DuPont Food Innovations to Drive 2012 Sales Growth
Innovation, Product Performance, Collaboration Prove Successful Recipe for Food Businesses
DuPont's innovation and the ongoing, strong global food demand will deliver growth across its food and agriculture businesses, DuPont Executive Vice President James C. Borel told attendees at the Bank of America Merrill Lynch 2012 Global Agriculture Conference today.
"With a growing population, expanding middle class and rapid urbanization in developing economies, DuPont's Agriculture and Nutrition & Health businesses are equipped to deliver innovative, market-based solutions to address one of the world's most critical challenges," said Borel.
"The DuPont Nutrition & Health segment, strengthened by the integration of Danisco, is expected to deliver 7 to 9 percent compounded annual sales growth over the planning horizon and pre-tax margins of 12 to 14 percent," Borel said. "The DuPont Agriculture segment, including the Pioneer Hi-Bred seed and Crop Protection businesses, plans to continue to bring some of the highest sales and margin returns in DuPont with 8 to 10 percent compounded annual sales growth over the planning horizon and margins expanding to 20 to 22 percent.
"As we look ahead in 2012 and beyond, we are confident in our ability to meet our targets with our connections to customers never stronger and the opportunities never greater," said Borel. "Our momentum is driven by our dedication to ensuring the right local solution for our customers, thereby ensuring safe, nutritious food is available to every person."
Advancing R&D Pipelines
"Constant innovation that meets our customers' requirements is at the heart of what we do," said Borel. "In fact, R&D efforts last year resulted in 11 program advancements and 4 new program additions across the seed and crop protection pipelines."
The seed pipeline delivered many new technologies including the next wave of the Optimum® AcreMax® family of insect protection products for North America, and the limited launch of Plenish high oleic soybeans, the first soybean offering in the industry with higher oleic oil content, to multiple processors this year. The Optimum® Intrasect above ground, dual mode insect protection with the Herculex® I trait also will be introduced in Brazil in 2012.
In addition to clear successes in biotechnology product offering, the seed business continued innovating with native trait technologies to deliver new hybrids honing in on drought and disease solutions for local use. In North America alone, the business will introduce 154 new corn products in 2012 up from 108 the previous year. And Pioneer® brand Y Series soybeans continue to demonstrate strong performance with 33 new varieties added for the 2012 product line-up. Additionally, the seed business will roll out its Seed Production Technology to improve cost efficiency and increase yields in the production process across North America in 2012.
Borel said the crop protection pipeline is among the most productive in the industry with few replacement programs in the pipeline. Instead, it is oriented toward novel, new chemistries and products aimed at new market spaces. Programs launching include the DuPont Dermacor® seed treatment in corn and the DuPont Fontelis® fungicide in North America, adding to its strong plant health line up.
Innovation in Products and Service Underpins Growth
DuPont's food-related businesses are uniquely positioned to compete because of advantages including sound science, relevant product portfolio, diverse route-to-market and manufacturing process capabilities.
DuPont's seed business delivered 17 percent sales growth and margin expansion in 2011 through increased market presence around the world with its Right Product Right Acre strategy of new products and services tailored for local customer benefit. Borel said the business has never been in a stronger position setting the stage for continued growth in 2012.
DuPont projects 5 to 10 percent net price gains in the seed business reflecting new product introductions around the world. This includes the expansion of the Optimum® AcreMax® family of insect protection products integrated and reduced corn rootworm and corn borer refuge solutions in North America leading the way. Optimum® AQUAmax hybrids, providing improved yield stability in water limited environments, will expand their reach across the U.S. Corn Belt and into Europe this year.
"Looking back over a very dynamic 2007 to 2011 time frame, just over 50 percent of our seed business growth in North America was price or mix gains," Borel said. "So not only were we winning more customers and acres, but our customers validated our locally oriented technology value proposition."
Latin America continues to be a growth region for DuPont's seed business as it springboards off the 45 percent sales growth delivered in 2011. In Brazil, Pioneer seed leads in technology penetration in corn. In 2012 and beyond, Pioneer has plans for continued new product ramp ups with multiple modes of action for above ground insect protection products such as Optimum® Intrasect containing the Herculex® I trait which has tremendous insect control.
Borel said the crop protection business will outpace industry growth in 2012 with its innovation across all three portfolios of insect control, weed control and fungicide.
"DuPont Cyazypyr and DuPont Dermacor® are important expansions into the insect control market space. DuPontCyazypyr is anticipated to be approved for use in Asia in the first half of 2012 with first sales in second half of 2012," said Borel. "We will launch Dermacor® in Mexican corn this year, and are on track to launch in the Brazil soybean market in 2014. All together this family of chemistry alone DuPont Rynaxypyr®, Dermacor® , and Cyazypyr® is expected to reach about $1 billion in sales over the next three to four years."
Borel said DuPont's Nutrition & Health provides a breadth of new, improved, and sustainable solutions that enhance food quality and safety, in addition to reducing food waste and carbon emissions. These ingredients can be used to reduce sugar, fat and salt in packaged food and beverages, or to promote the health of, for example, the digestive tract or immune system.Following last year's acquisition of Danisco, DuPont is poised to take full advantage of its direct route-to-market structures into many end markets to work both with multinationals as they expand and local food companies at they emerge. Today, DuPont's newly formed specialty food ingredient business is a world-class supplier to the packaged food and beverage industry.
To view a full copy of today's presentation, visit the DuPont Investor Center.
DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802. The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment. For additional information about DuPont and its commitment to inclusive innovation, please visit www.dupont.com.
Forward-Looking Statements: This news release contains forward-looking statements based on management's current expectations, estimates and projections. The company does not undertake to update any forward-looking statements as a result of future developments or new information. 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 DuPont's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K, 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 of countries in which the company does business; competitive pressures; successful integration of structural changes, including acquisitions, divestitures and alliances; research and development of new products, including regulatory approval and market acceptance, and seasonality of sales of agricultural products.