The Dow Chemical Company DOW announced that its fully-owned subsidiary Dow AgroSciences has entered into a research and development (R&D) joint venture with Radiant Genomics, Inc. in order to develop natural crop protection products. The alliance will bring together Radiant Genomics’ patent metagenomic and engineering-biology technologies and Dow’s product development capabilities, resulting in novel natural products.
Dow is a global leader is manufacturing and commercializing natural and semi-synthetic products which are used in crop protection. Some of Dow’s market-leading naturally created insecticides are Entrust SC Naturalyte Insect Control, Conserve SC speciality insecticide, Radiant SC, Delegate WG and many more. These products fall under spinosad and spinetoram − two active ingredients in the spinosyns family used for controlling insects in many crops around the world.
Dow’s expertise when combined Radiant Genomics’ technical knowledge will further strengthen the former’s industry-recognized natural and sustainable products discovery program. Moreover, Radiant Genomics’ technologies will help accelerate Dow’s product generation and optimization process bringing crop protection products faster to the market.
Both the companies look forward to helping each other and attaining a new market platform from the collaboration as stated by the higher authorities of the companies.
Dow is expected to continue to gain from its productivity and growth strategies as well as its aggressive cost-reduction initiatives. The company also has been selectively divesting its underperforming assets which are exposed to raw material price swings. Most recently, the company announced that it would divest a considerable portion of its chlorine value chain and merge that with Olin Corp. OLN in a deal valued at about $5 billion.
The cost synergies from the deal will include network optimization and enable both Dow and Olin to expand their presence in additional places, catering to more customers. With this transaction, Dow will exceed its target of divesting $7 billion to $8.5 billion of non-strategic businesses and assets. This will enable the company to continue focusing on reducing debt and invest in future growth of its high priority and high margin businesses.
Dow currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the diversified chemical space include Asahi Kasei Corp. AHKSY and Innospec Inc. IOSP. Both Asahi Kasei and Innospec sport a Zacks Rank #1 (Strong Buy).
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