Thursday, September 6, 2007

The Dow Chemical Expantion Continues

Dow Chemical (DOW) is going hard core at the corn seed market currently dominated by Monsanto (MON) and DuPont (DD)

Dow AgroSciences, a wholly owned subsidiary of The Dow Chemical Company, announced last week that it has further strengthened its global corn seeds platform with the acquisition of Netherlands-based Duo Maize. The deal follows two other recent acquisitions in the corn seeds arena, involving Brazil's Agromen Tecnologia, and Austrian company Maize Technologies International (MTI).

"The expanding seed platform that we are building will enable us to leverage superior Dow AgroSciences input and output traits in key crops around the world," said Jerome Peribere, Dow AgroSciences president and chief executive officer.

Duo Maize is a corn germplasm company focused primarily on early maturing germplasm silage applications for northern climates. The technology shall enhance and expand the strong silage market presence Dow AgroSciences has established in the U.S. with a silage-specific product line. At the same time, it shall also position Dow AgroSciences as a key player in European silage applications, complementing the breeding program and germplasm recently acquired from MTI.

I love this, big time. CEO Andrew Liveris has said over and over that he was determined to diversify Dow from its cyclical chemical businesses to more stable ones. This fits that bill perfectly. Currently the worldwide biofuel boom has made seed production an extremely profitable business and the industry is in it's infancy. There is no end in site for demand for ethanol and other than in Brazil, it is made by corn. Dow's expansion here is exploding the segment for them and stabilizing earnings for shareholders.


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