By ANN HINCH
Assistant Editor

INDIANAPOLIS, Ind. — Last week, Dow AgroSciences LLC finalized is acquisition of Dairyland Seed Co. of Wisconsin. It’s just the latest in a string of buyouts of smaller seed producers, designed to increase Dow’s research and development (R&D) efforts.

Other buyouts in the past year have included Triumph Seed Co. of Texas, Agromen Tecnologia of Brazil, MTI of Austria and Duo Maize of the Netherlands, according to Ben Kaehler, commercial leader for Dow AgroSciences’ seed affiliates.

“We’re considering others, but nothing we can discuss,” he said, explaining the buyouts will broaden Dow’s “geographic footprint” in the seed market and provide Dow with a wider biological germplasm pool for seed breeding.

“We’re not only buying the distribution and marketing (of these smaller companies), they’re also bringing technology to our market.”

For example, Dairyland has the alfalfa and soybean breeding program that Dow lacks; Triumph offers the short-stature sunflower, designed to grow to only about waist-high with high yield, to resist the wind damage done to its lankier cousin.

This is all in addition to Dow’s partnership with Monsanto Co. on SmartStax, touted as the first eight-gene trait combination for corn seed, which Tom Wiltrout said is on review with the U.S.

Environmental Protection Agency (EPA), and has also been submitted to Japanese authorities for consideration.

“Our goal is, 12 months from now we’ll be taking orders from growers” for the SmartStax seeds, said Wiltrout, global seeds leader for Dow. Kaehler said the company’s goal is to have at least one breeding trait in some seeds on two-thirds of U.S. corn acres by 2012.

Growing and spending

Right now, this subsidiary of The Dow Chemical Co. concentrates the vast majority of its R&D on agricultural chemical and urban pest solutions, said Dan Kittle, R&D global leader, who spoke with reporters in Indianapolis last month about company expansion.
But Dow is making the transition to increasing its R&D of seeds, traits and oils – not by taking away from ag chemicals and pest control, but by increasing its budget, staff and facilities for the seeds, traits and oils (otherwise known within the industry as “biological solutions”).

With worldwide annual revenue of approximately $4 billion, Dow AgroSciences is aiming for $7 billion by 2017, Kaehler explained. It is planning to also spend roughly double what it does now, between now and then, to bring new traits and products to market.

Kittle said the company wants its future income to be more evenly split between its ag chemicals and seed, traits and oil products.
Right now Dow has 30 breeding stations and is expanding or adding five this year. It will hire about 100 new people in R&D this year alone, on top of its 1,200 current employees, he added – and there are plans to more than double that next year.

“If you know anything about the seed business, it’s all about how you can improve yield,” he said.

Dow plans to more than double its corn breeding germplasms – for plant traits such as drought resistance, more desirable nutrients, food quality, bioenergy and use in manufacturing chemicals and polymers – in less than four years, and continue expanding overseas. In 2008, Kittle said it had just under 30 percent of the corn seed market share in Latin America.

Wiltrout said another reason for constant research is when a seed company does develop something that is, for example, resistant to pests, it has to keep working because those pests eventually adapt.

“The bugs will win,” he said. “Over time, Mother Nature will win … How do you sustain (resistance)?”

Kaehler said Dow acquisition of the seed companies will also, in the future, provide Dow technology for those companies’ customers – such as SmartStax and DHT (herbicide resistance for corn and soybeans).

Even if the EPA approves use of SmartStax seeds in the U.S., it remains to be seen if the agency will also OK Dow’s request for a reduced refuge area for that corn.

Wiltrout explain-ed if a grower has 100 acres on which they want to grow Bt seed, they have to leave 20 acres fallow as a “refuge” area. Dow is asking for only 5 percent refuge, maximum.
Wiltrout said Dow is doing all this to be ready to meet future trait and chemical needs for farming when pests and diseases adapt to current technology.

“To really have a breakthrough product, you have to offer the customer a product that will solve his problem, or give him better yields, or help his farming operation run better,” Kaehler explained.
And sometimes, alliance with other companies is the solution. “Despite what you may see and hear, no (one) company will invent everything,” Wiltrout noted.