By Dominique Patton
BEIJING (Reuters) - As China prepares to open its $120 billion corn market to genetically modified (GM) seed, little-known Dabeinong Biotechnology hopes to reap the benefits of early biotech investments and a law keeping foreign firms on the sidelines.
The long-anticipated commercialization of GM corn in the world's No. 2 producer is set to significantly boost yields, reducing the need for imports. It may also spur hoped-for reform of a chaotic and oversupplied seed sector, industry experts say, creating a new multibillion dollar market that may eventually open up to global seed giants.
New regulations drafted last month lay out for the first time the steps needed in China for approval of corn varieties that integrate GM traits, paving the way for the market to open as early as next year.
Beijing has made clear it will champion home-grown leaders in seed technology, and Dabeinong is the larger of two local companies with an insect-resistant and herbicide-tolerant corn already approved as safe by the agriculture ministry.
"For the first two years, because we're the first mover in the market, and we believe our technology is better, we'll have two thirds of the share," general manager Liu Shi told Reuters.
By the third year, even with more competition, it could generate around 1 billion yuan ($155 million) in royalties, he estimated. The company will rely on seed breeders using its traits to generate revenues.
ME-TOO PRODUCTS
Dabeinong Biotechnology was founded in 2011 as a unit of large animal feed producer, Beijing Dabeinong Technology Group Co. Ltd.
The parent firm made headlines in the United States after a senior executive was among several people charged with stealing corn seed from fields in Iowa and Illinois. The executive, the brother-in-law of group founder Shao Genhuo, was jailed for three years in 2016.
Dabeinong strictly abides by the law and is trying to rebuild its image, said Liu, who joined the company earlier this year. He previously worked at Monsanto, now part of Germany's Bayer, in the 1990s when the GM pioneer was trying to get its first products accepted.
Dabeinong, with a staff of 160, hopes to emulate the success of the U.S. seed giant, but above all wants to help farmers, Liu said.
For now, Dabeinong's corn traits use genes that were discovered and commercialised by other firms but are off-patent. The biotech firm is working on its own genes, although these are yet to be approved.
It may need to move quickly before its "me-too" products lose their value, said an executive at a multinational seed company who declined to be named.