Dow Chemical’s DOW fully-owned unit, Dow AgroSciences LLC, has partnered Arcadia Biosciences, Inc. RKDA to jointly develop and market new corn yield traits and trait stacks. Financial terms of the collaboration agreement were not disclosed.
Under the deal, the companies will develop and market agronomic yield traits including those that have already completed advanced field trials in corn conducted by Dow AgroSciences. These traits will be integrated with Dow AgroSciences’ input traits to make highly competitive trait stacks that boost revenues and efficiency of growers.
The partnership will leverage Dow AgroSciences’ enabling technology platforms, input traits, regulatory capabilities and commercial channels and Arcadia’s leading platform of abiotic stress traits. Moreover, it will use Dow AgroSciences’ EXZACT precision technology platform to expedite the development of trait stacks. Dow AgroSciences has developed the EXZACT platform under an exclusive license and collaboration deal with Sangamo BioSciences, Inc.
Dow AgroSciences and Arcadia will share certain development costs under the agreement. They will also share the commercial value of resulting traits.
Indiana-based Dow AgroSciences, which raked in global sales of $7.3 billion last year, is a leading provider of crop protection and plant biotechnology solutions. It has a strong position in corn input traits.
Currency headwinds, weak commodity prices and subdued demand in Latin America are affecting Dow’s agriculture business. Conditions remain particularly weak in Brazil. Sales from Dow’s Agricultural Sciences segment fell roughly 14% year over year in third-quarter 2015, hit by lower commodity prices and currency impact. Crop protection revenues declined on unfavorable currency and price impacts and weak volumes in Latin America.
Nevertheless, Dow should continue to gain from its growth actions, productivity improvement and aggressive portfolio management initiatives. A string of innovative products in its pipeline also adds to its strength. The company should also benefit from its strategic investments in attractive regions through highly-accretive projects including the expansions in the U.S. Gulf Coast and Sadara joint venture in the Middle East.
Dow currently holds a Zacks Rank #2 (Buy).
Other companies in the chemicals space worth considering include Celanese Corporation CE and Innospec Inc. IOSP, both sporting a Zacks Rank #1 (Strong Buy).
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