of SinoChem and ChemChina, Fyrwald said.

Founded in 2004, ChemChina was based mainly on the assets of a chemical company created by founding Chairman Ren Jianxin that had acquired and consolidated more than 100 state-owned petrochemical enterprises. ChemChina expanded rapidly through a slew of high-profile acquisitions in recent years, but carried heavy debts as most deals were heavily leveraged.

As part of efforts to reduce ChemChina’s debt after the Syngenta takeover, ChemChina merged with cash-rich state rival Sinochem Group the following year. Ren, the long-serving chairman of ChemChina, retired and Sinochem Group Chairman Ning has served as the chairman of ChemChina since then.

Additional reporting by Bloomberg

Contact reporter Tang Ziyi (

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