Brussels, Dec. 11 - BASF AG said Tuesday it's confident it will soon win European approval for a genetically modified potato, a move which would boost the German company's plans to reduce its reliance on the cyclical chemical business.
The Ludwigshafen-based company needs European Commission approval of the Amflora potato soon if it is to prepare it for planting next spring.
Amflora's more favorable form of starch will be used for coating glossy paper and for adhesives.
"We're still looking forward to getting approval in time to cultivate next year," Hans Kast, BASF's head of plant science, said at a press briefing.
If approved, BASF expects up to EUR30 million in peak licensing income from Amflora annually. BASF has plowed a "significant double-digit" amount of its overall EUR400 million budget for plant biotechnology research and development into Amflora, a product Kast believes could break even as soon as 2010.
Amflora is an important part of BASF's strategy to diversify from its chemicals focus and win a share of the plant biotech market, estimated by the company to reach $50 billion by 2025.
"This is an issue of when people will believe BASF is not as cyclical as it is now," ING analyst Paul Satchell said. Satchell rates BASF at buy with a EUR110 target.
Through deals such as BASF's $4.8 billion acquisition of New Jersey-based catalyst maker Engelhard Corp. and a $1.5 billion joint venture with Monsanto Co. to develop higher-yielding, stress-tolerant crops, the company is diversifying to offset the chemicals cycle, Satchell said.