DuPont expects its Industrial Biosciences unit to be one of its fastest-growing businesses, with the highest margins:
Bioisoprene has been resurrected! Actually I didn’t know it had been suspended. But I’m happy it’s back. Apparently Danisco stopped fermentation work on the $50-million Goodyear collaboration in early 2011 because it had safety concerns about handling the flammable gas at its Palo Alto facility. DuPont, however, has the relevant experience to work safely with such materials; the fermenters have restarted and construction of a pilot plant could begin in 2012. DuPont says bioisoprene could be a platform to access the multi-billion dollar C5 chemicals market.
Unfortunately no new biofuels projects were revealed. The company will break ground on its previously announced 25 million gal/year cellulosic ethanol facility at Nevada, IA sometime in mid-2012. The status of the ethanol-to-biobutanol retrofit project I reported on last week [Butamax (Sort of) Announces Commercial Project…] was not clarified by Industrial Biosciences president Jim Collins, who said the ethanol producer in question (Highwater Ethanol) has “signed up to kind of be our first conversion.” I’m hopefully getting an interview with Butamax (DuPont's biobutanol jv with BP) in January, so maybe I can report on a definitive agreement after the holidays.
DuPont believes that combining its engineering and advanced materials capabilities, Pioneer’s ag expertise, and Genencor’s bioprocessing and protein engineering know-how “under one roof” gives it an edge over all others in the space. This may be true, but I'd argue DSM has some compelling synergies of its own.
The $130 million in synergies expected to result from the Danisco deal will likely be achieved in 2012—a year ahead of schedule.
The Industrial Bioscience unit is expected to post 2011 pro-forma sales of $1.1 billion, mostly from sales of bioactives like detergent enzymes.
The segment’s addressable market is big ($50 billion) and diversified:
Chemical companies are more concerned about my personal safety than my own grandmother. DuPont chair and CEO Ellen Kullman opened Day 2 presentations by asking attendees to hold on to the handrails while walking using the venue’s marble staircases. Shell Chemicals likes to make sure everyone knows where the exits at their events, in case of a fire. I'm a fan of this trend, and hope more chemical companies take an active interest. Why hasn't Dow Chemical reminded me to check my tire pressure? Or BASF told me I need to wear a heavier coat? Where's the love?