Dow Chemical Company’s (DOW) wholly owned subsidiary Dow AgroSciences entered into a strategic agreement with The Royal Barenbrug Group for developing and commercializing advanced germplasm in forage seeds. The two companies have a common goal of achieving growth in forage grasses. The financial terms of the transaction remained undisclosed.
As per the agreement, Dow AgroSciences will be a minority shareholder in Barenbrug Holding B.V., which is a part of The Royal Barenbrug Group. Further, Dow’’s subsidiary will provide Barenbrug access to select hybrid Brachiaria germplasm. On the other hand, Barenbrug will build a new facility in Brazil, where cleaning, coating and packaging will be done to process hybrid Brachiaria along with producing other tropical grasses and legumes.
With the partnership, Dow AgroSciences will be able to expand its seed portfolio into forage grass seed. Meanwhile, it will help Barenbrug to access latest technologies and germplasm.
Michigan-based Dow is a leading chemical company, whose products are used across a broad spectrum of industries. The company posted earnings of 61 cents a share (excluding specific one-time items) in the first quarter of 2012, surpassing the Zacks Consensus Estimate of 59 cents. However, it was below the year-ago adjusted earnings of 82 cents.
Revenues dropped marginally year over year to $14,719 million, lagging behind the Zacks Consensus Estimate of $15,342 million. Double-digit growth across agricultural and feedstock/energy businesses were masked by declines in performance materials and performance plastics franchises during the quarter.
The Agricultural Sciences segment posted sales of $1.8 billion in the quarter, up 14% year over year. Moreover, volumes and price rose 12% and 2%, respectively. The gains were broad-based across products and geographic areas, driven by customer adoption of new products, healthy agricultural market fundamentals, and an early spring planting season in North America.
Dow faces stiff competition from EI DuPont de Nemours & Co. (DD). Currently, the stock retains a Zacks #3 Rank, indicating a short-term “Hold” rating. Moreover, we have a long-term “Neutral” recommendation on the company.Read the Full Research Report on DD
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