Monsanto, the world's largest seed company, plans to open its first plant in Russia in coming years, stepping up its activities in the world's fourth largest grain producer as it seeks to counter the effects of a plunging rouble.
The rouble has almost halved in value against the dollar in the past year, hit by falling oil prices, a crumbling economy and political tensions, making local production more attractive.
"We have plans to increase local-produced seeds in Russia and to have a facility there," Leticia Goncalves, who heads Monsanto's operations in Europe and the Middle East, told Reuters in an interview on Thursday.
Monsanto currently operates in Russia through a network of local partners and distributors.
Goncalves declined to name them or give financial details of the firm's ongoing or future business in the country.
Last year the company said it would launch a corn seed plant in neighbouring Ukraine, whose currency has also dived, with initial investments of about $140 million possibly rising to $300 million over several years.
Ukraine is the world's sixth largest grain grower this season, and Goncalves said the region remained a priority for Monsanto.
"We still believe that Ukraine and Russia both are long-term opportunities for our business and we want to make sure we are in a position to accelerate our business growth despite the short-term geopolitical and macroeconomic challenges," she said.
Genetically modified organisms (GMO) are not used in seed production in Ukraine and Russia, as is generally the case in the European Union, which has been historically hostile to biotech crops.
No Comeback on EU GMO Market
Despite a recent EU policy shift that some anti-GMO activists said might usher in GMO crops, Goncalves said Monsanto did not plan to try to reintroduce biotech products in the bloc.
Monsanto, whose MON 810 maize (corn) is the sole GMO crop allowed for cultivation in the EU, withdrew all pending approval requests to grow other GMO crops in the EU in 2013 due to a lack of commercial prospects there.
The EU reached a compromise last week giving member states the possibility to ban cultivation of a GMO, while opening the way for EU authorities to review pending approvals.
But Goncalves said it would be very difficult to operate in a non-unified market.
"You can imagine movement of illegal seeds between a country that has GM and a country that is not favourable," she said.
Past experiences showed GMO seeds stolen in Argentina being illegally planted in Brazil, she said.
Growth in the EU could instead come from the firm's core business of fruit and vegetables seeds, conventional row crops and crop protection products, as well as future technologies.
The company plans to invest at least 500 million euros ($574 million) over 10 years to expand seed production in Europe.
It had already injected $150 million into two French plants, Goncalves said.