DuPont Highlights Growth Drivers for Seed Biz - Analyst Blog
March 13 2014 - 3:00PM
Zacks
Chemical giant
DuPont (DD) has divulged its growth strategies for
its seed business. At the Eighteenth Annual Goldman Sachs
Agribusiness Conference, Paul E. Schickler – president of DuPont
Pioneer – highlighted opportunities in major global agricultural
markets and the roll out of the Encirca services platform for
farmers in the U.S.
Schickler, at the meet, emphasized the need for science-based,
sustainable solutions for U.S. growers as an expected rise in
population, urbanization and a fast emerging middle-class will
require increased productivity.
Schickler added that, over the next five years, around half of the
company’s growth in the Agriculture segment is expected to come
from outside of North America, mostly in major markets such as
Latin America, Eastern Europe, India and China where DuPont has a
strong foothold and looking for continued growth.
DuPont Pioneer, the seed business of DuPont, plays a major role in
the company’s focus on expanding its leadership in the
science-driven segments of the agriculture-to-food value chains. It
has been a leader in developing innovative decision services over
the past ten years. DuPont Pioneer, over the past decade, has
mapped over 20 million grower acres and helped customers implement
variable rate seeding prescriptions on more than 1.5 million acres
during the 2013 growing season.
The recent launch of the Encirca services platform, which
represents a key part of DuPont Pioneers’ growth strategy, marks an
expansion to DuPont’s whole-farm decision services offerings geared
to help farmers boost their productivity and profitability. The
company retains a differentiated approach to its whole-farm
decision services as it offers farmers tailor-made services and
personalized advice.
Encirca services will assist farmers in making planting decisions
as well as more informed management decisions regarding
nitrogen/fertility, irrigation and grain marketing throughout the
year. These services have been developed through internal
investment, strategic acquisitions and collaborations with leading
innovators in agriculture.
Encirca services have been projected to deliver peak revenues of
more than $500 million annually for DuPont Pioneer over the next
decade. The company expects to launch additional services under the
Encirca services moniker in 2015 and beyond. DuPont sees
significant potential for these services in helping corn and
soybean farmers in North America beef up productivity and further
extend to a vast spectrum of crops and markets globally.
DuPont is witnessing strong momentum in its agriculture business,
reflected by higher corn seeds and crop protection sales. Despite
unfavorable currency impact, the Agriculture segment saw
double-digit rise in sales in the fourth quarter of 2013 boosted by
healthy insecticide sales in Latin America and earlier seed
shipments, aided by the company’s acquisition of a majority stake
in Pannar Seed (Pty) Limited.
DuPont is seeing healthy demand for its corn hybrids and expects
continued strong growth in crop protection driven by new products.
The company has numerous new products in its pipeline that are
expected to create value for its customers.
DuPont launched 1,753 new products in 2013 and its key products
including Optimum AQUAmax corn products and Optimum AcreMax insect
control products are gaining significant market traction. The
company gained more than a point in the North American corn market
share last year driven by strong performance in its Pioneer seed
business.
DuPont is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical industry with a favorable Zacks
Rank are The Dow Chemical Company (DOW),
LyondellBasell Industries NV (LYB) and PPG
Industries Inc. (PPG), all with a Zacks Rank #2 (Buy).
DU PONT (EI) DE (DD): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
LYONDELLBASEL-A (LYB): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
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