Dow AgroSciences and Health Care & Life Sciences and Health Care & Insurance and Life Science & Biotech

Dow Agro thinks it has a winner

March 16, 2011

Dow AgroSciences LLC is tooting its own horn, but its latest product really could be a great leap forward in farming productivity.

The Indianapolis-based company released more details this month about its Enlist Weed Control System, which would genetically modify corn, soybeans and cotton to be resistant to one of the most common weedkillers: 2,4-D.

That’s significant because more weeds have developed that are resistant to the leading weedkiller, Round-Up, and its generic knock-offs. According to a survey by Farm Journal, nearly half of farmers have a problem with these weeds now and nearly three-quarters believe they will within a decade.

Using 2,4-D could help, but it can’t be applied during the critical growth phase without harming young crop plants, said Dow spokeswoman Kenda Resler-Friend. But if weeds are allowed to grow too long before weedkiller is applied, they will sap crops of needed water and sunlight, reducing the yield.

Also, farmers have to spend more money or time to come back a second time to spray crops with 2,4-D after already spraying them with Round-Up.

So Dow Agro has come up with a two-pronged approach. First is the genetic trait that will be added to the seeds of corn, soybean and cotton to make them resistant to 2,4-D—even in the early growing stages.

Then Dow has created a mixable combination of generic Round-Up and 2,4-D that can be applied in one pass. Dow’s scientists also have added a chemical called choline to 2,4-D to reduce its volatility, making it less likely to blow onto other crops not protected by the resistant gene.

Dow is still awaiting regulatory approval of its new product and doesn’t expect to introduce its Enlist-brand weed control system until 2013. When it does, it will sell the product itself as well as license it to other companies. Pioneer, an Iowa-based subsidiary of DuPont, already has signed on to use the Enlist technology in its soybean products.

Dow also hopes to sell Enlist in Argentina, Brazil and Canada.

Dow expects Enlist could earn $1 billion, in today’s dollars, over its life cycle.

“Enlist represents a system approach that integrates our chemistry and biotechnology expertise. It will offer farmers unsurpassed flexibility, convenience and value,” Dow Agro CEO Antonio Galindez told a group of investors in London last week.

Dow Agro also intends to offer seeds that include the Enlist genetic trait along with its SmartStax traits, which control against insects. Dow Agro launched SmartStax last year, after buying a series of seed distribution companies to help its sales. Dow is also distributing SmartStax thorugh a partnership with St. Louis-based Monsanto Co., the seed industry giant.

The SmartStax launch helped Dow Agro boost revenue and profits last year. In the fourth-quarter of 2010, the company pulled in $1.3 billion in revenue, a 20-percent jump from the same quarter a year ago.

Earnings before interest, taxes, depreciation and amortization totaled $72 million in the quarter, up more than 4 percent from the same quarter the year before.

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