Jerome Peribere has a 10-year plan to diversify Dow AgroSciences LLC, Indiana’s largest agricultural chemical company. Biotechnology is the blueprint.
And through a series of aggressive international deals, Dow AgroSciences is building the framework for its future. By 2015, Peribere hopes to oversee a balanced portfolio of agricultural chemical and biotech products.
“We’re in the stone age of biotechnology,” he said. “Tomorrow, it’s going to be used to create products we have no clue about.”
Formed in 1989 as a joint venture between Dow Chemical Co.’s agricultural products division and Eli Lilly and Co.’s Elanco Plant Sciences business, the company became Dow AgroSciences in 1997, when Dow Chemical bought out its partner.
Peribere became Dow AgroSciences’ CEO in 2004. It was the capstone of a 30-year Dow career. French by birth, he grew up in Buenos Aires, Argentina. His climb up the Dow corporate ladder began as a chemical salesman, with stops in Eastern European marketing and managing the firm’s African and Middle Eastern regions before joining Dow’s ag side in 1988.
Today, Dow AgroSciences is the world’s sixth-largest agricultural chemical-maker, with a large line of insecticides, herbicides and fungicides. Dow AgroSciences makes chemicals to protect crops from weeds, manage pests and increase grain yields. With 5,000 employees, its annual sales top $3.7 billion. About 1,000 of those employees work in Indianapolis at the company’s headquarters at 9330 Zionsville Road. Agricultural chemicals are still Dow AgroSciences’ bread-and-butter. And the company continues to plow some of its research and development into the area.
But it’s not the field of the future.
“The agricultural chemical business is a good business,” Peribere said. “But it is a very slow-growth business, impacted by generics and a globalizing world.”
In the days to come, Peribere will seek to grow Dow AgroSciences through a combination of internal innovation and external partnership or acquisition. His strategy is moving the company into production of genetically modified seeds and healthy oils. Eventually, it should lead to new animal health products.
And after that, the sky’s the limit.
“Plant biotechnology is an incredible toolkit for the farmer. But it’s still a science in its infancy,” Peribere said. “Plant biotechnology is [today] where the PC industry was in the 1980s.”
Peribere is attempting to position his company to be ready for explosive growth. In 2007, he’s cut a series of deals based on that strategy. Terms of the deals haven’t been disclosed.
For example, in May, Dow Agro-Sciences acquired breeding programs, germplasm and related technology from Austrian corn seed company Maize Technologies International.
Then in August, it struck a similar deal when it acquired Brazil’s Agromen Tecnologia Ltda., a company with 30 years’ experience in corn hybrids. Later that month, Dow AgroSciences announced another acquisition, this time buying Netherlands-based corn breeding company Duo Maize.
Meanwhile, Dow AgroSciences has also been striking a series of research agreements to augment its innovation opportunity. In June, the company revealed maize and canola results from a collaboration with Richmond, Calif.-based Sangamo Bioscience Inc.
August saw a similar agreement to have Australia’s Hexima Ltd. test Dow Agro-Sciences’ genetically proprietary cotton. Dow AgroSciences followed that up in September with a gene discovery research and validation agreement with San Francisco-based Exelixis Plant Sciences.
But perhaps the biggest deal of all came Sept. 14, when Dow AgroSciences announced it had cut a cross-licensing agreement with St. Louis-based ag giant Monsanto to create a new industry competitive standard for gene-stacked corn.
Agricultural industry analysts were bullish.
“While definitely a positive for Monsanto, this agreement shows Dow’s commitment to put its Ag business back on the map, with a far broader range of product offerings than it has had thus far,” wrote Credit Suisse research analyst Mark Connelly in a Sept. 14 report.
JP Morgan expects the deal won’t be Dow AgroSciences’ last.
“Dow aspires to be the third-largest corn seed company in the United States after Monsanto and Dupont,” wrote JP Morgan analyst Jeffrey Zekauskas in a Sept. 17 report. “Syngenta is in third place with about a 6-percent [market] share and Dow is fourth at 3 percent. It would seem that Dow would have an interest in purchasing seed companies in the United States or offshore, or joint venturing with seed companies to leverage its technology.”
“Dow’s management described their new technology as a ‘Rolls Royce,'” the report continued. “Dow probably now wants to build a road for its new vehicle.”
For Peribere, the rationale behind all the deals is consistent. Although the company regularly plows millions of dollars into its own R&D, Peribere said, innovation must be a collaborative process.
“We figured out long ago that we can’t be smarter than the rest of the world,” he joked.
BioCrossroads CEO David Johnson sees a huge upside for Hoosiers, if Peribere is successful in his biotech diversification strategy. A growing Dow AgroSciences will create new high-paying jobs. It also could lead, one day, to the creation of startups that will either support Dow Agro-Science’s research or attempt to commercialize it.
“There will be all kinds of developments. We don’t know where this all ends up. But very few communities have a company like this on the scene,” Johnson said. “Their presence here is one of the main reasons agricultural biotech is such a huge opportunity for Indiana.”