DuPont (NYSE:DD) and Dow Chemical (NYSE:DOW) are market leaders in developing agricultural products and technologies used by farmers to maximize yield and adopt sustainable practices. Both have taken a conscious decision to strengthen their agriculture business. While Dow has taken steps to improve the weed control system, DuPont has decided to establish a molecular breeding technology hub in China. Agriculture and nutrition based products contribute about 30% of Dupont’s value and are responsible for the company’s stellar earnings last year, which were boosted by an earlier than expected breeding season in Latin America. For Dow though, Health and Agricultural products contribute only about 6% of the stock’s value.
Dow Investing Heavily in Innovative Weed Control System
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Dow Chemical has made a multi-year investments related to its Enlist Weed Control System. The investment will enable the company to produce its propriety chemical (2,4-D chlorine) which is used in a technology (Colex D Technology) and offers significant benefits to customers like ultra-low volatility, minimized potential for drift, decreased odor and improved handling characteristics. This investment also enables Dow AgroSciences’ global phenoxy herbicide business which supplies the chemical (2.4-D chlorine) to customers in more than 60 countries. The company recently announced that it has been able to produce the chemical in a commercial setting. This investment by Dow Chemical is expected to span multiple locations with Midland, Michigan being the first one.
This Enlist system is still awaiting certain regulatory approvals. However, once they are thorough, this product will be a combination of herbicides and seeds with herbicide-tolerant traits to tackle the emerging weed control challenges faced by farmers.
DuPont Picks China as the New Breeding Technology Hub
DuPont is developing a new facility in China for its Pioneer seed business. It has signed a multi-year lease agreement with Beijing International Flower Port to build a state of art hub staled to open later this year. This technology hub will leverage Pioneer’s proprietary matrix of molecular breeding technologies called Accelerated Yield Technology (AYT) system to identify gene combinations superior to the traditional ones. Initially, the focus of the research will be on maize crops. The hub will try to manufacture better maize hybrids which will improve the sustainability of farming in China while enhancing food security.
This development is also expected to help China which is trying to construct a high-end agricultural brand and seed industry in the Shunyi district. It is expected to give a boost to the construction of Beijing National Modern Agricultural Science and Technology City.