DuPont Agriculture & Nutrition Increases Investment in Plant Biotechnology; Streamlines Nutrition and Crop Protection Businesses
Cost Savings to be Reinvested Primarily In R&D for Seed Products
WILMINGTON, Del., Dec. 11, 2006 -- DuPont Agriculture & Nutrition today launched a plan to increase investment in plant genetics, biotechnology and other high-value growth opportunities, while further improving competitiveness in low-growth areas of its nutrition and crop protection businesses by reducing operating costs about $100 million a year.
Under the plan, DuPont will reinvest all of the $100 million savings into its seed business. These actions will help expand the company’s competitive advantage in the seed market and increase the speed to market of seed products with next-generation biotech traits.
“We are aggressively adjusting our capital and resource allocation to the highest value growth opportunities for our customers and shareholders,” said J. Erik Fyrwald, group vice president - DuPont Agriculture & Nutrition.
DuPont will consolidate manufacturing assets, leverage technology centers and refocus product marketing strategies in its nutrition and crop protection businesses.
These changes include the closing or streamlining of manufacturing units at about 10 sites and the reduction of approximately 1,500 positions globally, with most of the changes expected to be completed in 2007. Based on current estimates, DuPont expects to record a charge of about $200 million in the fourth quarter of 2006 for restructuring and asset impairments.
“These actions will accelerate the momentum that is building for our seed business,” Fyrwald said. “Our seed products are performing very well around the globe. Our competitive yield advantage improved in 2006 and that is going to mean significantly improved financial performance for the business in 2007.”
Along with strong 2006 product performance for customers, independent research done this year found Herculex® XTRA insect control, which DuPont co-developed, to be superior to other insect control options on the market today. Looking ahead, North America seed orders for 2007 planting are very strong. The company expects sales of corn hybrids with “triple stacks” to be 10 times higher than 2006, significantly increasing revenue per acre captured by the business.
In Latin America, total Agriculture & Nutrition sales exceeded the $1 billion mark for the first time in 2006 on the strength of gains in corn, soybean, crop protection and soy protein products in Brazil and elsewhere. Excellent seed product performance and new crop protection product launches like picoxystrobin are driving growth in Brazil despite a difficult agricultural economy. Higher sales there will contribute to improved 2006 fourth quarter results compared to 2005. In addition, seed sales outside North America also passed the $1 billion milestone for the first time in 2006.
DuPont also is on track to deliver Optimum™ GAT™ herbicide resistant trait, which will give growers a new choice in glyphosate-tolerance soybean seed that maximizes yield potential, improves crop safety and expands weed control options, including for broader use of DuPont’s sulfonylurea herbicides.
Other growth opportunity areas in the Agriculture & Nutrition plan include:
* Increased sales and marketing resources for the seed business.
* Investments in safer crop protection products by delivering our research pipeline products, including the planned 2008 introduction of Rynaxypyr™, a next generation ultra-low toxicity insecticide.
* Growth for The Solae Company’s SoleCina™ which enables food processors to convert a proprietary blend of vegetable and meat protein into a nutritious finished product.
* Launch of Crystalon™ vertical form fill and seal liquid packaging technology.
* Continued investment in the markets of Brazil, Eastern Europe/Russia, India and China for all businesses.
* Driving growth in its portfolio of leading biofuel technologies.
“While we are excited about the opportunities that lie ahead, we recognize that this will be a difficult time for employees,” Fyrwald said. “We are committed to assisting those affected by these changes in their transition to other opportunities within or outside of DuPont.”
In cases where redeployment is not possible, employees will receive assistance in accordance with local country and legal entity practices. More details of the plan will be available at a later date.
The actions announced today are part of the resource and capital deployment initiatives targeted to increase the company’s return on invested capital.
DuPont is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to better, safer, healthier lives for people everywhere. Operating in more than 70 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
Forward-Looking Statements: This news release contains forward-looking statements based on management’s current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company’s strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like “expects,” “anticipates,” “plans,” “intends,” “projects,” “indicates,” and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; seasonality of sales of agricultural products; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations.
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- DuPont Agriculture & Nutrition
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