INDIANAPOLIS, Ind. – Dow Agro-Sciences was one of the last agriculture chemical companies to invest in the seed trait business but it is playing catch-up in a big way.
Sales of farm chemicals once accounted for 90 to 95 percent of the company’s revenues.
Today, 20 percent of its business is seeds, traits and specialty oils and the plan is to grow that side of the company until it accounts for about 50 percent of the revenue stream.
“We’re trying to move our business to a balanced sales approach and we’re making tremendous progress,” said Tim Hassinger, vice-president of crops for Dow’s global business unit, during a tour of the company’s headquarters in Indianapolis.
“We see a tremendous opportunity for biotech but at the same time believe agriculture chemicals will still remain a viable and large part of agriculture.”
The shift in business philosophy means growers will see more beneficial traits for corn, soybean, cotton and canola crops coming out of Dow’s rapidly expanding research and development program.
The company opened a new 7,432 sq. metre biotech research facility last month and acquired 1,394 sq. metres of office and research space and 557 sq. metres of greenhouses at Purdue University in Lafayette, Indiana, Sept. 22.
But the big announcement happened on March 4 when Dow said it would be investing $340 million in the construction of a 16,258 sq. metre research and development building and 1,300 square metres of greenhouses at the company’s corporate campus in Indianapolis.
Dow has added 500 research and development employees over the past few years.
The latest expansion will tack on another 550 scientific and commercial jobs over the next five years.
Research and development investment in both agriculture chemicals and the seed business is expected to more than double between 2006 and 2012.
Farmers are already seeing the results of that investment. SmartStax corn, a joint project with Monsanto, was launched in 2010.
Dow’s phenoxy tolerant corn is scheduled for release between 2012 and 2013, followed by herbicide tolerant soybeans a year later and cotton in 2015. Canola might be the next crop on the list.
“It’s on our radar screen,” said Hassinger.
The company has “every intention” of developing stress tolerance traits and will continue its focus on producing healthier canola oils.
The pipeline for new chemistries and seeds is more robust than it has ever been in the company’s history.
“It’s humming right now. While we’re all very happy, we’re all very stressed,” said Scott Hutchins, Dow’s director of global crop protection research and development.
Dow products account for about $5 billion of the $70 billion US global market for agricultural seeds and chemicals, ranking the company in fourth or fifth spot among its competitors.
“We think we can get to the top three position,” said Hassinger.