April 25, 2007

DuPont's Q1 profit up 16 percent on increased GM corn seeds

US crop genetics and chemical firm DuPont Co. said profits for the first-quarter profit has soared by 16 percent after surge in demand for ethanol spurred record sales of its corn seeds.

Chief Executive Officer Charles O. Holliday Jr said the company will expand output of seeds genetically modified to resist pests and herbicides as US farmers prepared to plant the most corn acres since World War II.

Sales at the Pioneer seed unit surged 20 percent to US$1.5 billion after demand for ethanol, a grain-based fuel, sent the price of corn to the highest in a decade.

Being the biggest US producer of corn seed in 2006, DuPont's Pioneer unit welcomes the US Department of Agriculture's report of US farmers' plans to increase corn acreage by 15 percent to 90.5 million acres.

Carl J. Lukach, DuPont's investor-relations vice president said profit at the agriculture unit rose 9 percent to US$651 million as 75 percent of North American genetically modified corn-seed sales were up from 60 percent last year.

DuPont also doubled its corn-seed sales in Brazil, he said.

The company's top share, however, is threatened by Monsanto which said it gained 3 percentage points of US sales this year. Holliday declined to say whether DuPont lost market share.

The company's market niche is seen to be steady next year as output of so-called triple-stack corn seed rises to as much as 33 percent of production from 10 percent this year, Lukach said. Triple stacks are popular because they resist weed killer and two types of insects. DuPont planted the seeds in South America and flew them to the US to meet demand, Lukach said.