Dow AgroSciences to invest $340M, add nearly 600 jobs in next 5 years

Mar 5, 2010 — The Indianapolis Star

John Russell

Mar. 5, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- In a move that is certain to boost Indiana's reputation as a life-sciences hub, Dow AgroSciences will add nearly 600 jobs to its Northwestside campus in hopes of dramatically expanding its worldwide competitiveness in farm chemicals and biotech crops.

The move will boost Dow AgroSciences' local work force by nearly 50 percent, to about 1,800 people, representing a huge spurt for the company that started 21 years ago as a joint venture between Eli Lilly and Co.'s (NYSE:LLY) Elanco plant products division and Dow's agricultural products division.

Dow says it wants its agriculture business to grab a larger share of the world's $50 billion seeds and agricultural chemicals market. Dow AgroSciences is now a midsize player, with annual sales of about $4.5 billion. But it wants to push harder.

The goal is to help farmers grow better crops, while managing weeds and bugs. Farmers want to get more out of every acre and are willing to pay higher prices for more productive seeds and hardier strains.

The technology represents one of the hottest parts of the life-sciences sector, as farmers feel increasingly under pressure to turn out more food from a shrinking amount of farmland. The company's scientists and engineers study new ways to develop bigger tomatoes, drought-resistant corn and more productive dairy herds for farmers trying to increase their yields.

"We are looking for the best people around the world to help us meet this challenge of growing more food," said Antonio Galindez, president and chief executive of Dow AgroSciences.

The move also represents a major capital investment in Central Indiana's life-sciences sector, which has been working hard to establish itself as a player on par with Boston, San Diego and other high-tech hotbeds. Dow AgroSciences plans to build a research and development center and a greenhouse as part of a $340 million upgrade on the Zionsville Road campus.

The investment and the promise of so many new jobs also seem to end discussion of whether parent company Dow Chemical Co. (NYSE:DOW) , which bought out its partner, Lilly, in 1997, might sell the operation. Last year, Dow Chemical said it was entertaining offers on its agricultural division as a way to pay off its huge debt.

Now, Dow is staking a big claim in Indianapolis, which serves as the headquarters of its worldwide AgroSciences operation.

"Clearly, Dow has made a major, major commitment to this facility in Indiana," said Gov. Mitch Daniels, who attended an announcement ceremony Thursday at the company's campus. "This is going to be here for years to come."

Dow is ramping up its investment as many other large companies are laying off thousands of workers and trying to shore up their businesses. Dow said it plans to add up to 577 jobs here over the next five years.

"This is a significant number at a time a lot of companies, inside and outside of life sciences, are going the other way," said David Johnson, president of BioCrossroads, a private group that promotes new life-sciences companies in Indiana.

Mayor Greg Ballard said Dow's expansion could have an "enormous multiplier effect," involving construction jobs, business services and industry vendors.

Dow's expansion also could ripple across Central Indiana in significant ways, from more supplier business to more scientific expertise that could help other technology companies get started, said Jean Wojtowicz, president of Cambridge Capital Management, which has helped fund and develop more than 1,000 small Indiana companies.

"Any time you have that kind of investment, especially with these high-paying jobs, it's extremely important for the community as a whole," she said. "These companies attract very bright people who often become advisers and investors in other early-stage companies."

Dow's new scientific and commercial positions will pay up to $90,000 a year.

Keeping up with technology

Around the world, major agricultural companies such as Monsanto Co. (NYSE:MON) and DuPont (NYSE:DD PRB) (NYSE:DD PRA) (NYSE:DD) Co. are racing to develop new technologies to help farmers increase their yields. The science of agriculture is getting more complex, driven by advances in genetics and biotechnology.

Dow AgroSciences, for example, has been studying a technology called the zinc finger, naturally occurring proteins that bind to DNA and can help alter or regulate the genetic makeup of a plant. The gene, scientists think, can help make healthier, stronger vegetables and juicier fruits that last longer.

Dow AgroSciences, best known for its lineup of pesticides and herbicides, is the world's fifth-biggest seed producer, behind Monsanto, DuPont, Syngenta AG (NYSE:SYT) and Bayer AG. (NYSE:BAY) In farm chemicals, it is the sixth-biggest player.

"Dow is trying to stay competitive with all those other companies, and I think it's fair to say they've been challenged by those companies over the years," said Joe Panetta, a former Dow AgroSciences global leader of government affairs, who is now chief executive of Biocom, an industry group in San Diego. "To stay competitive, Dow has to make a significant increase in its investment."

But the company is pushing to get bigger, chiefly by developing new technologies. Last month, Dow said it would launch five new products by 2012, marking one of the most aggressive product rollouts in recent years.

The company also has told analysts it expects more than $800 million of its sales will come from new products by 2013. They include Sulfoxaflor, an insecticide set for launch in 2012.

The company's climate-controlled greenhouses simulate weather conditions around the world and can grow plants year-round.

Now, newer facilities could help the company make a bigger leap. The first phase in the expansion includes the construction of a 175,000-square-foot research and development building and a 14,000-square-foot greenhouse.

The newer facilities could help the company more quickly decide which technologies have the most promise. Dow AgroSciences researchers examine thousands of molecules, proteins and genes each year in the process of launching a handful of new products. It takes about 10 years and hundreds of millions of dollars to develop an agricultural chemical product.

The Indiana Economic Development Corp. offered Dow AgroSciences up to $12.5 million in performance-based tax credits and $205,000 in training grants. In addition, the IEDC will provide the city with up to $5,000 to help with road, sewer and water improvements.

The expansion represents just the latest move for Dow AgroSciences, which has been growing steadily for years.

Last summer, the company said it signed a 15-year lease with Indianapolis-based Browning for an 80,000-square-foot building to be built on the Browning campus, adjacent to Dow AgroSciences' headquarters. The company also recently set up some research operations near Purdue University.

Newstex ID: KRTB-0095-42628857