INSIGHT: DuPont looking for more biotech collaboration in China

23 March 2011 17:35  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS)--DuPont’s commitment to biotechnology is clear and has been highlighted this year by the $6bn-plus offer for Danisco, a long-time partner in developing bioplastics.

CEO Ellen Kullman was in China at the weekend addressing nearly 700 delegates, including Chinese government leaders, executives from multinational corporations and academics, talking about hitherto unimagined possibilities.

“China could play a constructive role in developing and applying biotechnology,” she said.

“Looking out toward a 20-year horizon, DuPont expects biotechnology to drive innovation ranging from engineering plastics, advanced fibres and composites to biofuels, agriculture and nutrition - all the while creating a more sustainable basis for the manufacture and use of these products.”

Clearly no one company or organisation will make progress alone, so DuPont is keen to be able to establish the sort of collaborative partnerships that will help it do more biotech-based business in the world’s second-largest and fastest-growing economy.

China’s greater demand for agricultural commodities and growing concerns about the environmental impact of its rapid economic growth will be key driving forces for the development of biotech solutions.

DuPont’s sales in China, excluding those for the Pioneer seeds business, climbed by 51% last year to $2.8bn – the corporate sales total for the year was $31.5bn, up 21%. Sales for its Pioneer joint venture businesses in China soared by 73%.

China’s is the second largest seed corn market in the world and is seen by DuPont as a long-term growth opportunity. China is faced with the challenge of feeding 20% of the world’s population with 9% of the arable land, the company noted last year.

DuPont has one joint venture and one wholly-owned Pioneer Hi Bred research centre in China and is extending research investment as well as market coverage.

For DuPont, however, the biotech opportunity extends beyond crops and into biomass conversion for fuels and materials. The company can play the sustainability card strongly here as its research effort is stepped up into second generation biofuels and for the use of bioconversion to make plastics.

Danisco has been a partner for DuPont in bioplastics production and has done its own work on potentially important bio-based rubber through the Genencor joint venture.

For DuPont, Danisco brings market access and technology. The industrial enzyme business will enhance DuPont's bioscience businesses and could provide alternative production pathways to products such as fuel ethanol, bioplastics and bio-based elastomers.

Genencor has worked on the development of a bio-based route to isoprene with Goodyear. At the technical level, Danisco's enzyme and fermentation know-how fits with DuPont’s strengths in biomass processing and microbe engineering, and is complemented by its global reach, DuPont says.

The Danisco bid pushes DuPont more towards food and nutrition as does its Solae soya ingredients joint venture with Bunge, which earlier this year opened a new Asia food application centre in Shanghai.

Located within DuPont’s R&D centre in the city, the food application wing will focus on food, beverage, bakery, confectionery and meat products. It is Solae’s fourth such R&D facility and will be used to address the use of soya protein in Asian foods.

Solae works with manufacturers of food, beverage and meat and fish products. Three of its 11 manufacturing plants are in China.

Given the size of the opportunity, it comes as no surprise that DuPont is pushing its agriculture and nutrition and its materials businesses hard in China. But the focus on biotechnology and the potential to meet some of the country’s most pressing needs shows how the company is thinking well ahead.

China will need all the means at its disposal to manage the move of many tens of millions of people from the countryside to the cities, and to manage more sustainable economic growth and the aspirations of its people.

Biotechnological developments are likely to be vitally important in enabling the transition in a more environmentally friendly and efficient way.

For more on DuPont visit ICIS company intelligence
Read Paul Hodges’ Chemicals and the Economy blog
Bookmark John Richardson and Malini Hariharan's Asian Chemical Connections blog

By: Nigel Davis
+44 20 8652 3214

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