Chad Holliday
Chairman and CEO, DuPont
Biotechnology: Progress and Promise
At BioJapan 2004, Tokyo
September 28, 2004

Slide 1 – Biotechnology: Progress and Promise

Five yeas ago, I first spoke on biotechnology to a group in Boston. The main points I shared then dealt with the challenges that biotechnology faced in terms of acceptance and development.

The big difference between then and now is progress – progress in acceptance, in generating solid data on the benefits of the technology, and in getting new and exciting possibilities closer to the market. Today I plan to talk to you about how we are already delivering real value through the application of biotechnology.

In the past five years we have seen significant development in biotechnology, increased biotech product offerings, and important changes in public acceptance of biotechnology and biotech products around the world.

This is not to imply that everything is smooth sailing for biotech after five years. Far from it. DuPont's Pioneer seed business planted six test plots with genetically enhanced hybrids in France this year. Only one remains. The rest have been destroyed by people who would rather break laws than to allow research trials to continue that could further demonstrate the benefits for people around the world.

But, at the same time, we can admit to important advances and developments in what we see as the three main areas of biotechnology: medicine, agriculture and materials. Like some others observers of biotechnology, I like to think of these by color – red for medicine, green for plants and white for materials. I will speak to two of those – agriculture and materials – because those are the areas that DuPont is pursuing.

First, agriculture. We can now say that biotech has been established as one tool among many for feeding the world sustainably – a tool that producers and consumers around the world will increasingly depend on.

Slide 2 – Global Realities

Consider the challenge farmers face. Between now and 2050 we will have to double the world's food and fiber production on the same amount of land that is currently in production. Today many people talk about the demand for energy due to growth in China. Of at least equal importance is the demand for food and fresh water. The demand for protein (meat from cattle, pigs and chickens, which depend on feed grains) will continue to increase. As economies improve, so will diets. Agriculture is constantly competing for land against increased urbanization and salinization.

Why will we need this increased production? We continue to add over 70 million people to the world each year. In addition to the population growth, economies of developing countries have been growing. With growing economies come diets with more protein, demanding more feed grain.

However, in the last four to five years – although we've had normal production years without any major droughts or disasters – both the U.S. and world supply of corn and wheat (the major food grains) have continued to decrease. Essentially, demand has outstripped supply. Without a plan to deal with this imbalance between supply and demand, we could be headed for disaster – a major feed grain shortage.

This is not what the news media and some NGOs would have the public believe. They dismiss how vital the sustained productivity improvements in agriculture have been to the well being of everyone on the planet. Productivity gains are just part of the solution to feeding a hungry world. Where would we be today if in 1950 someone had decided that we had enough grain in the world and we had stopped investing in improved genetics?

Slide 3 – Growth in Total Grain Production

The dark blue bars on this chart represent global corn acres. They are relatively flat from 1970 through the projection to 2007. The light blue bars represent the increased productivity that has been realized on those acres. Since 1980 (the middle bar on the chart) the world's corn growers have increased their production by 45 percent and done it on a less than a 5 percent increase in acres. In effect, we've added 130 million "virtual" acres by improving corn genetics, technology and management practices. Think of the impact on our world today if we did not have those 130 million "virtual" acres!

Slide 4 – Most Rapid Adoption in History

This has been accomplished using all the tools of agriculture, including biotechnology. Biotechnology represents the most significant technology adoption in agricultural history. This chart provides perspective. Our seed business, Pioneer, was the first to market hybrid corn seed in the 1920s. It took 30 years for hybrids to be fully adopted in the U.S. More than 75 years later, hybridization acceptance globally is still only at 60 percent.

By contrast, look at the results of plant biotechnology after only eight years. Plant biotech adoption now stands at 80 percent for soybeans in the U.S. and 55 percent worldwide. Cotton adoption in the U.S. is 73 percent and 21 percent worldwide. Corn (maize) is 40 percent of the U.S. market and 11 percent worldwide. This is, by far, the most rapid acceptance of any technology in agricultural history. Companies can't drive that kind of adoption. It occurs because people see the value and are convinced it is as safe.

At DuPont, we see biotechnology as a tool to help our customers. We remain thoroughly committed to testing to ensure the safety of our products and to comply with all regulatory requirements in the countries where we do business. We have a panel of highly regarded outside experts who review our biotechnology programs and who are in the process of preparing their second independent review of DuPont biotechnology.

We continue to experience a rapid increase in demand for genetically enhanced products in our Agriculture & Nutrition businesses. At the same time, we emphasize the importance of societal choice, and we continue to offer non-genetically enhanced products where they are valued. In agriculture and nutrition, biotechnology has consolidated several key benefits and others are in the process of being introduced.

The most obvious benefit of genetically enhanced crops has been improved agricultural productivity through increased yield.

Another critical benefit has been reduced pesticide use. Farmers are reducing the amount of spraying even as companies such as DuPont are finding newer, more environmentally friendly crop protection products.

An often overlooked aspect of plant biotechnology is than it is "size neutral." Because the benefit is in the seed, large and small farmers around the world are successfully adopting biotechnology – whether the farm size is a third of a hectare in South Africa or 11,000 hectares in Brazil. In fact, the rate of acceptance is faster in countries like South Africa and China than it is in many developed countries. Biotechnology does not require new equipment or other capital investment. Once you have the seed, you have the benefit.

The emerging benefits of plant biotechnology are represented by the drought-resistant corn that DuPont is developing, which will be available in a few years, and which is the first of a new class of biotech benefits that will be valued by both farmers and consumers. Biotechnology's significant contribution to total agricultural production aside, "green biotechnology" – plant biotechnology – will change lives in small but significant ways through healthier and more nutritious foods.

We can also expect increased yields to create options for sustainable bio-fuels and bio-materials. We are investigating biotech processes for converting not just grain to sugar but breaking down the lignin in cellulose to convert the entire biomass to sugar.

These are examples of "white" biotechnology or materials biotechnology which an important business publication in the U.S. recently called the "third wave" of biotechnology – one with far reaching potential that could surpass the contributions of biotechnology to medicine and agriculture. The report said that biotech is working its way into a wide range of industries – chemicals, autos, plastics, consumer products, textiles, paper – and it is bringing change to all phases of production, from inputs to finished goods to pollution control to packaging.

At DuPont, we are working to create new manufacturing platforms based on biotechnology that significantly lower cost and investment or offer an improved environmental performance. In other words, we are solving problems that cannot be solved by existing approaches. We are working under a grant from the U.S. Department of Energy to look at new ways to use crops to make fuel in bio-refineries. Our joint venture with Statoil to convert off gases into useful products is another example.

We are also working to identify new materials with improved functionality and enhanced value-in-use. Industry is learning to use biotechnological approaches to generate very small structures with high precision for use in everything from medicine, to electronics, to precision coatings.

Slide 5 – DuPont Commitments

Finally, let me conclude with an update. Five years ago we made some pledges as a company regarding biotechnology and sustainability.

We said we would create a global biotechnology advisory panel to guide our actions. We have had a very distinguished panel of outside experts in place for four years. They completed one review and assessment of our biotechnology programs and are in the process of finishing up the second such review. Reports from this group are on our website along with data on our biotech products and our biotech guiding principles. We made a commitment to transparency and we're doing it.

We said we would advocate informed consumer choice through meaningful information and product assurances. We have done much to make our actions and developments transparent through the information we provide. Our biotechnology website is a model of information and interaction for stakeholders. We continue to see biotechnology as one choice for consumers among many.

We committed to take steps toward renewable resources and energy. DuPont's total global energy use is now 9 percent below our 1990 base. Two percent of our global energy comes from renewables and we expect to increase that to five percent by 2005 and 10 percent by 2010. In 2003, we generated 15 percent of global revenues from non-depletable resources including agricultural feedstocks, technology and knowledge sales, and service. Our goal is to achieve 25 percent by 2010.

And we said we would make the same commitment to the safe practice of biotechnology that we have made historically to industrial safety. We have. Our obsession with safety has carried over into biotech products. DuPont produces an automated, genetics-based system for detecting pathogens in food. Hundreds of these systems are now in use around the world and have been adopted by government agencies in the U.S., Mexico, Brazil and China. We are using biotechnology to make the world’s food supply safer.

Slide 6 – DuPont Bioethics Guiding Principles

The context for everything we do continues to be our Bioethics Guiding Principles which we adopted with the help of our biotech Panel. These principles incorporate our centuries old commitment to safety. They address biodiversity and environmental improvement. They also reflect contemporary society's expectation for transparency and stakeholder engagement.

Overall, we are encouraged by the progress that companies have made around the world in biotechnology. We realize that there is much yet to come. And we understand that continued open and transparent dialogue with consumers and governments will be necessary for this tool to achieve its maximum utility in the years ahead. We remain convinced that biotechnology can and is being employed successfully and safely to the benefit of people everywhere and that it will make great contributions to meeting human needs in the 21st century.

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