Dupont Presents Views To Wall Street On Its Ag And Biofuels Markets
DuPont (NYSE: DD) Chairman and CEO Charles O. Holliday, Jr., Executive Vice President & Chief Innovation Officer Thomas M. Connelly, and Group Vice President -- DuPont Agriculture & Nutrition J. Erik Fyrwald today updated investors on DuPont businesses serving the agriculture and biofuels markets.
"Global population growth, rising income and demand for biofuels is driving increased demand for agricultural outputs," Holliday said at the DuPont Global Agriculture Investors' Day. "DuPont is uniquely positioned to meet that challenge due to our multi-discipline science, ability to leverage that science across different industries, and our broad market access and global reach."
Connelly added, "The synergies among agricultural biotechnology, biofuels and biomaterials are creating potential game-changing solutions to the global challenges we face today and significant growth opportunities for DuPont."
The company's core competencies to drive innovation across a number of biotechnology markets include cell biology/physiology, molecular biology (gene discovery, expression and optimization), genomics, proteomics, biochemistry and metabolic engineering.
Noting that DuPont is using biotechnology to deliver advanced plant genetics along with chemistry to improve productivity, quality and yield, Fyrwald reviewed the platform's top pipeline candidates.
"We are advancing a rich pipeline of new products to enhance yield and nutrition," he said, referencing top-performing insect resistant corn, Rynaxypyr(TM) low-dosage insecticide, fungal resistant corn, Optimum(TM) GAT(TM) dual herbicide tolerance and healthier soybean oil.
To more strongly position itself for attractive agricultural markets, DuPont announced last year that it was investing $100 million in savings from a restructuring into its crop genetics research and seed sales and marketing.
"The growth fundamentals in seed markets around the world are outstanding," said Fyrwald. "As a result, we are accelerating our growth investments at a faster rate than the savings from our previously announced restructuring plan."
Approximately $100 million in growth investments will be made in 2007. The investments are targeted at accelerating new product launches, increasing the rate of genetic gain, expanding capacity for plant biotechnology discovery and development, increased sales coverage, and more aggressive promotions. With regard to savings from the restructure program, Fyrwald said DuPont Agriculture & Nutrition will generate savings of approximately $20 million of the $100 million target late in 2007, another $40 million in savings in 2008, and the remaining $40 million in savings in 2009.
Fyrwald noted that for the year 2007, he expects the DuPont Agriculture & Nutrition platform to deliver about 10 percent revenue growth and 20 percent pretax operating income (PTOI) growth before accounting for the accelerated growth investments. Including the investments, PTOI growth would be about 10 percent, compared to a compound annual average growth rate of 14 percent since 2001.
DuPont reaffirmed its outlook for 2007 full-year earnings per share of about $3.15, excluding a $0.06 per share charge for significant items in the first quarter 2007