By Carey Gillam
(Reuters) - DuPont (N:DD) is buying a California-based microbiome discovery company for development of biological crop products, a move that the chemical and crop company hopes will give it an edge in an emerging agricultural market.
DuPont's announcement on Wednesday did not disclose how much it is paying for Taxon Biosciences Inc, but said the 15-year-old company brings a "broad intellectual property estate" that will contribute to new DuPont seed treatments, and foliar and soil applications for row crops, fruits and vegetables.
The company said it will start testing biological discovery leads identified by Tiburon, Calif-based Taxon this year. The deal is expected to close in the second quarter.
DuPont executive vice president Jim Borel said in an interview that he expects new products in the company's biologicals pipeline to start hitting the market within about five years. Borel said the biologicals market is growing rapidly "and it's an area where science can make a real difference."
DuPont expects demand in Europe, North America and Latin America, Borel said.
Wilmington, Delaware-based DuPont's move is the latest in a string of acquisitions and expansions by the world's largest agrichemical companies to harness microbes, plant extracts and other natural substances to try to better control pests and improve plant health, quality and yield.
They have long been the subject of exploration and analyses by scientists, both for use in human and plant health. New technologies have sped up the process.
Rival Monsanto Co. (N:MON) this year has 500,000 test plots on farms across the Midwest this spring, analyzing microbial strains. Bayer AG (DE:BAYGn), Syngenta AG (VX:SYNN) and a roster of other companies in the agricultural seed and chemicals business are also racing to roll out new biological products for plants.
Experts peg the market at roughly $2 billion today with an expected growth rate of 10 to 15 percent.
DuPont's purchase of Taxon is aimed at boosting its reach into biological products for agriculture, but the company already has business units developing such things as probiotics for human health, enzymes and proteins for industrial applications and animal feed, and inoculants for agriculture.
DuPont reaped more than $1 billion in biologicals sales last year.
Industry leaders have said biological-based product offerings have the potential to dramatically increase the number of bushels farmers coax from their crops. Future improvements are forecast not just for corn and beans, but wheat, canola, cotton and fruits and vegetables.
The move coincides with concerns from consumers and environmentalists, and increased regulatory rigor, over the effectiveness and efficiency of some genetically engineered crops and agricultural chemicals that many U.S. farmers rely on. The more natural biological solutions face fewer concerns and regulatory hurdles, according to agricultural experts.
Borel said that while new biological products for crops could reduce demand for some existing agrichemicals, others would be complementary.
"This is giving farmers more options," Borel said.
Some companies are working on offerings that are sprayed on seeds to wash off into the soil and protect the crop from pests, reducing the need for insecticide applications. Others say they are building microbial applications that will make crops grow better with less water or less fertilizer.