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E I Du Pont De Nemours And Co : DuPont Pioneer Head Sees Growth in African Grain Industry

02/22/2013 | 04:58pm US/Eastern
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--Head of DuPont's seed business "very bullish" on African growth

--Purchase of biggest South African seed company has cleared regulatory hurdles

--Says USDA corn, acreage projections in line with sales trends

By Ian Berry

CHICAGO--Africa's farmers have the potential to emulate their South American counterparts and become a global powerhouse in agriculture, a senior executive at DuPont Co. (DD) said Friday.

Big agribusiness companies such as DuPont--one of the world's largest seed makers--have been developing African resources and infrastructure, especially in the corn belt that stretches from Ethiopia to South Africa along the continent's eastern seaboard.

"I'm very bullish on Africa," said Paul Schickler, president of DuPont Pioneer, the company's seed business, adding there still need to be further strides in creating the physical and legal infrastructure, such as efficient grain storage and trading rules.

Mr. Schickler formerly headed Pioneer's South American business and watched the region's transformation over the past 20 years into one of the world's "breadbaskets," with Brazil poised to overtake the U.S. as the world's biggest exporter of soybeans.

"I think it can be," he said when asked in an interview whether Africa can play a similar role.

DuPont's acquisition of the biggest seed company in South Africa doubles its footprint in sub-Saharan Africa, he said. The deal to acquire Pannar Ltd., which was announced in 2010 but held up for more than two years amid local controversy, has cleared all regulatory challenges, Mr. Schickler said. He said the company is now planning on "the best timing" to assume majority ownership, and plans to build a new research and technology center in South Africa.

Mr. Schickler cautioned that the need to improve infrastructure and focus on regional food needs would make it a long time before Africa might become a significant exporter.

"The first challenge is producing the food they need for their own use," he said. "That's a 20-year journey by itself."

While Africa remains a long-term commitment, Pioneer sees sales growth from other non-U.S. markets accelerating over the next five years to around 40% of total expansion.

Mr. Schickler also said that 2013 planted acreage projections for corn and soybeans released Friday by the U.S. Department of Agriculture were in line with its own sales trends, but that its yield outlook for corn was a surprise.

The USDA projected a record-breaking crop of 14.53 billion bushels this year, with an average yield of 163.6 bushels per acre, up 40.2 bushels from last year's drought-plagued crop.

The USDA's projection that yields would rebound from last year's drought and resume trend-line increases "has a whole set of assumptions associated with it," he said, ranging from a timely planting season to seasonal temperatures during the crop's reproductive phase.

Write to Ian Berry at ian.berry@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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