DuPont streamlining targets high value growth
crop protection businesses, involves closing or streamlining 10
plants and slashing 1,500 jobs globally.
DuPont Agriculture & Nutrition on Monday said the moves are part of a plan to increase investment in plant genetics, biotechnology and other "high-value growth opportunities".
The changes, which are expected to be completed in 2007, include consolidating manufacturing assets, leveraging technology centers and refocusing product marketing strategies in the firm's nutrition and crop protection businesses.
Operating costs in these businesses are expected to be reduced by $100m a year, with these savings due to be reinvested into the company's seed business.
DuPont said these actions will help expand the company's competitive advantage in the seed market and increase the speed to market of seed products with next-generation biotech traits.
"These actions will accelerate the momentum that is building for our seed business," said J. Erik Fyrwald, group vice president at DuPont Agriculture & Nutrition.
"Our seed products are performing very well around the globe. Our competitive yield advantage improved in 2006 and that is going to mean significantly improved financial performance for the business in 2007."
The firm said it expects to record a charge of about $200 million in the fourth quarter of 2006 for restructuring and asset impairments.
Other growth opportunity areas in DuPont's Agriculture & Nutrition plan include increased sales and marketing resources for its seed business, and growth for The Solae Company's SoleCina, which enables food processors to convert a proprietary blend of vegetable and meat protein into a nutritious finished product.
The company also plans to continue its investment in the markets of Brazil, Eastern Europe and Russia, India and China for all businesses.
In Latin America, the firm's total Agriculture & Nutrition sales exceeded the $1bn mark for the first time in 2006 on the strength of gains in corn, soybean, crop protection and soy protein products in Brazil and elsewhere.
According to DuPont, good seed product performance and new crop protection product launches are driving growth in Brazil despite a difficult agricultural economy. The firm expects higher sales there to contribute to improved 2006 fourth quarter results compared to 2005.
In addition, seed sales outside North America also passed the $1bn mark for the first time in 2006.
DuPont also raised its outlook for 2006 earnings per share to $3.25, compared to previous expectations of $2.86.
The firm said it recognizes the reorganization will be a "difficult time" for employees and pledged to assist those affected as they try to find new jobs.
