Chairman's statement

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Ensuring choice and innovation for growers worldwide

"This change of share ownership allows Syngenta to remain Syngenta, a global company headquartered in Switzerland, focused on sustainable growth."

Michel Demaré
Chairman

2016 has been a momentous year for Syngenta and for the agriculture sector. In the wake of challenging market conditions and rising innovation costs, our industry has embarked on a wave of consolidation, which has a profound transformational impact for all the players involved. I am pleased that Syngenta, after a period of turbulence, has found a path that guarantees the Company’s long-term future and safeguards its identity. The option we have chosen is more a change of ownership than a consolidation move. Syngenta will remain Syngenta, as you have known it for years, with the same commitment towards food security, innovation and farmers, whatever the size of their farms.

The closing of such a transaction obviously takes time, as it requires review and approval from a large number of regulatory authorities. In the meantime, we are not standing still and waiting for the changes to happen. We have worked hard at adapting Syngenta to the new realities of our markets. Profound management changes, starting at the CEO level, are coupled with crucial simplification initiatives to make the Company leaner and faster to make decisions. We have clarified our strategy, giving our Seeds business a much more transparent focus and expanding our skills and capabilities, with an immediate, very positive response from our customers. We continue expanding and investing in our leading Crop Protection business with the same intensity. And we continue offering, wherever appropriate and in different forms, an integrated approach to our customers, tailor-made to their needs and expectations of what a broad portfolio company like Syngenta can offer them.

While the instability that beset emerging markets in 2015 to some extent subsided, market conditions in 2016 remained tough for the fourth consecutive year. Syngenta had already responded quickly to a more challenging environment with the announcement, in February 2014, of the Accelerating Operational Leverage program. This has already yielded substantial cost savings, and I have been impressed by the way in which the entire organization has adapted to the process and platform efficiencies put in place.

Innovation is vital

However, for a company like Syngenta, cost savings alone cannot drive longer term performance. Growth is the key factor for long-term success and, in our field, it means that our business is dependent on continuous innovation, whether this be in the form of new crop protection products, improved seeds or novel traits. The development timelines are long, often exceeding ten years. Regulation is becoming ever more demanding, meaning that the cost of bringing a new product to market increases while the certainty of achieving approval diminishes. When revenues are under pressure – as they have been in recent years – it becomes difficult to sustain Research and Development (R&D) at the necessary level. This dilemma has been one of the catalysts for industry consolidation.

ChemChina transaction reinforces strategy

The transaction with ChemChina will secure Syngenta’s long-term investment in innovation. ChemChina has recognized the value of our pipeline and of our world-leading scientists, and has explicitly committed to maintaining a high level of R&D spend in the coming years. This transaction reinforces our strategy of being a leading provider of technology and will ensure continued choice for growers worldwide. It will allow us to maintain a broad portfolio and geographic presence and to further strengthen our position in emerging markets, notably in China itself.

We are excited by the opportunity to assist in the ongoing modernization of Chinese agriculture, bringing not only our products but also our experience and know-how in promoting the highest environmental standards. Sustainability has always been at the core of our business model, impacting the way we do business on a day-to-day basis, and reinforced by our smallholder-focused initiatives through the Syngenta Foundation and the commitments contained in The Good Growth Plan. ChemChina has enthusiastically endorsed these values and principles, which are the foundation of our Company and will remain so in the future.

Transparency and partnership bring added value

In 2016, we made further progress towards meeting our Good Growth Plan targets for 2020. An expanding network of partnerships is enabling us to broaden our contribution by combining our skills with the expertise and reach of others. Data on each of the commitments is independently collected and validated and our open data policy allows people to make their own assessment of our progress. We are further promoting transparency as a partner in GODAN, the Global Open Data for Agriculture and Nutrition initiative, a public/private collaboration of more than 400 organizations that supports global efforts to make agricultural and nutritionally relevant data accessible and usable.

Living our company values

The launch of The Good Growth Plan in 2013 was not a new beginning for Syngenta – it represented a continuation and a quantification of a long-standing focus on sustainability. This focus has been embraced by the Company’s 28,000 employees and infuses its culture and values. In November, I was privileged to host the 2016 Syngenta Awards ceremony, at which outstanding teams from around the world were recognized for their contributions to those values and to the company purpose of Bringing plant potential to life. The entries were without exception inspiring, and I was deeply impressed by the passion, motivation and spirit of healthy competition that reverberated through the event.

Management changes

In May, after a rigorous search, the Board announced the appointment of Erik Fyrwald as Chief Executive Officer. Erik’s considerable experience in both agriculture and chemicals, along with his strong track record of success as a CEO, made him an excellent candidate for the role. I look forward to continuing to work with him to create the next chapter in Syngenta’s history.

After a career at Syngenta and legacy companies spanning 32 years, John Ramsay decided to retire from the Company at the end of September. John was instrumental in the foundation of Syngenta and served with distinction as Chief Financial Officer since 2007 and latterly also as Chief Executive Officer ad interim. I should like to thank John for leading the Company during a period of uncertainty with great skill and judgment.

I should also like to thank employees, who have worked tirelessly through a time of turbulence, for their dedication and loyalty.

Syngenta remains Syngenta

Many of Syngenta’s shareholders invested in the Company for the long term and remain invested today. I am glad that they will be amply rewarded through ChemChina’s recognition of the Company’s strategic value. This is a transaction that benefits not just shareholders but all stakeholders, including customers, employees and communities. This change of share ownership allows Syngenta to remain Syngenta, a global company headquartered in Switzerland, focused on sustainable growth and committed to helping growers worldwide achieve food security.


Michel Demaré
Chairman

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