Iowa lost in its bid to secure the agricultural headquarters following the merger between DuPont and Dow Chemical, the culmination of a months-long push to retain a business synonymous with the state's dominant role in U.S. agriculture.
The chemical giants announced Friday that the corporate headquarters for the agriculture company will be located in Wilmington, Del., where the 214-year old DuPont is currently located. Delaware's largest city would house the agriculture business' chief executive and other key corporate support positions. The agricultural operations will retain a strong presence in Johnston, Iowa, where DuPont Pioneer is located, as well as Indianapolis, Ind., which is home to Dow Agrosciences, part of Dow Chemical.
Despite the blow of losing out on the headquarters, a DuPont executive pledged that the new agriculture unit will be a "positive" for Iowa and not result in any job cuts tied to the announcement. Johnston and Indianapolis will both maintain robust research and development, sales and marketing teams, and business support functions, among other capabilities. Dow and DuPont, which are expected to complete their $130 billion merger later this year, plan to then split into three separate companies within two years — agriculture, material sciences and specialty products.
"There will be some disappointment" in not getting the headquarters, Paul Schickler, president of DuPont Pioneer acknowledged in an interview. He said by keeping a presence in Iowa, “it’s really a celebration and preservation of those roots as we position ourselves for the future. Similar to 90 years when we started (Pioneer), we were at the birth of an agricultural company and we're able to utilize the same attributes that Henry A. Wallace used to grow into the future.”
Schickler said the new Dow-DuPont agriculture unit "is a great opportunity for Des Moines." By keeping a local presence, the company will be able it to tap into the area's rich background of science, innovation and close relationship with Iowa's farmers, many of whom who are customers of the hometown Pioneer.
As the world's population demands more and healthier food going forward, the result of a growing population, burgeoning middle class and improved dietary and nutritional standards, he pronounced that there is "no doubt about it, growth is going to be in front of this agricultural company."
The Iowa Economic Development Authority moved ahead with plans Friday to offer the new company $16 million in incentives. The board's due diligence committee approved a $2 million forgivable loan and up to $14 million in research activities tax credits. The full board will likely approve the measure later Friday morning.
The tax credits apply for the 250 to 500 research and development jobs the company expects to retain in Johnston, though it must keep 500 positions to cash in on the full incentive package from the state. Company officials said they currently employ 2,634 in Johnston.
The city of Johnston is expected to vote on its own $1 million incentive package at a specially called meeting Friday afternoon.
The new agriculture company would create the nation’s largest agricultural business, surpassing Monsanto Co., which is currently the world’s largest seed operation. The ag business would be worth nearly $20 billion, based on the units’ combined 2014 revenue.
Pioneer, purchased by DuPont in 1999, has been an important Iowa company since Henry A. Wallace founded it in 1926. DuPont Pioneer employs about 3,400 workers in Iowa, mostly in Johnston, and has been an important cog in the Iowa economy and symbolic of the state’s dominant position as a major U.S. producer of corn, soybeans, ethanol and other commodities.
While Dow and DuPont contemplated the location of the ag headquarters, lawmakers in Iowa and Indiana mounted a full on press to boost their odds, with Gov. Terry Branstad, Sen. Chuck Grassley and others talking with executives of both companies. In a letter last month to DuPont CEO Ed Breen and Dow CEO Andrew Liveris, Iowa’s six lawmakers in Washington touted Iowa’s role in agriculture, the World Food Prize and local universities among the reasons they should pick Iowa.
The seed and chemical industry has been undergoing a broad wave of consolidation amid a backdrop of a slumping agricultural economy that has squeezed farm income and forced producers to cut back on seed, fertilizer, equipment and other inputs for their operations.
Farmers and ranchers are expected to see income fall 3 percent to $54.8 billion in 2016, the Agriculture Department said last week. That would drop net farm income to its lowest level since 2002, tumbling 56 percent from its recent high of $123.3 billion just three years ago, when tight supplies and strong global demand for commodities led to record profits.
Faced with falling revenues and growing pressure to cut costs while finding the next big breakthrough, agribusiness companies such as Dow and DuPont have looked to mergers as a way to save money and spur innovation. Earlier this month, government-owned China National Chemical Corp. announced it was buying seed and pesticide maker Syngenta AG for $43 billion, a deal that came about five months after Monsanto dropped its own bid to take over the Swiss-based company.
http://www.press-citizen.com/story/...oses-ag-headquarters-new-dow-dupont/80561874/
The chemical giants announced Friday that the corporate headquarters for the agriculture company will be located in Wilmington, Del., where the 214-year old DuPont is currently located. Delaware's largest city would house the agriculture business' chief executive and other key corporate support positions. The agricultural operations will retain a strong presence in Johnston, Iowa, where DuPont Pioneer is located, as well as Indianapolis, Ind., which is home to Dow Agrosciences, part of Dow Chemical.
Despite the blow of losing out on the headquarters, a DuPont executive pledged that the new agriculture unit will be a "positive" for Iowa and not result in any job cuts tied to the announcement. Johnston and Indianapolis will both maintain robust research and development, sales and marketing teams, and business support functions, among other capabilities. Dow and DuPont, which are expected to complete their $130 billion merger later this year, plan to then split into three separate companies within two years — agriculture, material sciences and specialty products.
"There will be some disappointment" in not getting the headquarters, Paul Schickler, president of DuPont Pioneer acknowledged in an interview. He said by keeping a presence in Iowa, “it’s really a celebration and preservation of those roots as we position ourselves for the future. Similar to 90 years when we started (Pioneer), we were at the birth of an agricultural company and we're able to utilize the same attributes that Henry A. Wallace used to grow into the future.”
Schickler said the new Dow-DuPont agriculture unit "is a great opportunity for Des Moines." By keeping a local presence, the company will be able it to tap into the area's rich background of science, innovation and close relationship with Iowa's farmers, many of whom who are customers of the hometown Pioneer.
As the world's population demands more and healthier food going forward, the result of a growing population, burgeoning middle class and improved dietary and nutritional standards, he pronounced that there is "no doubt about it, growth is going to be in front of this agricultural company."
The Iowa Economic Development Authority moved ahead with plans Friday to offer the new company $16 million in incentives. The board's due diligence committee approved a $2 million forgivable loan and up to $14 million in research activities tax credits. The full board will likely approve the measure later Friday morning.
The tax credits apply for the 250 to 500 research and development jobs the company expects to retain in Johnston, though it must keep 500 positions to cash in on the full incentive package from the state. Company officials said they currently employ 2,634 in Johnston.
The city of Johnston is expected to vote on its own $1 million incentive package at a specially called meeting Friday afternoon.
The new agriculture company would create the nation’s largest agricultural business, surpassing Monsanto Co., which is currently the world’s largest seed operation. The ag business would be worth nearly $20 billion, based on the units’ combined 2014 revenue.
Pioneer, purchased by DuPont in 1999, has been an important Iowa company since Henry A. Wallace founded it in 1926. DuPont Pioneer employs about 3,400 workers in Iowa, mostly in Johnston, and has been an important cog in the Iowa economy and symbolic of the state’s dominant position as a major U.S. producer of corn, soybeans, ethanol and other commodities.
While Dow and DuPont contemplated the location of the ag headquarters, lawmakers in Iowa and Indiana mounted a full on press to boost their odds, with Gov. Terry Branstad, Sen. Chuck Grassley and others talking with executives of both companies. In a letter last month to DuPont CEO Ed Breen and Dow CEO Andrew Liveris, Iowa’s six lawmakers in Washington touted Iowa’s role in agriculture, the World Food Prize and local universities among the reasons they should pick Iowa.
The seed and chemical industry has been undergoing a broad wave of consolidation amid a backdrop of a slumping agricultural economy that has squeezed farm income and forced producers to cut back on seed, fertilizer, equipment and other inputs for their operations.
Farmers and ranchers are expected to see income fall 3 percent to $54.8 billion in 2016, the Agriculture Department said last week. That would drop net farm income to its lowest level since 2002, tumbling 56 percent from its recent high of $123.3 billion just three years ago, when tight supplies and strong global demand for commodities led to record profits.
Faced with falling revenues and growing pressure to cut costs while finding the next big breakthrough, agribusiness companies such as Dow and DuPont have looked to mergers as a way to save money and spur innovation. Earlier this month, government-owned China National Chemical Corp. announced it was buying seed and pesticide maker Syngenta AG for $43 billion, a deal that came about five months after Monsanto dropped its own bid to take over the Swiss-based company.
http://www.press-citizen.com/story/...oses-ag-headquarters-new-dow-dupont/80561874/
