Almost two years since its historic merger, DowDupont will spin off its entire agricultural business as part of its plan to split into three sectors: agriculture, material science and specialty products.
The agriculture company, Corteva, will officially spin off June 1, and it has expected 2019 Pro Forma net sales of $14.3 billion. The company will be 56% seeds and 44% crop protection products, according to the company.
Since its September 2017 close the agriculture division has undergone a number of changes:
Headcount dropped from 25,000 to about 21,000 in 2018
Seed production sites dropped from 90 to 68
Commercial offices were cut by more than half from 287 to 129 in 2019
Research and development sites decreased from 233 to 163
In a recent report, Corteva officials pointed to digital transformation’s impact on cost savings and bringing new products to market. According to the company, going digital will reduce costs, increase accuracy and increase the speed of new product innovation.
The seeds market, specifically seed traits, is an area Corteva expects to see growth over the next few years. Qrome corn, launched in 2019, is expected to bring around $50 million. PowerCore, launched in 2017 and PowerCore Ultra, launched in 2019, are collectively expected to bring in about $300 million. Enlist traits, launched in 2017 (cotton), 2018 (corn) and 2019 (soybeans), are expected to generate $100 million, to name a few trait platforms.
In terms of crop protection, Corteva announced recent product launches are performing above-market growth. “2019 estimated new product sales forecasted to exceed plan by $100 million,” according to a recent shareholder presentation by the company.
Altogether, the merger was estimated at a value of $131 billion in 2017. Saturday marks another step in a long process to divide the mega-company in to three focused businesses.