DuPont CEO says agriculture a "tremendous" opportunity

Thu Oct 13, 2011 9:34pm EDT

* Food value chain, population growth boost outlook

* Majority of R&D spending now tied to agriculture

By Christine Stebbins

DES MOINES, Iowa, Oct 13 (Reuters) - U.S. chemicals giant DuPont (DD.N) sees big growth opportunities ahead in its agricultural sector as the world's population expands 30 percent and food needs double by 2050.

"As we take a look at the value chains and what is going on around the world with population growth, we see agriculture as being a tremendous opportunity," DuPont Chief Executive Officer Ellen Kullman told reporters here on Thursday during the World Food Prize meetings.

"I'm a big believer in the sector -- it's an important sector for us," she said.

DuPont subsidiary Pioneer Hi-Bred, acquired in 1999 and headquartered in Des Moines, is the world's largest producer of seed for corn and many other crops. It sells seeds in 90 countries.

Revenues from DuPont's agricultural businesses, which include seeds, crop chemicals, food packaging, protection and specialty food ingredients, accounted for 29 percent of its second quarter sales of $10.3 billion.

But agricultural sales accounted for 43 percent of the company's pre-tax earnings of $1.9 billion in the quarter.

Ag-related sales in the quarter, which ended June 30, rose 4 percent by volume with prices up by 6 percent, according to company documents.

Earnings from its agriculture-related products could grow to half of DuPont's revenues with its takeover of Danish food ingredients and biofuels maker Danisco.

That is a big change for the company that invented nylon and supplied gunpowder during World War I.

"We are really having a lot of fun as we integrate Danisco and seeing the power that having everything from seed all the way through specialty food ingredients can bring to that marketplace," Kullman said.

Kullman said DuPont now invests $1.7 billion annually on research and development, with more than 60 percent of that tied to crop and food production.

Of that, the single biggest portion goes to seed and biotech followed by crop protection chemicals, the company said.

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