Chemical giant EI DuPont de Nemours & Co. (DD) recently announced two important initiatives to support food security efforts. The company’s Chair of the Board and CEO, Ms. Ellen Kullman unveiled these initiatives at the Advancing Food and Nutrition Security at the 2012 G8 Summit.
Under these initiatives, the company will invest in excess of $3 million over the next three years for helping smallholder farmers in Ethiopia to achieve food security. Also, the company is sponsoring a novel Global Food Security Index which is being developed by the Economist Intelligence Unit (EIU). The aim of this index, to be published this summer, is to measure the food security drivers across 105 countries. The index will be made available to the public so as to enable governments, universities, NGOs and other stakeholders for preparing solutions on a local basis for food security.
DuPont’s initiatives are a result of its commitment towards developing its business in Africa and innovating tools for measuring food security. The company is intent on improving the productivity of smallholder farmers in Ethiopia, helping them produce nutritious food for their families and communities. It is also looking to enter into a strategic venture with the Ethiopian government and the Agriculture Transformation Agency for this cause.
DuPont currently operates in 35 countries in Sub-Saharan Africa, employing over 500 people. The company expects that its development moves will help generate above $1 billion in revenues in the next 10 years in the continent.
The Global Food Security Index will use various factors for measuring food security, 25 indicators in total, and will gauge vulnerabilities to food security from one country to another. The index is a part of the execution of the Millennium Development Goals and the L'Aquila Food Security Initiative for measuring the region wise achievement of investments made and also to develop future plans to gauge accurate food security drivers in a particular country.
We currently have a long-term Neutral recommendation on DuPont. The company, which competes with The Dow Chemical Company (DOW) and BASF SE (BASFY), maintains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) Hold rating.
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