E. I. du Pont de Nemours and Company - Analyst/Investor Day

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E. I. du Pont de Nemours and Company (DuPont) (DD) December 12, 2011 7:00 PM ET


James C. Collins - President of Industrial Biosciences

Craig F. Binetti - Chairman of Solae and President of Dupont Nutrition & Health

Thomas M. Connelly - Chief Innovation Officer and Executive Vice President of Electronic & Communication Technologies

Karen A. Fletcher - Vice President of Investor Relations

James C. Borel - Executive Vice President

Ellen Kullman - Chairman, Chief Executive Officer and Chairman of Strategic Direction Committee


David L. Begleiter - Deutsche Bank AG, Research Division

James Fitzpatrick - Princeton Capital Management, Inc.

Laurence Alexander - Jefferies & Company, Inc., Research Division

John E. Roberts - Buckingham Research Group, Inc.

Donald Carson - Susquehanna Financial Group, LLLP, Research Division

Mark R. Gulley - Ticonderoga Securities LLC, Research Division

Andrew W. Cash - UBS Investment Bank, Research Division

Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division

Kevin W. McCarthy - BofA Merrill Lynch, Research Division

Karen A. Fletcher

Good evening, everyone. Welcome to DuPont's 2011 Investor Event. My name is Karen Fletcher, and I'll be your host.

So based on the input that we received from you, we decided that tonight, we would offer a deep dive of a couple of our new reporting segments that were created once the Danisco acquisition was finalized. So tonight, you're going to hear from Craig Binetti, who's President of our Nutrition & Health business; and Jim Collins, President of our Industrial Biosciences business. Each of them are going to take about 20 minutes to walk through their businesses, and then we'll follow that with Q&A. Tomorrow's program is going to focus on total company.

For those of you in the room, you should have received a booklet with this evening's presentations at the registration desk. So if you don't have that book, just see somebody at the back of the room. For those of you on the webcast, please refer to 2 slide decks that are on our website at investors.DuPont.com and please note that additional materials will be posted tomorrow morning.

So before we get started, I just have a couple of administrative items to cover. First, for those of you in the room, in the unlikely event of an emergency, there are 2 exit doors behind me on the stage, or you can exit through the back of the room, go up one flight of stairs and exit to your left. You don't have to go all the way to the lobby to be able to exit the building.

Tonight, we'll be making forward-looking statements. These are based on management's current expectations, estimates and projections. All statements that address projections about the future, including the company's strategy for growth, product development, market position, expected expenditures and financial results are all forward-looking statements. These statements are not guarantees of future performance and involve a number of risks and assumptions. Many factors, including those discussed more fully in reports filed by DuPont with the SEC, could cause results to differ materially from those stated. We strongly encourage you to review these filings to obtain additional information about our risk factors.

Now, it's my privilege to turn the program over to our Chair and Chief Executive Officer, Ellen Kullman.

Ellen Kullman

Thank you. Thank you, Karen. I'd like to actually start a little differently. So if Karen's going to have a heart attack up here, we'll see. But we've noticed that not one of our guests here tonight actually held the handrail coming down the marble steps. So if you know DuPont, you know how serious we take, not only our own safety, but the safety of all of our guests. I personally have slid down those steps while holding on the handrail because I don't have this job for my natural grace. That wouldn't be the key criteria they use. They are slippery steps, being marble. So please, I want to send you home in the same way we got you, but with a lot more knowledge of DuPont and our strategy. So please do me a favor and hold on to the handrail. Is that okay, Karen? Karen actually approves of that.

So our theme for today's Investor Day is science powered, growth driven. And those 4 words sum up how we think about our company. Science enables innovation and is core to our competitive advantage, especially in these uncertain macroeconomic times. The breadth of our science is great across seeds, food, enzymes and advanced materials and uniquely positions us to address certain major unmet needs of a growing population. And our relentless focus on these growth opportunities means that we'll continue to expand our addressable market through new offerings, and we'll outperform our competition. Now through this, we are going to deliver compelling returns to our shareholders, and that is my commitment to you.

So tonight, we're focusing on our 2 newest segments: Nutrition & Health and Industrial Biosciences. These segments were created after the acquisition of Danisco. Each has a very strong foundation in science and a very strong foundation in market leadership position in their respective areas.

You'll hear about the exciting progress that we're making on integrating Danisco into DuPont. And what really is exciting to me, because whenever you do an acquisition, you never quite know if the assumptions that you're making in the beginning, how they'll turn out 9 months later. But we had told you that we do $130 million in cost synergies in 2013, and our commitment is that we are going to realize those cost synergies 1 year early, so we will realize those $130 million in cost synergies in 2012.

Now that performance, well ahead of schedule, is a testament to the hard work of the thousands of employees across the globe and affirms that one of the very tangible benefits of bringing these 2 companies together. So we're very excited about it. I tell you, each plant and research and development site I visit, I get even more excited about it. The people that have joined DuPont are first class, and I think they're going to really help create 2 very exciting new segments for DuPont.

So with that, I turn it over to Craig Binetti.

Craig F. Binetti

Thank you, Ellen, and good evening to those that are in the room and are joining us by webcast. I'm going to be talking about and reviewing our new Nutrition & Health business. Now for those of you that were in reception, you got a chance to taste some of our wonderful food ingredients that was in everything from the salads to the stir fries. And if you had a chance in the back of the room, you saw our product display that contains our food ingredients. And you really can see just a wide variety of products and brand names that we represent.

So what I want to review tonight is our compelling plans for this business and for you to see what a great fit this is for our company. Now as you remember, we've combined 2 world-class businesses, the Danisco specialty food ingredients with DuPont Nutrition & Health. And to size it for you, if you look at our sales on a pro forma basis, on an annual basis, it's about $3 billion in size.

Now our competitive advantages are many in this business. Our products are sustainable. They come from renewable sources. We have the leading nutrition science and food formulation capability, a broad portfolio of products and great relationships with customers. And you'll have a chance to see that tomorrow when Kellogg's joins our customer panel.

On Slide 2, I'd like to talk you about our mission for this newly integrated business, and that is about focused sales growth and margin expansion as the premier specialty food ingredients supplier in the industries. In leading this business, my priorities are: first, to maintain our business momentum and drive our integration to deliver on the synergies; second is to deliver above-market growth through opportunities for nutrition solutions, improved health and food protection where our science and technology capability can tackle solutions around the pressing challenges in the food industry; and third, to expand our PTOI margins in this business through our efforts on innovation, differential management and productivity. We're on a path to create a sustainable business with 7% to 9% compounded annual growth and margins of 12% to 14%. And I want to offer you insight of how we're going to accomplish this plan.

So let me take you to Slide 3 and talk to you about how we're positioned in specialty food ingredients on the value chain. We're a supplier to the package food and beverage industry. We're a supplier of high-quality ingredients to customers that include Nestlé, Kellogg's, Unilever, Kraft, General Mills the who's who of the food industry. And let me tell you that specialty food ingredients is a great space to play. It's a $40 billion industry growing at 6% per year, and that's above the packaged food industry because these ingredients provide unique solutions around taste, texture and health that allows it to enjoy these growth rates. And with innovation, DuPont Nutrition & Health can grow ahead of that market.

Now, food ingredients is a space that also contains commodities, such as starch, sugars and syrups. I want to be clear, we do not participate in that part of the value chain. We participate in the space with the highest growth and value segments. We plan to outperform the market based on our leading competitive position.

On Slide 4, I'd like to describe our business. We are comprised in the middle of the chart in 3 segments. We're the market leader in soy ingredients with our Solae joint venture. Soy is an important building block of nutrition, and it's found in many products from infant formula to sports drinks.

The second is our enablers business, which came from Danisco. Now, enablers is a combination of emulsifiers, texturants and systems. And they get their name, enablers, because they provide the fundamentals around taste, texture, mouth feel, shelf life, appearance. But these ingredients also allow food companies to substitute for fats, sugars and salts and create healthier profiles.

The third segment is a combination of DuPont and Danisco businesses in what we call health and protection. And this is a unique blend of sophisticated bio ingredients for both active nutrition and bio protection. These includes things such as culture, prebiotics, probiotics, natural sweeteners and food safety diagnostics. They require strong capabilities in both microbiology and molecular biology and fermentation engineering.

And finally, with Jim Collins in our Industrial Biosciences business, we jointly developed the enzymes for the food industry. And enzymes is another growing area of food where these ingredients provide some very special and unique properties. And as an enzyme producer, there is no doubt no one knows food better than us.

If you look at our footprint, we have a very strong global presence. We have 40 manufacturing sites around the world and 22 customer innovation centers. We're truly a global business. We participate in every major segment of food: dairy, beverage, bakery, confectionary, meat. 37% of our sales today come from the developing markets, which are growing faster than the overall industry. We're the largest specialty food ingredients supplier in China and in Brazil. No one has our size and presence in this industry.

Now I always like to describe it this way on Slide 5. Our ingredients make bread fresher, ice cream, cream cheese creamier, yogurt healthier, energy bars crunchier, jams and mayonnaise lower calories. We're making people healthier and food safer and more affordable. You find our products in every second ice cream, every second infant formula, every second nutrition bar. We're in every third cheese and every fourth loaf of bread. Almost every meal you eat at home or in a restaurant contains our high-quality food ingredients. This is a unique position, which we enjoy today, and we have ambitious plans to expand our market further.

So let us turn now on Slide 6 to the market, and I want to really discuss the trends that are influencing this. Now as I showed you when I talked about the value chain, we're a specialty food ingredients supplier in a $40 billion growing space at 6%. And these comprise ingredients, such as protein, texturants, cultures, colors and so forth. Now these ingredients supply to the food and beverage market, that's a $3.3 trillion marketplace for packaged food industry, which is fairly fragmented. Even the top 10 producers in the food worldwide represent only 11% of the marketplace. So it's fragmented and requires our reach to get there.

Now importantly, there are secular trends influencing the food industry. Certainly, as population grows, so does food. Yes, we all have to eat. But when I think about the pressing challenges in the food industry, this represents an opportunity for us to use our technology to provide solutions. Think about 2 billion people increase in the population growth over the next 40 years. Think about the growing middle class in developing regions of the world and economies with rapid urbanization and looking for more convenience and new products. Think about the need to nourish both a population, where 1 in 6 people go to bed hungry every night, yet 30% of the population is obese. We have increasing healthcare costs, increasing food safety concerns, and 30% of the food we produce today goes to waste.

So when I consider these challenges, we in DuPont Nutrition & Health can use our science to take advantage of the growth opportunities this represents for food ingredients. So whether we're working in Kenya on enabling the freshness of milk production or in Switzerland on a special protein for the aging, we need to provide solutions in all the markets.

On Slide 7, I'd like to talk about how we turn those opportunities for our business. So we want to take advantage of the market trends, and we want to narrow down on the areas that have the highest growth opportunities in the areas where we can differentiate. We're going to capitalize on the growth drivers for nutrition solutions, improved health and food protection offerings. Our science, our broad portfolio of products and services, provide a perfect combination to work collaboratively across the food value chain to create those solutions.

We have a very unique combination of nutrition solution. These are the building blocks around taste, texture or adding proteins or fibers or removing salts or sugars. We have the ability with our science to work on the growing areas of health concerns, areas such as digestive health, heart health, oral health, weight management. And with food protection, we have antimicrobial ingredients, the food safety diagnostics that allow us to work on preventing food spoilage and to detect problems that are occurring.

So if I take an inventory here, we've talked about the acquisition and the integration of 2 great businesses. I've talked to you about the big market space that's growing, and it's influenced by secular trends. And we segmented those into the highest growth opportunities around nutrition solutions, improved health and food protection. And now I want to talk about how our business is going to address those opportunities to advance our position and our products.

On Slide 8, I talk about how our growth and margin expansion uses our unique and strong competitive advantages to create above-market growth and expand our margins. I see our competitive advantages in having the industry-leading innovation, having the right relevant portfolio of products to provide food formulation capability across a wide variety of food applications, and we're here already leveraging in bringing together DuPont and Danisco.

Third, taking full advantage of our unique route to market, where we have a global sales and application organization that allows us to work both with multinational companies as they expand around the world and also local emerging food companies as they continue to grow.

And fourth, using our effective productivity tools, DuPont Production System, DuPont Integration, DuPont Integrated Business Management, we can take our productivity to new heights. So no other food ingredient supplier in this industry have those 4 integrated capabilities, which we believe we can continue to strengthen our position in an already exciting market space.

And so starting on Chart 9, I'd like to walk you through each of these 4 areas, so you see why I'm so confident in our position. And why I'm so confident, we are going to deliver on our business mission and financials. So let's start with industry-leading science. The acquisition of Danisco created a powerhouse in nutrition and health sciences and added significantly to our technology capability, such as genomics, nutrition science, microbiology, all which play a very critical role in the development of ingredients for Nutrition & Health. And when combined with DuPont production, agricultural and industrial biosciences technology, it creates an unrivaled innovation engine for our company.

Now we have 4 principal technologies in this business that cut from process to products. In the area of extraction, we have advanced proprietary separation technologies that we use to extract novel ingredients from renewable sources. We create pectin texturants from lime peels or we create natural sweeteners from the sap of birch trees.

When I talk about biotechnology, here we use tools of genomics, informatics, microbiology and fermentation engineering to produce a whole host of ingredients from antimicrobial cultures and probiotics. Biotechnologies is an essential building block for nutrition, health & protection solutions.

In the area of health, our capabilities and knowledge in immunology, clinical nutrition science that allows us to address those growing health concerns in heart, digestive, immune, oral care, weight management.

Most notably, our recent oral care health claim in Europe on a product called, Zevia, it's a natural sweetener. And the European Food and Safety Authority endorsed our claim that Zevia prevents tooth decay and plaque buildup. And this was the only health claim issued by EFSA last year, and we got it.

And in the food science and application area, we apply capabilities in food formulation, sensory, food science to provide unique solutions to our customers. And in any given year, we have over 1,000 developments with our customers that we work on, products that give them better shelf life, health and performance.

So this is an unparalleled portfolio of innovation capabilities I have listed on the bottom of this chart. Think about it from molecule to metabolism, from cell to solution, we're able to integrate across these capabilities and technology, focused on solutions for customers and creating new opportunities through our 22 innovation centers around the world and our 500 scientists that work every day in this business to create nutrition, health and protection offerings.

Let me move to the next area on Chart 10, which describes our competitive advantage on product breadth and scale. This chart describes our food ingredients portfolio against the competition. We have the widest and most relevant portfolio of ingredients for food formulation capabilities across dairy, beverage, bakery, confectionary, meat applications. And as you can see, as I've listed on the bottom, we also have the scale with the #1 or #2 position in those ingredients that we've chosen to participate in.

Now why is this so critical? When you think about a food company, you have to recognize that they're in very many different applications. They are in dairy. They're in meat. They're in confectionary. They're in bakery applications. And so what they're looking for is a supplier that can formulate across all those applications. They're looking for suppliers that can provide local capabilities and use multiple technologies. Our work with customers allow them to differentiate their products, as you can see on the product display in the back of the room, and at the same time, allows us to become their innovation partner of choice. We lead the industry in a number of customer innovation partnerships. And once again, you'll get a great feel for this tomorrow when you hear from Kellogg's.

On Chart 11, I'd like to talk about our advantage route to market. We have a single integrated sales and application organization as a single point of contact with customers. Now this is customer intimate, it's direct, and it's an advantage route for us. It similar to your experience with Pioneer. It's high touch and keen insight, and this is something I hear constantly from customers. Our ability to work with them on innovation, both locally and globally, is critically important to them.

In the food industry, taste and preferences are local. So you have to work with a multinational company like a Nestlé's or Kellogg's that are expanding around the world. You have to work in local countries like China, with a company like Cofco that's emerging. And then there are companies like Bimbo in Mexico, who's one of the leading bakeries in the world that are now beginning to expand their presence beyond their home country.

We have, in this organization, a 800-person sales and application organization positioned at these 22 innovation centers around the world. These are technically trained food scientists that have experience in the industry and know how to work on food formulation capabilities with our customers. This is a tremendous area of strength and capability for us in this industry. 80% of our purchases from customers buy more than one product from us. We work as a single point of contact, whether they work -- in whether a dairy application or a meat application. We're working on fiber content for tortillas in Mexico, dairy shelf life in China or improved yogurt health in France. We have unique knowledge and capability to participate.

Now through this process, as you can imagine, we get tremendous insight from our customers. We use formal processes in this business as well. One that I've listed here called Idealab, where we actually ask for them, what do they see as on the next horizon? And we use that skill and capability for us to develop our pipeline and what are the next new products and application we're developing. Now no one has the size, the depth or the ability to reach the market like we do. And this again is not something I assume, it's something I know from the highest rankings on customer satisfaction that we gain every year in this industry. We're outperforming the competition here. We're outperforming the market. We have a track record of success, and we'll continue to do so going forward.

The last competitive advantages I want to show on Chart 12. And obviously, productivity plays a major role in our margin expansion goals. We are right now driving over 60 cost synergy projects as part of the Danisco acquisition to fully deliver on the synergies we committed to through business simplification and redundancies. Our organization is excited about our new productivity tools: DuPont Production Systems and DuPont Integration, DuPont Integrated Business Management. And this, along with our footprint optimization, will deliver on the synergies we have committed to. And as Ellen just told you, we are ahead of plan.

Now I hope by describing the market, our competitive advantages has given you a flavor of how DuPont Nutrition & Health can differentiate and perform in this exciting market space. No specialty food ingredients supplier has our products, our technology, our local capabilities and our productivity tools. This makes us the premier specialty food ingredients supplier with our customers.

But before I finish the talk tonight, I wanted to give you some real practical, bring-to-life examples of exactly what it's like in our business day to day, working with customer on new products and new opportunities. And you'll see some of these products on display on the back of the room.

So let me turn to Slide 13. In the area of nutrition science, let me use an example of a product called, Fiberline. Here, we apply a combination of ingredients in a system, including enzymes to produce a more nutritious fiber-rich bread, which tastes great, is soft and has longer shelf life. In this particular case, we've taken the rye bread and given it the taste and appearance of wheat bread. We've made it softer and lighter, and this is something we're constantly working with customers. We're constantly working on how do we reduce salt, sugars or add fibers or proteins to our customer solutions around nutrition.

In the area of improved health, Solae protein products are used in nutrition bars. A claim -- a certified claim from the FDA where consuming 25 grams of soy protein per day lowers blood cholesterol and fights heart disease.

In the area of digestive health, our HOWARU products provide digestive benefits for both children and adults. Today in our Finnish R&D center, we have the only and the most advanced simulation model for digestion that enables us to study the impact of existing or new health ingredients on digestive health, including how bacteria population changes with diet and certain ingredients, such as a probiotic, a prebiotic or a fiber. From this kind of approach, we find rapid discovery for our products in working with our customers. And not only have in this case found digestion benefits, but we found a whole range of immune defenses that have also led to new products around anti-inflammatories.

And the final one I'd like to talk about is in the area of food protection. And here, we've launched BioVia. This is a natural antimicrobial that comes from plant extracts that's a valuable alternative to traditional chemical treatment against mold and yeast. Now this helps our customer with their clean labels, and it has great potential in beverages and sauces where you can think about both mold buildup even in refrigerated systems. I think we've all had that experience. And here through BioVia, what we're doing is we're substantially preventing food spoilage and waste for our customers.

Now these are just a few examples of how our needs -- and our customer utilize our industry-leading technology, our innovation, our broad portfolio of products against a number of different applications. And here, you see how we work jointly with them to differentiate ourselves and allow them to differentiate their products.

On Chart 14, I'd like to summarize it. These growth opportunities are before us, and we have a very strong competitive position. I see us making substantial improvement in our business. My priorities are to drive our business momentum, our integration, deliver on the key growth opportunities I described to you and expand our margins. By leveraging all these opportunities, I plan to deliver 7% to 9% growth from our 2011 base and expand our margins to 12% to 14%. Now this will not only cement our industry-leading position, but continue to establish ourselves as the premier specialty food ingredients supplier.

Now personally, I could tell you how excited I've been. I've spent the last 6 months through the acquisition visiting our plant sites, our laboratories and our customers. And you can't walk away from that experience more excited about what's possible here, the quality of our people, the quality of our technology, the quality of our customer relationships. We're off to a great start in this business, and the possibilities are before us. I'm very excited to be leading the new Nutrition & Health business and committed to deliver on the financial goals and mission that we set for our business. So I thank you for your time and attention tonight.

I'd like to introduce Jim Collins, who's the President of our Industrial Biosciences business. Jim has been a great colleague of mine. We've worked together on when Jim led our crop protection businesses. And just prior to this, Jim led our integration efforts of bringing Danisco into DuPont. And Jim and his team got us off to a great start in Nutrition & Health. So Jim, thank you.

James C. Collins

Great, thank you, Craig. As Craig said, I'm Jim Collins. I'm President of one of DuPont's newest business segments, Industrial Biosciences. This segment was formed, as Ellen mentioned earlier, with the acquisition of Danisco back in January. And I'm -- I became President of this segment in June, after having served as the overall integration leader for that Danisco acquisition. I'm extremely excited to be in this role, leading what will become a significant part of DuPont's growth over the coming years, delivering low-teen compounded annual growth rates and mid to high teens earnings margin.

Now I've spent the better part of the last year planning the Danisco acquisition, so it's an exciting time for me and for this newly formed team as our strategies, our technology and the talented individuals come together with a common purpose and goal to create solutions that will have a significant impact on the trends that are shaping our futures. So let's get started describing this new business to you.

Now this new unit has a simple mission shown on Slide #2, to create the industry-leading Industrial Biosciences business. Now it starts with our strong technology foundation in bioprocessing and protein engineering, and links to our capabilities and understanding of production agriculture and then to our already well-established presence in advanced materials. And DuPont is the only company that has significant depth and breadth across these 3 strategic platforms.

Now, a great example of this competitive advantage already in practice today is our bio-propanediol or PDO advanced material, which starts with corn produced from Pioneer seed, is transformed into sugars using enzymes developed by Genencor and further transformed in Sorona polymer using a production host developed by DuPont. This polymer is being sold by our DuPont Performance Polymers team into the automotive industry.

Now our work on cellulosic ethanol is another example of where we leverage Pioneer's agronomic understanding of how to sustainably remove corn residue from farmers' fields, to our knowledge of first-generation ethanol bioprocessing, to create a very sustainable biofuels platform.

Now third example is the leverage with Craig's Nutrition & Health business that you just heard him talk about. When you're the market leader in food ingredients, you know what customers need, and this valuable insight really drives our R&D efforts in this food enzymes space. Now Craig and his team sell our enzymes, along with all of their other offerings, in a very complete and efficient route to market. In all 3 of those examples, we are the only company that has all of these capabilities under one roof. And Industrial Biosciences is an important intersection for science and innovation across these platforms.

So advancing to Slide #3. You can see we've begun to organize our business, our strategies and our approach to market around 3 bio-based segments. Now we call them bioactives, biomaterials and biorefining. Now we think these names do a great job of describing their mission within the business. It also helps us segment our customers and our markets and allows us to leverage common capabilities and approaches to serving our customers within these segments.

Now the first, bioactives, is focused on bioactive enzymes. These are proteins and peptides that play an important role in animal nutrition, in food processing, in fabric and household cleaning and in personal care. Now examples here could be feed enzymes that allow animals to more efficiently convert agricultural inputs into protein, detergent enzymes that allow you to remove those tough stains from clothing while preserving the fabric's color brilliance or baking enzymes that extend the shelf life of a loaf of bread.

The second category includes biomaterials and biochemicals, like the Sorona polymer that I mentioned earlier. Now a great example here is the Sorona-based, SmartStrand products sold by Mohawk Industries. Now, they're the world's largest residential flooring manufacturer. This bio-based product provides a more sustainable route to carpet fiber. Derived from sugar, it delivers a lower-cost product than the petroleum-based option. It offers unique performance attributes that you cannot get from any other fiber. Now having all 3 of these attributes, renewably sourced, lower cost and differentiated properties, that's what it's going to take to win in this segment.

Now the third category are products that enable the further processing of sugars into fuels, such as ethanol today or butanol in the future, as well as the carbohydrates that are needed by the food and beverage industry. Conversion of biomass to sugars is the basic core mission here, and it's our cellulosic technology that moves forward. We will now have 3 revenue streams in this market space: the licensing of engineering design and technology, the sales of some biofuels, but now the sales of merchant enzymes that will be used by all of these new plants for their operation.

So shifting to Slide 4. As an integrated bio-based business, we are very focused across the value chain accessing the low-cost sustainable sources of carbon, like starch or biomass residue and converting them to the basic sugars that can be further processed into those bio products for our customers. In other words, sugar becomes our new oil. We have a substantial competitive advantage in our technology for the production of these sugars and the transformation of these sugars into bio-based products.

Now, Slide 5 highlights another very important point. Even though these 3 segments are very different in their end market focus, there's some very common capabilities that link them together and that can be highly leveraged across all 3 of those. The first is the fact that they all began with renewable feedstocks, whether it's dry ground corn for butanol production in the Midwest or starch from a sugar mill in Tennessee for our Sorona polymer or sugars for enzyme fermentation for our detergent enzymes that are in your laundry detergent. They all start with production agriculture.

Now a second element, these innovations rely on our ability to design and operate cells as factories. Now we like to say, we don't have a few manufacturing sites around the world. We actually have billions of factories. Every day, billions of cells produce the products that we sell. It's an important differentiator for us, because any boutique laboratory can create a single cell or a protein in a very controlled environment that can produce wonderful novel products. But doing that on an industrial scale in varying conditions at a cost that is economic for your customers, now that's the thing that separates DuPont from most of the other companies that operate in this space. And finally, our solutions provide process and product sustainability for us and also importantly for our customers.

So there's a nice summary here on Slide 6 of what I've just shared. We believe we can be the leader in developing solutions that create value for us and for our customers in a very sustainable way that reduce the dependence on oil and produce new benefits for our customers. Now this is a perfect alignment with the vision and the mission of the DuPont company.

So let me take a little time now to describe to you who we are today on Chart 7. Post the integration, we are 2,500 employees located in 30 countries globally. Included in that total are approximately 600 scientists and engineers located in 8 R&D centers around the world. Now, many of these R&D centers specialize in specific disciplines, like enzyme discovery or protein engineering or strain optimization, as well as fermentation development. This allows for a more -- much more specialization and efficiencies in this R&D space. But it also creates a very global R&D community to collaborate on our programs almost 24 hours a day. Now we're already seeing the benefits of our 2 teams coming together, not only in cost synergies, but also in productivity. Our omega-3 team, for an example, has already collaborated to reduce the cost of goods for this important new program by 2/3 from where we were just before the acquisition.

Now, I mentioned we do biotechnology on an industrial scale, so we do have 19 manufacturing locations around the world that are located very close to our customers as well as the best sources of raw material. I couldn't be prouder of the team globally and how we've come together as a group. The cultural fit of these 2 teams has been very good, and our speed of coming together has been much faster than we expected. Together, we're building this very strong entrepreneurial spirit, and it's based on this technological foundation that we're talking about. And this has become this new Industrial Biosciences business team.

So looking at our sales profile on Chart #8. Our sales for 2011 on a pro forma basis will be about $1.1 billion. You can see how those sales break down according to the segments that we discussed, the largest being bioactives, end use enzyme sales with detergents, animal nutrition and biomass processing being our 3 largest marketing segments. Today, we're primarily a North American and European business, but we've been growing very nicely in China. We expect to continue our strong growth in those developed markets, but with an ever-increasing presence from the developing markets like China, but also India and Brazil. And we will be tapping into the well-established DuPont infrastructure in those countries to help accelerate that growth.

On Slide 9, as we look towards the future, we're developing strategies to win in these 3 market segments. We see our addressable market in bioactives in the $3 billion to $4 billion range, which helped with -- which has very healthy growth rates. While this may be the smallest of our markets, it has the highest margins. New technology and expanding our -- and expanding global affluence are the key drivers that are really growing this segment.

Now the types of products in the biomaterials markets, where we are aiming at, represent about a $20 billion opportunity. Greener solutions and lower costs are drivers here, but also that desire to diversify to other feedstocks and reduce volatility are becoming very important.

Now finally, our largest opportunities in the biofuels arena. It may be the biggest and have very attractive growth rates, but the margins here can be very tight. Therefore, developing multiple sources of income in this space is critical. And so we've selected spaces where we can use licensing of our technology, where we can participate in some actual fuel sales, and importantly, sell our enzymes as our key focus. Overall, we're aiming at a market space of about $40 billion.

Now on Slide 10, we've summarized a few examples of others, who operate in this industry. It contains a number of start-ups in boutique companies, plus some of the major names that have been here for a long time and some nontraditional players, like the oil companies who have also seen the opportunities for biofuels that I mentioned earlier. What's important to take away here is that DuPont is the only company that operates across the entire value chain, but with the necessary depth and key-enabling capabilities that it will take to win. Now I think this depth and convergence of capability will be an important differentiator for us with regard to speed and ease of implementation. Now we're already learning this with Genencor. Now that our DuPont-Danisco cellulosic joint venture has been fully integrated into the DuPont company, we've seen an improvement in communications, a better alignment on goals and objectives and an expansion of our strategy to capture additional revenues from opportunities that we had not seen when we were just partners in cellulosic ethanol.

So Slide 11 is the first view of our integrated pipeline across all 3 of these segments. This highlights just a selected few of our programs, and I'll touch on a couple of them more in detail in just a few minutes. But overall, I believe it's a very balanced portfolio across these segments. We're applying some very disciplined processes to assure we're selecting and driving the most optimized mix of initiatives. And we're mindful that supporting both the short-term health of the business and the long-term growth are important. So you'll see programs that can be developed in 18 months, like our cold water washing enzymes designed to lower washing temperatures with equal or better cleaning, balanced with programs like bioisoprene or biobutanol, which are more long-term opportunities.

So let me talk about a few of these in a little more detail. Our first example on Slide 12 is in the bioactive enzyme areas. Now we sell enzymes that are added to feed products to help animals better digest a variety of feed inputs. This year, we launched a new feed enzyme product. Now this is a blend of proprietary enzymes that have been custom tailored to the needs of the U.S. poultry producer. Now responding to our customers' challenges of rising feed cost, we developed a product that enabled a much more efficient use of their existing ingredients. It lowered the use of other expensive ingredients like antibiotics, and it enabled them to produce a more uniform finished product, which allowed for higher selling prices on their part and much more weight gain per unit of input. You can see it resulted in a $7 per ton feed cost savings, which is a 5% reduction in their most expensive input. The response for this product has been fantastic. In our first year of launch, we've sold almost $25 million of this offering.

Now moving to Slide 13. In our biomaterials platform, we're very excited about our continuing work on bioisoprene. Now as many of you know, isoprene is already a very important raw material in the production of tires and adhesives worldwide. It can be derived from refining petroleum products, but its quantities are limited by the mass balance of how a petroleum refinery operates. So if we could make more, it has an almost guaranteed market as an excellent replacement for natural rubber, which also has risks from sustainability of supply, both from an ability for natural rubber to meet this growing demand -- and think about the growth in tires for markets like India and China, and also from this very narrow geographic band where rubber plantations are found that are subject to both natural and social unrest. So taking into account all of these factors, Goodyear approached us several years ago to develop a bio-based platform to produce isoprene. We're making great progress, and we expect to be constructing a pilot plant in 2012, assuming we hit some key milestones early next year.

Now I'll also bring up this example because it's a great example of the power of this integrated DuPont capability that we're talking about. Isoprene is a very flammable gas. Genencor had suspended their fermentation trials early in 2011 due to some safety concerns. Within almost the first week after the acquisition, DuPont engineers, who have had many years of experience in working in these types of environments, were working with our team in Palo Alto to bring those fermenters back online in a safe and more reliable way. I'm happy to report we're operating again, and the trials are growing great.

So finally let's talk briefly about our cellulosic ethanol program, starting with Slide 14. Now any discussion has to start with a summary of the overall biofuels market. This has to be one of the most successful examples of the world moving toward more sustainable fuels, with over 28 billion gallons of biofuels produced in 2011. Now that's still only 3% of total transport fuels. More than 50 countries around the world have enacted mandates for biofuels inclusions, and it has been one of the best rural job creation opportunities in decades. In the U.S., the presence of the Renewable Fuels Standard, or RFS, creates a very predictable ramp-up of second-generation fuels required to meet this mandate. Now subsidies on first generation fuels have done their job to stimulate growth and investment, and it's time for those subsidies to be stabilized and reinforced for next generation fuels to enable this next wave of innovation, this next wave of growth. Based on the demand projections that you see there, we're going to need a substantial number of new cellulosic plants to be built to meet those mandates. Now, DuPont may not be the one building or investing in all of these facilities, but we do intend to be the technology that is inside most of them and the enzyme software that allows those facilities to operate. So that's why we're so excited about our progress on our cellulosic ethanol program.

Turning to Slide 15. We have a demonstration facility operating in Vonore, Tennessee, which I think many of you have seen. It is operating based on corn residue. We call it stover. It's the leaves and stalks and cobs that are left over after the corn harvest. The ethanol produced at our Vonore facility powers most of the fleet vehicles at the University of Tennessee in Knoxville. The plant is in its very final stages of generating valuable basic data that we will be using for the design of our full scale 25 million gallon per year facility that you can see depicted there on the left. We've purchased the land in Nevada, Iowa for the first construction, with groundbreaking expected sometime in mid-2012.

Now 2 weeks ago, we announced the completion of the 2011 stover harvest campaign in Iowa, with over 15,000 tons of stover harvested. In partnership with Pioneer and the Iowa State University, we have confirmed the logistics and the economics of delivering stover according to our original project estimates, but also the agronomic sustainability of removing stover from growers' fields without damaging the productive capacity of the land. In some cases, growers participating in our pilot program are seeing yield improvements by partially removing this ever-increasing quantity of biomass due to higher yielding hybrids that makes this stover more and more difficult to manage.

Our demonstration growers are already asking to participate in our program in an expanded way for 2012, and many of their neighbors are coming to see us as well, wanting to be a part of this exciting new program. We'll keep you updated as we make continued great progress in 2012.

So moving to Slide 16. I think it's important to emphasize that biofuels is a market that we operate in today with our enzyme business. And we probably know as much as anyone about how an ethanol or sugar wet mill operates. Now this is a key differentiator for us as our customers actually come to our facilities in Cedar Rapids, Iowa to test more efficient ways in our demonstration facilities to go back and learn how to run their plants more efficiently. Now this knowledge will continue to expand with new technology even in first generation fuels, but will be enhanced by our presence in second generation fuels. So I've summarized some of the important milestones that we expect to see in all of these areas through 2020 on this chart.

So let me close with one last example on Slide #17. Now we've talked a lot about technology from a new product perspective, and clearly, we have some exciting things in our pipeline. However, our expertise in designing and operating cells as factories gives us another important source of competitive advantage. As we engineer the host strains that actually produce the products we've been discussing, we are constantly working on these microscopic manufacturing plants to make them more productive. The picture at the right is one of our fungal hosts that produces many of our products. Now this can be a very viscous fermentation broth as depicted by the picture on the left. Our protein engineers actually changed the way this fungi grows to eliminate this viscosity. Now this meant we could pack much more microbes into a smaller space, and we were able to get much more oxygen moving through the broth. It's projects like these that allow us to expand output without large increases in capacity year-over-year. These projects free up valuable capacity for growth, but also improve the cost of goods of our existing programs. We free up about 5% to 10% of our capacity each year in ways just like this, avoiding $50 million per year in additional capital investment just to keep up with our growth strategies.

This use of science to drive productivity is an important advantage and certainly a key enabler for our growth. We're optimizing our factories every day. We just do some of that optimization work at the DNA level. Overall, we're on track, as Craig also mentioned and Ellen talked about, to exceed the synergy targets from the acquisition through a combination of cost, revenue and productivity and programs that we talked about like the one here.

So in closing on Slide 18, overall, we're very excited about the growth potential of this business. We see growth from a broader portfolio and a better application development of our new products. We see growth from expanding our geographic presence and a further expansion of our biomaterials business as the global economies recover. We see cumulative average growth rates for revenue in the 10% to 12% range and PTOI margin in the mid to high teens for this business over the planning horizon. Now we know new products and top line growth are important, but earnings from acquisition synergies are also critical, and we're on track to deliver those as well. Margins will also begin to improve as we start to see the licensing income from our cellulosic and butanol biofuels later this decade.

Now I spent 25 years, as Craig mentioned, in the crop protection business, helping them achieve the success that you see that they've had this year. It's something I'm very proud of. I expect to do the same thing here in Industrial Biosciences, but in a much shorter time line.

So thanks for the opportunity, and let me now turn things back over to Karen, who I think will set us up for some Q&A. So Karen?

Karen A. Fletcher

Thanks, Jim. You can stay up here. Okay, thank you, Jim, and thank you, Craig, for your talks tonight. I hope the audience learned more about these 2 new segments. I'd like to invite Craig and Jim both back up on stage with me. I'm also going to invite Tom Connelly and Jim Borel, two of our Executive Vice Presidents, who have accountability for the areas that you heard about this evening.

So just a couple of things before we open up the floor. If you have a question, please raise your hand. Somebody from the IR team is going to come around with a microphone. And if you don't mind, please identify yourself for the benefit of the webcast audience. We are going to post our transcripts to our website probably later this evening. So now, we'll take the next 20 minutes or so and take your questions.

Question-and-Answer Session

Karen A. Fletcher


Andrew W. Cash - UBS Investment Bank, Research Division

It's Andy Cash with UBS. In terms of your Nutrition and Health business, your growth rate assumption is -- or your goal is 5 to -- excuse me, 7% to 9%. If I recall correctly, Danisco was growing a little bit little slower than that. So I was wondering, maybe Danisco was capital constrained, you can put more capital on the business? What do you bring to the party that's going to lift their historical growth rates?

Craig F. Binetti

Yes, I think I tried to highlight some of these things. But what we see is first, we're bringing together very complementary capabilities. So were -- expanded our product portfolio and breadth. I see us with the full innovation capability and the fact that we can integrate across our businesses here as well to create those above growth line. That's why we're focused on those 3 areas I mentioned: nutrition solutions, improved health, improved protection technologies. That's going to allow us to get the growth rates higher than what we've done.

Karen A. Fletcher


David L. Begleiter - Deutsche Bank AG, Research Division

David Begleiter, Deutsche Bank. Craig, in your business, what's been the cause of the lower margins in the past? Why hasn't [indiscernible] paid to the value you generate? And why not aim at higher margin going forward, given how much value you will provide to your customers longer term?

Craig F. Binetti

So we've worked very hard on improving that business and working on the transformation of our existing business in Nutrition & Health over that time. We, as an example, we exited some low margin business, over $100 million of low margin business there. We've restructured. We've reduced our headcount, and we've begun to put -- we put our resources on the more specialty segments that play through the health and wellness trends in that business. And over that period of time, we've actually, as you saw, actually expand the margins. And the same time, the productivity measures we put in stripped out over $100 million of working capital in that business. And over these last 3 years, we've generated over $500 million in cash flow from those businesses. So we've worked really hard on continuing to transform. And now with these capabilities we have with Danisco, a broader portfolio, a broader range, greater global market presence, that's how we can get to that next stage.

Karen A. Fletcher

On this side. Mark?

Mark R. Gulley - Ticonderoga Securities LLC, Research Division

Mark Gulley, Ticonderoga Securities. One question each for the Jim's: Jim Collins and Jim Borel. First of all, you talked about, Jim Collins, that you're successful in the procurement of the corn stover. What about the costs? Do you think the cost is dependent upon the crop's nutrient values? Then for Jim Borel, Jim, you said that removing corn stover has some benefits. I'd like Jim Borel to comment on the fact, are you implying that the yield decrement on corn on corn on corn could be removed by him taking off the corn stover? Is that really real or not?

James C. Collins

So absolutely, a big part of the pilot was to confirm the logistics of moving stover around -- of sustainably harvesting it off of the land without damaging the productive capability. And as I mentioned, we have a lot of great support from Pioneer and Iowa State to work on that. The other part of it was to also confirm that just the logistics around the storage of these bales, understanding the best way to store them, the temperature profile of them, the optimal moisture content to harvest them at, all of that was tested this year. But then the other part is the economics, and the largest cost of delivering those bales of stover to the front gate of the plan is in the transportation, so understanding all of the pieces. And we confirmed our economic assumptions, our understandings that we had in the project. So all of the cost assumptions for producing ethanol based on that were confirmed in the pilot.

James C. Borel

And Mark, as it relates to the taking stover off of the land. The way I think about it is really paying attention to the agronomics. If you think about the reduction in tillage over the last few decades and the increasing yields, which is also delivering more stover, it's not just corn on corn. It's just there's a lot of vegetated material that's left on the field. And so the question we had was how much of that is really needed for nutrients as well as for soil erosion prevention? And how much really could be soundly taken off the field? And that's really some of the work that Jim was talking about that we did in conjunction with Iowa State and others. And so it's really kind of optimizing the agronomic opportunity. It's one of the great things about the partnership with -- between Pioneer and Industrial Biosciences because the Pioneer folks, not only know the farmers, but they've got a really solid grounding in agronomy on a very local basis, so they can help farmers make the right choices there.

Karen A. Fletcher

Jean, up here. Kevin?

Kevin W. McCarthy - BofA Merrill Lynch, Research Division

Kevin McCarthy, BofA Merrill Lynch, 2-part question on synergies. First, do you see potential to raise the ceiling on the $130 million of cost synergies in addition to having accelerated the timeline by a year? And then second part, Craig, in your presentation, I think you mentioned that 80% of your customers are buying multiple products from DuPont. In that context, shouldn't there be opportunities for cross-selling synergies? And if not, why not?

Craig F. Binetti

Maybe I'll start with the -- on the cost synergy side. First of all as the guys mentioned, they're ahead of plan already on the cost synergies. And we're going to drive those, and we're certainly not going to stop if we see additional opportunity. But I think what you'll see is we'll move from the point of synergies by putting the businesses together to simply, productivity improvement. And productivity really is a way of life across the whole company. So we'll continue to deliver productivity improvements going forward. Whether we could trace those back and say they're synergies or not. In a few years, it will be hard to tell the difference, but we see continued productivity.

James C. Borel


Craig F. Binetti

If I just -- you want me to touch the question? So we definitely the businesses as complementary of the position we were in, in DuPont Nutrition & Health with Danisco. Particularly, the DuPont businesses were very strong in the area of meat, and Danisco is very strong in the areas of bakery and dairy. So we're utilizing those opportunities as part of our focus with customers, Kevin, to continue to drive growth through part of the integration.

Karen A. Fletcher


Donald Carson - Susquehanna Financial Group, LLLP, Research Division

This is Don Carson with Susquehanna. Two questions, first on housekeeping. You talked about your long-term growth targets for sales and margins. How long term is long term, specifically where you expect to be by 2015 for each of those businesses? And then for Jim Collins, how dependent is your cellulosic ethanol and biobutanol business on subsidies? Are you assuming that subsidies will go away, both lender tax credits and import tariffs for non-corn based ethanol as well? And is it just the RFS that's going to drive those 2 businesses?

Thomas M. Connelly

On the -- maybe I can go first on the longer-term goals. Well, we aren't laying a specific year in place. Over the next several years, we'll be moving toward those ranges. So we're not identifying a specific target year, but it's within the planning horizon.

James C. Collins

Let me take a shot at, Don, your question on subsidies and maybe I'll start at a high level and say that we're building technologies that we fully expect, when they're at scale and maturity, will be competitive on an economic basis. Otherwise, you're just setting yourself up for some sort of ongoing subsidy. However, good policy will support a technology that when it achieves scale and maturity, when we get down that learning curve, we'll be competitive. And I think stable government policy with the kind of subsidies as well as the RFS need to stay in place for this decade in order to make sure that, not just DuPont, but the country is able to move and field new technologies, such as cellulosic ethanol and biobutanol. But long range, we understand that we need to move beyond that and be fully competitive on an economic basis.

Karen A. Fletcher

How about this side of the room? Laurie [ph]? Okay.

John E. Roberts - Buckingham Research Group, Inc.

Go back to this side then. John Roberts, Buckingham Research. The 25 million gallons on the cellulosic, is that sort of final commercial scale that you expect, and kind of, it's limited by biomass? Or do you go bigger than that? And then how big is the ethanol plant and -- that you're going to convert to biobutanol? It seems here you've got a point here about a conversion of an ethanol plant to biobutanol?

James C. Collins

Yes, so the 25 million gallons actually, technically, it's 27 million. And that's kind of the breakpoint for the first size of that facility. And so we think that's kind of the optimal scale to test a first generation of our commercial technology. We would design and build these in a way that a 50 million gallon scale plant would be possible, so we'll start here, demonstrate that and then rapidly scale it as we go forward. And the second part of your question, I had a little trouble hearing, sorry.

John E. Roberts - Buckingham Research Group, Inc.

It said on there, you expect in 2012 to 2014 to convert an ethanol plant to biobutanol? What's the capacity there?

James C. Collins

So just recently I think in the last week, we announced Highwater energy. It's a current grain-based ethanol facility in Minnesota, has signed up to kind of be our first conversion. And we're working with them now on kind of the terms of that arrangement. And we would start that dialogue in 2012. This is a 50 million gallon per year ethanol facility, and it was one of the last ones built. So it is, by far, the most modern, which makes it a great candidate. These are very -- it's a very modern operation. They like to be leading edge in technology, and they've -- they're very excited about being part of this first conversion.

Karen A. Fletcher

I think we have one in the back.

Laurence Alexander - Jefferies & Company, Inc., Research Division

Laurence Alexander, Jefferies, two questions. For Jim, as you look across getting your enzyme platform to be up to scale, competitive with your competitors -- I'm thinking Novozymes, in terms of the different classes of enzymes. And as you think about the first few demonstration facilities that you need to fund on the ethanol side before, someone else will fund the platform and then license your technology. How much total capital do you think you need to spend over the next 3 to 5 years before this platform inflects? And then for Craig, if you look at cross-selling opportunities, and I'm thinking here between your food packaging business or DuPont's packaging business and your business, do you have the right product suites? Or are there any gaps that you need to do to make that cross-selling actually be efficient?

James C. Collins

So let me take the first question with regard to how much capital is going to be involved in the demonstration phase. Let me just repeat what Jim said, first of all, our participation in biofuels is going to be through enzyme sales through technology licensing and to some degree, participation. And of course, we've got a lot of latitude as to the extent to which we want to be a participant. And frankly, there'll be a lot more plants built than we have an interest in participating in. But to give you a sense that we do need to put in place the demonstration facilities. That's going to be an investment of couple of $100 million, say, so over the next 4 to 5 years, we'll be investing on the order of $100 million a year to flesh out this program.

Craig F. Binetti

Laurence, you talked about the connection with food packaging in our portfolio. You're going to get a great example of this tomorrow when Kellogg's joins the customer panel. And they're going to talk about how we, in DuPont, approach the customer with our full offering across the company, bringing our full capabilities. And you'll get some examples in there around food packaging. In terms of our portfolio, I think I was trying to highlight, we have a very relevant and very capable portfolio of ingredients today that we're integrating, and we feel that we really have a unique position today on our portfolio. And we'll continue to look, of course, for opportunities going forward, but we really feel good about our portfolio and our offering to customers and the ratings they give us on our capabilities.

Karen A. Fletcher

Jean, I think there's one in the back.

James Fitzpatrick - Princeton Capital Management, Inc.

Jim Fitzpatrick of Princeton Capital Management. For Sorona, going forward from carpet fibers forward, how much development work is -- will be needed before it shows up importantly in apparel? And what role will it pay the night [ph], be expected to play both from participation and from compensation?

James C. Collins

So if I heard your question right, it was about Sorona, both in carpet and apparel. Is that correct? And so we continue to enjoy good growth in the residential carpet market. As you know, economically, that market has been depressed just because of how we built and those type of things. But we're benefiting from gaining more share of the existing space, and this is due to what I mentioned earlier. It's due to the superior performance. You cannot get the performance and the carpet fiber any other way except through Sorona. And so Mohawk has been a very strong partner of ours and has done a very nice job of advertising and promoting not just that it's green and renewable, but also that this is some superior performance. So we would expect to see that growth continue over time. In the apparel market, it was a little bit different. It suffers a little more from changes in style, right? As fads come in and out, it has a tendency to be much more cyclic. And so we've been through a few of those cycles. We're very excited about the investments that we've been making in the applications development area to, once again, show off the really unique attributes that this polymer delivers. And so working to find those real niche opportunities, things like swimwear, things like intimate apparel where you cannot get the kind of performance any other way, even except from Sorona. So we continue to be optimistic about both of those segments.

Karen A. Fletcher

Okay, last question, Jeff?

Jeffrey J. Zekauskas - JP Morgan Chase & Co, Research Division

Jeff Zekauskas, JPMorgan. I have a question to Jim Collins about the Genencor asset. Genencor has a relatively narrow product line in comparison to Novozymes. And you spoke of it really not having much of an Asian presence. So in the coming year, what are your priorities? That is what at Genencor do you wish to fix first and why? And maybe you can give us an idea of Genencor's competitive strengths and its vulnerabilities?

James C. Collins

So this portfolio question is a great one, and it really differs by segment. So for example in the animal nutrition segment, we actually have the broadest portfolio of enzymes, and we would compete #1, versus those guys in most of the markets. When you look at our fabric and house care segment, this is an example of where we do have some portfolio gaps. And a big part of our strategy is, as we start kind of being part of the DuPont, we start to look at the resources that we have available, picking those high value investment opportunities and reallocating appropriately is one of our core strategies. And I mentioned it in my summary as broadening our portfolio is job 1 in that segment. And then the geographic growth is job 2, and this is where we really benefit from the infrastructure that a DuPont has in places like China, and India would be second. And Brazil, Brazil is a huge biofuels market, and we have a very, very relatively small market share there today. So these are 2 of our core growth strategies. Tom, anything else you'd add?

Karen A. Fletcher

Okay, analysts, thank you very much. I appreciate it. Folks, tomorrow morning, our program will begin at 8:00 sharp. We thank everybody, who's joined us by webcast, and hope you can rejoin us in the morning. In the meantime, thanks, everybody, and good night.

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