The unit, which supplies everything from soy-based food ingredients to tablet binders, could be worth at least US$20 billion as a standalone entity, Bloomberg said.

DuPont declined to comment on the unit’s divestiture.

The Wilmington, Delaware-based company said in February that its overall goal was to divest about 10 per cent of its portfolio.

DuPont was a part of DowDupont until a split earlier this year. DowDupont in June also spun off the merged company’s seed and crop protection businesses under the name Corteva, and in April spun off its materials science division under the Dow name.

The nutrition and biosciences unit, DuPont’s biggest revenue generator in 2018 on a pro-forma basis, was hit by lower sales of food, beverage and pharma solutions in the latest reported quarter, and brought in four per cent lower sales than a year earlier.

— Reporting for Reuters by Debroop Roy and Manojna Maddipatla in Bangalore.

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Investors cheered Corteva’s upbeat numbers, its first after separation from DowDupont in June, as they were a rare bright spot among agricultural companies that have been hard hit as floods ravaged huge swathes of western Corn Belt states.

The devastation pushed down total planted acres and demand for crop protection products like herbicides and pesticides.

Chief Executive James Collins, on a post-earnings call with analysts, said the unprecedented market backdrop for the second quarter presented considerable challenges to Corteva’s customers and in turn, to the company.

“Flooding, planting delays, prevented planting, delayed deliveries, insect pressures, trade-related market disruptions, the list is long and exceptional when viewed from the lens of history,” he added.

The weather woes are heaping more pain on the battered U.S. agricultural sector already hard hit by the prolonged U.S.-China trade tiff. The tariffs China imposed on soybean exports from the United States in retaliation for U.S. duties on Chinese goods curbed shipments of the most valuable U.S. export crop.

Net sales grew 10 percent from markets outside of North America, with Latin America rising 34 percent . Volumes from markets abroad rose 14 percent , while prices were up 3 percent .

On the other hand, sales in its home market fell 8 percent, with volumes down 5 percent and prices down 3 percent .

The former agricultural unit of chemicals giant DowDuPont, however, cut its 2019 core earnings expectation to between $1.9 billion and $2.05 billion from a prior forecast of $2.20 billion and $2.30 billion.

The company now expects net sales to be down about 3 percent , compared with its earlier forecast for sales to be flat.

Net sales in the current quarter fell 3.1 percent to $5.56 billion, but came in slightly above estimates of $5.52 billion.

Net profit from continuing operations attributable to Corteva fell to $470 million, or 63 cents per share, from $963 million, or $1.29 per share, a year earlier.

Excluding items, it earned $1.42 per share compared with analysts estimates of $1, according to Refinitiv IBES data.

Shares of the company were up 8.4 percent at $31.99 in late morning trading.

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The Delaware-based agribusiness, under the name Corteva, Inc., is scheduled to begin “when-issued” trading on the NYSE on May 24, and “regular way” trading on June 3, under the ticker symbol “CTVA.”

DowDuPont — the holding company formed in 2017 by the merger of Dow and DuPont — announced Wednesday that the U.S. Securities and Exchange Commission has declared Corteva’s registration statement effective, and that the DowDuPont board of directors has approved Corteva’s spinoff.

“This milestone marks the completion of all the regulatory requirements for us to separate into a leading pure-play independent agriculture company on June 1,” Corteva CEO James Collins said in a release.

“Corteva Agriscience is well positioned to drive long-term value for shareholders as we leverage our balanced portfolio and robust innovation pipeline to deliver the complete solution farmers need to maximize yield and profitability,”

The spinoff calls for each current shareholder in DowDuPont to receive one share of Corteva common stock for every three shares of DowDuPont common stock they hold.

DowDuPont on June 1 will also rename itself DuPont de Nemours, Inc., doing business under the name DuPont.

The new DuPont will operate the two companies’ combined specialty chemical product operations. Dow and DuPont’s combined materials science divisions, which were spun off in March, now operate under the Dow name.

Corteva’s operations in Canada include seeds, sold under the Pioneer and Brevant brand names, with herbicide-tolerant trait systems including Enlist, Optimum GLY, SmartStax and, since February, Clearfield.

Corteva’s roster of crop protection chemicals in the Canadian market includes, among others, herbicides such as Enlist Duo, Lontrel, Frontline, Grazon and Tordon; insecticides such as Lorsban and Delegate; seed treatments such as Lumiderm, Lumisena and Lumivia; and fungicides such as Acapela and Nova.

Worldwide, the Corteva agriculture segments have booked combined annual net sales of over US$14 billion in recent years. Their combined EBITDA (earnings before interest, taxes, depreciation and amortization) for 2018 came in at US$2.05 billion. — Glacier FarmMedia Network

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The Reuters news service on Tuesday reported safety certificate approvals from China’s ministry of agriculture and rural affairs for biotech traits including:

• Bayer’s 88302, or TruFlex canola, approved in Canada since 2012;
• BASF’s RF3, a Liberty herbicide-tolerant canola, also approved in Canada since 2012;
• DAS-44405-6, DowDuPont’s Enlist E3 soybeans, approved in Canada since 2013;
• DP 4114, DowDuPont’s Qrome corn, approved in Canada since 2013; and
• BASF’s glufosinate-tolerant SYHT0H2 soybeans, approved in Canada since 2015.

Approval of traits in China is particularly important because it’s Canada’s largest canola seed customer, the Canola Council of Canada said Tuesday.

Recently, the council noted, Canada and China agreed to double agriculture trade by 2025. Canada’s canola sector “will continue to work with China to improve trade predictability.”

China’s approvals will allow the canola industry to proceed with full commercialization of the TruFlex trait and RF3, the council said.

Once those two traits and Corteva’s Optimum GLY — a proprietary glyphosate-tolerant canola which got Canadian regulatory approval in 2012 — are fully commercialized, “the industry expects growers will produce $400 million more canola every year using the same amount of land,” the council said.

New genetics, in combination with the new traits, are expected to improve yields, weed control, disease resistance and crops’ resilience to heat, cold, drought and excess moisture and to reduce harvest loss, the council said.

“Not only will we be able to produce more canola to meet growing world demand, we’ll also be able to do it sustainably, using the same land base,” council president Jim Everson said.

The TruFlex, RF3 and Optimum GLY traits, while all approved in Canada since 2012, were held back from full commercialization until approved in “major markets,” the council said, in keeping with the council’s market access policy.

Council members “voluntarily follow the policy to ensure new innovation does not create trade barriers in Canada’s top canola markets.”

“Seed developers invest hundreds of millions of dollars developing a new trait, but they understand the importance of commercializing seed technology responsibly,” Everson said in a council release. “They know it’s in everyone’s best interests to keep an eye on the long game, and not just short-term opportunities.”

The council noted a “significant milestone” in the traits’ approval came in November in Beijing, when “timely approval of biotech products” was one of the commitments made by Canada and China during the Economic and Financial Strategic Dialogue, an event co-chaired by federal Finance Minister Bill Morneau and International Trade Diversification Minister Jim Carr.

Reuters noted Tuesday the new approvals were granted while a U.S. trade delegation met with Chinese counterparts this week.

The news service quoted an unnamed China representative of a U.S. agricultural industry association describing the approvals as “a goodwill gesture towards the resolution of the trade issue” between the U.S. and China.

Bayer, for one, said Tuesday it’s “encouraged that fundamental improvements in the regulatory process in China remain an important focus in ongoing negotiations with governments that have significant exports to China.”

While the Chinese ag ministry has publicly posted information regarding the new approvals on its website, Bayer said Tuesday it’s “awaiting final documentation, which we expect to receive shortly.”

“After five years of waiting to introduce (TruFlex) to Canadian and U.S. farmers we are thrilled to move forward with commercialization in 2019,” Jon Riley, trait launch lead with Bayer, said Tuesday in a release.

Stewarded plot trials and field demonstrations of TruFlex ran at several locations across Western Canada last summer, the company said, noting it expects TruFlex canola to be seeded on about a million acres in its first season.

Bayer said Tuesday it plans to offer TruFlex in its Dekalb seed brand and via other Canadian licensees such as Nutrien Ag Solutions and Canterra.

Monsanto, which had developed TruFlex before its takeover by Bayer in June, said last spring that TruFlex is to become the company’s new base trait for canola.

The TruFlex trait allows canola growers the option to apply the company’s Roundup WeatherMax glyphosate herbicide in-crop at a rate of 1.33 litres per acre for a single application, or 0.67 litres/acre for two applications, controlling 24 new weed species.

That’s compared to the maximum permitted rate of 0.5 litres/acre for a single application or 0.33 litres/acre for split applications with the company’s current Genuity Roundup Ready canola lines. — Glacier FarmMedia Network

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California-based American Vanguard Corp., the owner of ag chemical producer Amvac Chemical, announced Thursday it has bought the quizalofop-p-ethyl (QPE) product line of herbicides from DowDuPont’s ag division, Corteva Agriscience, for an undisclosed sum.

A Group 1 member of the “-fop” family of aryloxyphenoxy propionate herbicides, Corteva’s QPE herbicide is so far  marketed mainly to canola, soybean and pulse growers in the U.S. and Canada, Amvac said.

Corteva’s QPE brand Assure II, which came to the company from DuPont, is approved in Canada for post-emergent use against grassy weeds, volunteer cereals and volunteer corn in crops including canola, soybeans, flax, industrial hemp, sugar beets and faba beans, among others.

In Western Canada, QPE is also approved for use in chickpea and mustard crops; it’s also cleared for use in rutabagas in Ontario and Quebec and for lima beans, adzuki beans and mung beans in southern Ontario.

QPE’s emerging value, however, is seen to be in DowDuPont’s Enlist corn production system, which Dow launched for corn growers in the U.S. and Canada starting in the 2018 growing season.

The Enlist trait offers herbicide tolerance to 2,4-D and to fops such as quizalofop and fluazifop (best known as the active ingredient in Syngenta’s Venture L). Enlist corn hybrids are also stacked with a separate glyphosate tolerance trait.

The deal with Corteva also gives Amvac a license to market QPE for use alone or with Enlist herbicides in Enlist corn, which American Vanguard CEO Eric Wintemute described as “a segment that is forecast to grow considerably in coming years.”

Generally, he said, the QPE line “provides our crop protection business with a portfolio of valuable herbicide brands that hold significant leadership positions in the North American market.”

The QPE products, he added, “have a well-established market position, are solidly profitable and offer the promise of growth as the Enlist trait technology expands.”

Amvac, he said, “will continue multiple existing supply agreements for these products and incorporate the sales and marketing of these brands into our expanding portfolio of herbicide offerings.”

Amvac’s deal with Corteva gives it the QPE line’s technical registrations and commercial sales information, and the transfer of existing product supply arrangements.

Amvac in recent years has expanded its chemical portfolio through acquisitions such as Bayer’s bromacil (Hyvar, Krovar) herbicide lines in the U.S. and Canada in 2018, as well as Adama’s U.S. abamectin, chlorothalonil and paraquat businesses in 2017.

Corteva is expected to spin off from DowDuPont as a “pure play” ag company in June this year, as per the plan laid out by Dow Chemical and DuPont following their merger as DowDuPont in August 2017. –– Glacier FarmMedia Network

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The world’s largest chemicals producer, formed last year through the $130 billion merger of Dow Chemical and DuPont, also said it would buy back $3 billion in shares over the next five months.

DowDuPont’s shares rose 4.4 percent to $56.30 in premarket trading.

An intensifying trade dispute between China and the United States has weighed on the farm sector, especially after Beijing slapped a 25 percent tariff this year on U.S. soybeans, the most valuable American farm export to China.

DowDuPont said last month its agricultural unit, which produces seeds and pesticides, recorded a non-cash charge of $4.6 billion, as seed makers face shifts in demand as a result of trade tariffs.

China, the world’s top soybeans importer, has scaled back purchases of U.S. soy and is instead buying from Brazil.

The shift has prompted Brazilian farmers to plant more soybeans, instead of corn. Some U.S. farmers may make the opposite choice in the spring.

The tariff row could hurt DowDuPont’s U.S. agricultural business next year because of higher soybean production in Latin America, Chief Financial Officer Howard Ungerleider said in an interview.

Still, Ungerleider suggested the impact may not be immediate. “We don’t see any material impact from the (trade) tariffs on our businesses in the fourth quarter,” he said.

DowDuPont’s overall net sales rose 10 percent to $20.1 billion in the third quarter ended September.

Sales at its materials science business, which produces chemicals used in cosmetics, packaging material, paints and brake fluids, rose 13 percent to $12.4 billion. The unit is DowDuPont’s top revenue contributor.

Agricultural unit sales rose 2 percent to $1.91 billion.

Selling, general and administrative costs ballooned almost 50 percent to $1.5 billion.

Adjusted earnings jumped 35 percent to 74 cents per share, above analysts’ average estimate of 71 cents, according to Refinitiv data.

DowDuPont, which is in the process of splitting itself up into three companies, said the separation was on track. The materials science division, to be called Dow, should separate by April 1, the company said.

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Shares of the company fell 3 percent to $66.11 in morning trade and were the biggest drag on the S&P 500 index at 1500 GMT.

“We see some discrete headwinds, most notably currency fluctuations, particularly in agriculture, and higher raw materials costs in all three divisions,” Chief Financial Officer Howard Ungerleider said.

Dow and DuPont completed their $130 billion merger last September to form DowDuPont. It will create three separately traded companies next year, splitting into companies that look at agriculture, plastics and specialty products.

On a conference call with analysts, CEO Ed Breen said trade tensions have increased volatility in agricultural commodity prices.

“U.S. soybean exports that normally go to China are simply being shifted to other countries.”

Last month, Washington imposed tariffs on $34 billion of Chinese imports. In return, China levied taxes on the same value of products from the United States, including soybeans and sorghum. Traders rushed shipments of U.S. soy to China before the tariff took effect on July 6.

However, the company, which has global operations and often sources materials locally, does not expect any tariff-related impact on overall business this year.

Total sales from the company’s biggest revenue generator, the materials science business which makes chemicals used in cosmetics, packaging material, and brake fluids, rose 18 percent to $12.6 billion for the second quarter.

Sales from its agricultural business rose 25 percent to $5.7 billion. Cold weather in the northern hemisphere moved demand for the company’s seeds from April to May.

The agriculture unit, a weak spot in earlier quarters, has struggled due to an industry wide grains glut that led to slowing demand.

The company said overall prices rose 4 percent in the quarter, including a 5 percent increase in materials science business and a 4 percent price rise in agriculture.

Net sales rose 17 percent to $24.2 billion, which the company said compares with net sales of $20.7 billion that DowDuPont would have made had it been one company in the same quarter a year earlier.

Adjusted earnings came in at $1.37 per share, above analysts expectations of $1.30 per share, according to Thomson Reuters I/B/E/S.

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But the other processed canola product, meal, takes a backseat to U.S. soymeal to feed certain livestock, due to a reduced protein level.

Seed developer DowDuPont hopes to change that as early as next year.

DowDuPont is in late development stages of a canola variety with higher protein content rivaling that of soybeans, which dominate the pig feed market. DowDuPont aims to start selling ProPound canola as early as 2019, said Dave Dzisiak, North America commercial leader for grains and oilseeds at the company.

“The food industry really wants more options,” Dzisiak said in an interview. “Canola could create a whole new opportunity.”

DowDuPont’s move comes as other agriculture majors, such as Cargill and Archer Daniels Midland, are turning to peas as a fast-expanding protein source.

ProPound canola meal will primarily target pig and poultry farms in Canada, the U.S. and China, as well as fish farms.

Soybeans currently have the edge on canola because soymeal, separated from the beans, contains more protein than canola meal. But DowDuPont’s ProPound would narrow that gap, producing canola meal with 44 per cent protein, and less fibre, from canola’s typical level of 37 per cent. Soymeal has 47 per cent protein.

Developing high-protein canola has long been possible for plant breeders, but only at the expense of canola’s yield, or the amount of valuable oil in each seed. The breakthrough represented in ProPound has been ratcheting up protein levels without diminishing the same plant’s yield or oil content, Dzisiak said.

While most of Canada’s canola is grown from genetically modified seeds, the high-protein trait was achieved through years of incremental, traditional plant-breeding.

In a Saskatoon laboratory, DowDuPont’s work included marking canola genes from different strains to identify for breeders which plants contain desirable traits, and where in the genome they are located. With that information, breeders then select varieties of canola and cross them hundreds of times to come up with something new.

Canola meal typically sells for about 30 per cent less than soymeal, reflecting its lesser protein content, but achieving a comparable protein level may shrink that discount to 10 per cent, allowing canola meal exporters to reap greater profits while undercutting soymeal, Dzisiak said.

— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg.

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The newly-combined company, formed by the merger of chemical giants Dow Chemical and DuPont four months ago, said its net sales came in at $20.1 billion versus comparable net sales – which the company terms “proforma” sales – of $17.7 billion a year earlier (all figures US$).

It also said it planned to move ahead with plans to split the new company into three separate parts, starting with the Materials Science unit by the end of the first quarter of 2019. Agriculture and Specialty Products are expected to follow by June 1, 2019.

The chemicals giant saw prices rise by about five per cent across markets in the fourth quarter, while volumes — a proxy for demand — rose six per cent.

“In developed economies in particular, such as the United States, Germany, France, Canada and the U.K., we continue to see strong leading indicators of broad-based growth,” executive chairman Andrew Liveris said in the results statement.

“Furthermore, early signs from the business community point to U.S. tax reform as a catalyst for further domestic capital investments.”

Currently trading at a market value of about $176.9 billion, Dow and DuPont completed the $130 billion mega-merger in September. That created the world’s largest chemical maker, until the company goes through with a plan to split into three companies.

DowDuPont’s merger was welcomed by investors as a way to streamline the companies’ sprawling operations by combining overlapping businesses.

The company said on Thursday it was now planning to save $3.3 billion in costs on the back of the merger — slightly more than the $3 billion it expected to save earlier.

For the reported quarter DowDuPont saw a $1.1 billion benefit from lower U.S corporate taxes, but still posted a net loss of $1.2 billion from continuing operations — substantially the result of merger-related costs.

Adjusted for those and other one time effects, the company said it earned 83 cents on a share. Ahead of the numbers Wall Street was expecting it to make 67 cents a share, according to Thomson Reuters I/B/E/S numbers.

Shares of the company dipped to $75 in premarket trading on Thursday compared to the previous close of $75.58.

— Reporting for Reuters by Nivedita Bhattacharjee.

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A federal court in Mexico City rejected the suit by PHI Mexico, a unit of U.S. chemical maker DowDuPont’s company Pioneer, because it found it was not authorized to rule on the matter, said the lawyer, Rene Sanchez.

“So it leaves things as they are until the (Supreme) court decides whether to study it or rule on it,” Sanchez said.

Mexico currently permits cultivation of genetically-modified corn for scientific ends in areas of up to one hectare (2.5 acres) and non-commercial pilot schemes in areas of up to 10 hectares under judicial supervision. Commercial cultivation is prohibited.

The curbs on transgenic corn are part of a suit brought in 2013 by a group known as the Colectividad del Maiz composed of farmers, scientists, environmentalists and others.

The court could not immediately be reached for comment. In such cases, the rulings are typically not public and the findings only made known to the affected parties.

— Reporting for Reuters by Adriana Barrera.

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