Hoosier Ag Today by: Gary Truitt
When Dow and DuPont announced their plans to merge their two agricultural divisions into one major agricultural company, speculation began as to where the headquarters would be: Johnston, IA, or Indianapolis, IN. DuPont Pioneer is currently headquartered in Iowa while Dow AgroSciences is headquartered in Indianapolis. Friday Morning top officials of the soon to be merged entity announced that both Indiana and Iowa will be home to the major parts of the newly created company. While the official headquarters will be designated in Wilmington, DE, the bulk of the new operation will be in Indiana and Iowa.
In a release Friday morning, it was stated that, “The corporate headquarters for the Agriculture company will be located in Wilmington, Delaware and will include the office of the CEO and key corporate support functions. Sites in Johnston, Iowa and Indianapolis, Indiana, will serve as Global Business Centers, with leadership of business lines, business support functions, R&D, global supply chain, and sales and marketing capabilities concentrated in the two Midwest locations. In addition, the independent Agriculture company will feature DuPont in the company’s name, following completion of the corporate naming and branding process.”
Indiana state officials are claiming this as a major victory for the Hoosier State and its agriculture sector. Ted McKinney, with the State department of Agriculture and the Indiana Economic Development Corporation, told HAT that, in the beginning, Indiana was not a top consideration, “This was a team effort between the state, the City of Indianapolis, and Purdue University.” McKinney added company officials were impressed with Indiana’s pro-agriculture philosophy and business-friendly tax structure. While details of the incentive package offered by Indiana have not been revealed, McKinney said they are “performance based” and will depend on the number of employees, programs, and projects the new company develops.
“Dow and DuPont have played integral roles in shaping the success of Indiana’s economy, and we are proud that Indiana will play a key role in their new future,” said Governor Mike Pence. “Hoosier farmers have driven innovation in agriculture that radiates throughout the state, advancing research, growth and job creation across industries like life sciences and technology. I’m grateful for the confidence that Dow and DuPont have placed in our people and for the collaboration with city officials that made this exciting announcement possible. With the announcement of this Global Business Center for the new DowDuPont, Hoosiers can be assured our state will continue to play a leading role in the future of this exciting new company.”
Hoosier Ag Today has learned from outside sources that the focus of the work to be done at the Dow AgroSciences facility on the NW side of Marion County will be primarily related to crop protection and seed trait research. Specialty seed research and development may also be done at the Indianapolis facility. The bulk of the corn, soybean, and other row crop agronomy work will remain at the Johnston, IA facility. The Indiana facility will be considered the World Business Center for crop protection and traits, while the Iowa facility will be considered the World Business Center for Seeds.
“We were impressed by the commitment put forth by the city and state and their focus on maintaining a hub of innovation in Indianapolis,” said Tim Hassinger, president and CEO of Dow AgroSciences. “We have a proud history of being part of this community for more than 26 years. Being a Global Business Center for the new Agriculture company maintains a strong focus on agricultural R&D innovation in Indiana and near our customers.”
While the new company has yet to be named, it is projected that the primary merger be ready for business by the fall of 2016, but the breakout of the agricultural divisions will not be ready until 2017, or perhaps as late as 2018. Company officials stress there are many duplicate positions and layers of management and, thus, considerable downsizing and reorganizing will take place. DuPont Pioneer has been announcing restructuring over the past few weeks, including the closing of all of their regional business units. The exact number of positions that will eventually be located at each facility is not yet known. Jonas Oxgaard, a senior chemicals analyst at Sanford C. Bernstein, said the ag headquarters will add about 100 new jobs to the location chosen by DowDuPont. McKinney said the growth will be long term. He sees significant growth and innovation in the next decade in the area of crop protection and seed traits, the areas that will be located in Indiana.
“This efficient structure takes full advantage of the unique expertise and resources that exist in each location, enabling us to deliver the long-term opportunity for the leading global Agriculture company we intend to create,” said Edward D. Breen, chairman and chief executive officer of DuPont. “Our deep presence in Iowa and Indiana will continue the close ties to our customer base and the broader Agriculture community, while leveraging the existing corporate infrastructure and expertise we have in Delaware – DuPont’s home for more than 200 years.” He added the structure of the Agriculture company was specifically developed to ensure the cost discipline and efficiency necessary to achieve the previously stated $1.3 billion in synergies, while establishing the strongest foundation possible for sustainable growth over the long term – which will in turn create long-term opportunities for the company’s global employee base and local communities.
Iowa was very aggressive and vocal in their pursuit of the company headquarters. “We’re treating this as if we’re recruiting a new company,” Tina Hoffman, a spokeswoman for Iowa’s economic development agency, told The Des Moines Register. “We’re competing at the highest levels.” Indiana took an aggressive but much lower key approach. Gov. Mike Pence and Indianapolis Mayor Joe Hogsett met with executives from Dow and DuPont in January, but declined to comment on the discussions or the state’s efforts to pursue the ag headquarters. McKinney said Indiana’s focus on bio-science innovation and the establishment of the AgriNovis group were factors in the decision to place the Global Business Centers, here.
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