Wrightson says its decision to sell its stake in biotech company Genesis does not mean it has given up on developing improved pasture varieties.
The restructured rural services firm is committed to biotechnology but needs to focus more tightly on areas of strategic importance, says finance and operations general manager
Mike Sang.
Last week Wrightson, which is merging with Williams & Kettle, sold its 15 per cent stake in Genesis.
It followed up with news that it would begin another research project to develop new grass varieties - in collaboration with an Australian partner.
Wrightson bought its stake in Genesis in 2003 for $5.1 million. It sold it last week for about $1.8 million. That loss had been booked in a series of write-downs over the past two years.
During that time, Genesis suffered a series of setbacks as potential drugs failed and its plant science division was unable to attract funding.
Despite its poor results, Sang said the decision to pull out "was not a judgment on Genesis going forward".
"We do see a lot opportunity on the biotechnology. It's just a case of finding the appropriate model for participating. Genesis wasn't it for us."
Wrightson has a seed business which is where the latest collaboration is focused.
Genesis also has patents and intellectual property relating to development of new pastures but large-scale restructuring in the past year forced it to cut back its work.
Wrightson's new ryegrass project is a collaboration with the Molecular Plant Breeding Research Centre, based in Melbourne.
It will be backed by the New Zealand and Australian Governments.
The project aims to develop and commercialise grass varieties that can improve nutrition for grazing animals.
The key is to make them more easily digestible so more nutrients can be extracted.
Wrightson chief executive Barry Brook said the project could significantly improve feed quality and reap large economic benefits for all pastoral farmers.
The New Zealand Government is giving $3 million over three years, provided through the Australia-New Zealand Biotechnology Partnership Fund, established last year to encourage more transtasman science collaborations.
Sang said Wrightson believed that New Zealand needed to combine its research efforts in many areas to avoid spreading itself too thinly.
On that basis, it is likely Wrightson will unveil more research collaborations over the coming months.
