DuPont commits $15-20m to expand Lamphun seed plant

DuPont plans to invest $15-20 million over the next two years to expand its corn seed plant in northern Thailand as part of its goal to increase revenue in Asean by 15% annually from next year onward.

The US company will invest up to $30 million for seed capacity expansion in Thailand and the Philippines next year after spending $11 million recently to enlarge a similar facility in Malang, Indonesia, said Arun Baral, director of the seed business for Asia-Pacific.

"In Thailand, our investment will be a multiple-year expansion to lift corn seed capacity [in Lamphun province], aiming to be completed in 2011, he said.

In the Philippines, DuPont has a manufacturing plant for corn and soybean grain while the Thai operation focuses on corn only, with some of the output exported, he added.

The Malang plant, where the expansion was completed in October, now has the capacity to produce 20,000 tonnes of corn seed a year together with 5,000 tonnes of hybrid rice.

DuPonts five strategic corps are corn, soybeans, canola, sunflower and hybrid rice. Its seed business, under the Pioneer brand that DuPont acquired in 1999, employs 9,000 people worldwide with 76 production sites and 100 research centres including the one in Lamphun.

Agriculture is among DuPonts key areas of focus in Asean where the population is expected to reach 680 million in 2025, from 580 million now.

According to the United Nations, agricultural output will need to double and food production will need to increase by 70% by 2050 to adequately feed the expected global population of 9 billion, up from roughly 6.5 billion today.

Carl Lukach, president of DuPont East Asia, said the company expected its Asean revenue to fall by about 15% this year because of the global economic recession, from $800 million the region generated in 2008. Sales for the whole Asia-Pacific region amounted to $5.5 billion generated from its wholly owned companies with another $2 billion from joint ventures.

"Going forward, we are expecting to see Asean sales growing 15% every year, he said.

Globally, DuPont projects sales to drop to $26 billion this year from $31 billion last year, but for 10% annual growth over the next three years, added Mr Lu kach, who is based in Tokyo.

In addition to Asean, other emerging markets on which DuPont has focused include China, India, Latin America, Eastern Europe, and the Middle East and Africa.

DuPonts sales in emerging markets alone grew by 80% in the past five years and accounted for nearly one-third of its 2008 sales. While 2009 emerging market sales are expected to decline by about 10% from $9 billion in 2008, DuPont projects the business opportunity for emerging markets to be approximately $13 billion by 2012.

To lift its income, DuPont has focused on three potential business trends: expanding food production, the growing need to protect people and the environment, and reducing dependence on fossil fuels.

Biofuel and other alternative energies offer good business potential for DuPont. Photovoltaic solar energy is expected to grow from $30 billion today to $55 billion by 2012. DuPont expects its global sales from this sector to exceed $1 billion in the next three years with two biofuel projects under way.