Dow AgroSciences LLC, a subsidiary of
The Dow Chemical Company
) have entered into an agreement to create next generation of
advanced weed and insect control technology in corn. The
financial terms of the deal were undisclosed.
Dow AgroSciences will license Monsanto's Corn Rootworm III, a
third-generation corn rootworm technology that controls the
root-eating worms. On the other hand, Monsanto will license the
use of Dow AgroSciences' new Enlist Weed Control System
herbicide-tolerant trait in field corn. Monsanto will thus be the
first licensee of the Enlist trait in corn.
The agreement provides an opportunity for next generation
products to build upon the current SmartStax platform for
stacked-trait corn offerings. According to the companies, the
stacked trait products are important for combating pest
resistance and preserving trait durability. The technologies are
expected to be introduced in sold competitively by both companies
as next-generation weed and insect control products.
The agreement between Dow and Monsanto also enables the farmers
to attain yields despite wide-ranging pressures from damaging
pests. The farmers will also get an opportunity to bring
together, for the first time, three different modes of action for
below-ground insect control in a corn product. The farmers are
also faced with the problem of Weed resistance and Enlist
provides two modes of action for weed control to deliver
performance that farmers currently require.
According to both Dow and Monsanto, the agreement paves the way
for the U.S. introduction (pending regulatory approvals) of new
next generation SmartStax products by the end of the decade.
Dow released its fourth-quarter 2012 results on Jan 31, 2013.
The company reported a wider loss of 61 cents a share in the
quarter compared with a loss of 2 cents in the fourth quarter of
2011, due to hefty restructuring and goodwill impairment charges.
Dow's adjusted earnings of 33 cents a share missed the
Zacks Consensus Estimate by a penny.
Weak end-market conditions and lower pricing affected sales in
the quarter. However, Dow's agricultural business was a bright
spot, with sales increasing at a double-digit rate. Dow is
benefiting from strong fundamentals in agriculture and food
markets and is leveraging its North American feedstock
Dow retains a short-term (1 to 3 months) Zacks Rank #3
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