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Transcript of DuPont Biotech Growth -...
Piper Jaffray Alternative Energy SymposiumFebruary 21, 2007
DuPont Biotech GrowthStrategy, Progress and Next Steps
© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
John Ranieri, VP&GMDuPont Bio-Based Materials
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Regulation GThe attached charts include company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the company and allows investors to better evaluate the financial results of the company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies.
This data should be read in conjunction with previously published company reports on forms 10-K, 10-Q and 8-K. These reports along with reconciliations of non-GAAP measures to GAAP are available on the investor center of www.dupont.com.
Forward-Looking StatementDuring the course of this presentation, I would like to remind you that we may make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as ‘expects,’ ‘anticipates,’ ‘plans,’ ‘intends,’ ‘projects’ and ‘indicates.’ Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions. We urge you to review DuPont's SEC filings, particularly its latest annual report on Form 10-K and quarterly reports on Form 10-Q, for a discussion of some of the factors which could cause actual results to differ materially.
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont Bio-Based Strategy
Target areas of unique advantage
Shape the industry with integrated knowledge base
Partnerships to maximize value capture
Market drives value propositions
Focus on transformative opportunities:
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Biotech Growth - Building A Strong Portfolio
Enabling Technology, IP, and Commercialization Paths in All Four Areas
Mar
ket s
ize
Value in Use/Unit
Energy
Materials
Surfaces
Medical
• Biobutanol - BP• Cellulosic Ethanol - Broin
• Bio-PDO™ – Tate & Lyle• Sorona® - Glory
• TBA
• TBA
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Successful startup at Loudon, TNNew Bio-PDO™ applicationsSorona® expansions
Bio-Based MaterialsBIO-MATERIALS
The Dawn of Industrial Biotech
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Bio-PDO™ Opportunities GROWING
Bio-PDOTM
Better IngredientsBetter PolymersSorona®
Carpet & textile fibersMolded partsPackagingCoatings
Cosmetics & personal careLiquid detergentsDe-icing fluidsAntifreeze & heat transfer fluids
BIO-MATERIALS
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Biofuels: Transportation Opportunity
Source: IEA World Energy Outlook, BP.
0
500
1000
1500
2000
2500
3000
3500
4000
Transportation Stationary(Industry, Domestic,
Agriculture)
ElectricityGeneration
Inter-fuelConversion& Refining
Energy (in MM tons oil equiv./ year)
RenewablesHydroNuclearCoalGasOil
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Biofuels Growth 2020 Estimates by Region
EU & Eurasia Biofuels - 20 B gals
North AmericaBiofuels > 30 B gals
South & Central America Biofuels - 7 B gals
Asia Pacific Biofuels - 30 B gals
• Current Production > 4.0 B gals• Market growth + differentiated fuels and crop inputs
• Current Production ~ 4.0 B gals• Ethanol and sugarcane well established• Cellulosic fuels opportunity
• Current Production ~ 1.1 B gals• Less existing infrastructure,
less homogeneous market
• Currently ~ 1.7 B gals• Less existing infrastructure
less homogeneous market
Source: Dept of Energy and DuPont/BP estimates
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Grain Ethanol and Vegetable Oil Biodiesel0
10
20
30
40
50
60
70
Bill
ion
Gal
lons
/Yea
r
Grain Ethanol
Cellulosic Ethanol
2015 2025 203020202005 2010
January 2007 State of the Union Goal
U.S. Biofuels Growth Accelerating
2006 DuPont Participation: >$300 million, growing 20+%/year
Source: NREL Projection
Source: James D. McMillan, Ph.D.National Renewable Energy
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont Biofuels Strategy: 3 Segments
1. Seeds and Crop Protection: Commercial Products + Strong Pipeline
2. Cellulosic Ethanol:Develop enabling technology for rapid growth
3. Bio-butanol:Advanced fuels with unique performance
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
1. Seeds and Crop Protection for EthanolCorn Seed Ethanol
Select Pioneer hybrids with 2-4% higher ethanol yield per bushel
Three generations of pipeline traits for higher ethanol yield and value
Bushels/acreEthanol/bushelEnhanced co-product value
Crop Protection SolutionsSugarcane – Brazil Corn – U.S. and Canada
Current Commercial Sales>$300 million in 2006 Growing > 20% per year
9697
9899
100101
102103
104105
106Commodity CornPioneer Ethanol Corn
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
2. Cellulosic Ethanol : Developing Enabling Technology
Images: www.ca.uky.edu & www.nativeaccess.com
391 Gal/Acre
155 Gal/Acre
40 Gal/Acre
at 50%removal
rate
310 Gal/Acre
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Advancing Cellulosic Ethanol Fermentation
Enabling Technology: Conversion of C5 (xylose) and C6 (glucose) sugars at cost
effective yields, rates and concentrations
0
20
40
60
80
100
120
0 10 20 30 40 50
Time (hrs)
Con
cent
ratio
n (g
/L) Glucose
XyloseEthanol
Zymomonas mobilis
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Cellulosic Ethanol – Next StepsContinue to lead DOE projectR&D focus: further reducing the cost and investment intensityBroin collaboration to advance development and demonstration
Time
Com
mer
cial
Met
rics:
$i
nves
t/gal
, $c
ost/g
al 2002
Target
2006
Continued R&D and Pilot Testing
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
3. Biobutanol: Next Generation Biofuel
What should an advanced biofuel be?
High energy density?
Easy to handle and blend?
Less corrosive?
Produced from multiple feedstocks?
Cost competitive with ethanol? DuPont R&D Target
Biobutanol
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Metabolic EngineeringTechnology leader
Leveraging our Bio-PDO™success
Engineering the cell to produce the desired fuel at competitive cost
Biobutanol: Building a Better Biofuel Enabling Technology – Cell “Software” by DuPont
Genome
Cell Factory
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont - BP Biofuels PartnershipBiobutanol Development & Launch
BIOBUTANOL
WORLDWIDE FUEL MARKETS
• Powerful partnership• Shared commitment• Global reach • Complementary capabilities
ENERGY
RENEWABLEFEEDSTOCKS
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
PRODUCTION
COST COMPETITIVE VIA DUPONT BIOTECH
TERMINAL
ENHANCED FUEL STABILITYGOOD FIT WITH EXISTING
PIPELINE INFRASTRUCTURE
REFINERY
BLEND FLEXIBILITY0 – 100% WITH
GASOLINE AND ETHANOL
RETAIL / CONSUMER
IMPROVED MPGNO VEHICLE MODIFICATION
Biobutanol SolutionImproved Performance From Renewable Sources
PIPELINE
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
DuPont BiofuelsDevelopment Milestones
Agricultural InputsSeeds & Crop Protection
Biofuels From Biomass
Advanced FuelsButanol
Differentiated Transformative
Seed & Crop Protection Solutions • IndustrySelect™ Ethanol Hybrids - commercial• Increased Ethanol II – Phase 1• Increased Yield I – Phase 1
Biobutanol • Initial Targets Achieved• US & EU Fleet Testing Underway • UK Plant Startup and Market Intro
Cellulosic Fuels • DOE Project • Demonstration Unit• Broin Collaboration
2006 Revenue > $300 million
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
IP Leadership
Source: Nature Biotechnology, Vol. 24 October 2006 and Vol. 23, October 2005. Based on USPTO patents.
#2#2
#3#3
#1#1
8989
8787
118118
DuPontDuPont
U.S. GovernmentU.S. Government
University of University of CaliforniaCalifornia
7373
9494
132132
PatentsPatents
#3#3
#2#2
#1#1
RankRankPatentsPatents
7575
8484
9999
#3#3
#2#2
#1#1
RankRank
2003200320052005 20042004
PatentsPatents RankRank
#4#48282Human Genome Human Genome SciencesSciences 4646 #7#75858 #5#5
#7#7
#5#5
#6#6
6565
5454
5454
GenentechGenentech
ISIS PharmaISIS Pharma
AppleraApplera
5454
5555
7878
#6#6
#5#5
#4#4
5454
4242
63 63
#7#7
#6#6
#4#4
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Biofuels Business Strategy
Ag Inputs to BiofuelsSuperior seed for more fuel/acreCrop protection for best yield at lowest cost
Biofuel ProductionBiobutanol “software”developmentMixed sugar ethanol “software development”Cellulosic conversion technology
License & Sell Ag biotech - R&D intensive, large global growth potential Leverage R&D successes with licensees
Partner, License & SellPartnership with BP to develop, make & market biobutanolDeveloping partnerships to commercialize cellulosic ethanol technology
Opportunity Commercialization
ENERGY
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© 2006 E.I. du Pont de Nemours and Company. All Rights Reserved.
Innovation Across Three Centuries
DuPont R&D Advances• Industrial Chemistry• Polymer Science• Nylon, Spandex, Teflon®
Tyvek®, Kevlar®, Nomex®, Corian®, TiO2, Suva®, etc
Hagley Powder Mills“Birthplace of DuPont”
DuPont Bio Leadership• Metabolic Engineering• Seeds: Pioneer®• Biofuels• Biomaterials: PDO™, Sorona®• Biosurfaces• Biomedical