DuPont takes aim at low-carbohydrate craze

Chemical giant intends to turn its soy proteins into a prime ingredient

April 16, 2004|By KNIGHT RIDDER/TRIBUNE

ST. LOUIS - DuPont Co. thinks St. Louis might hold its next Teflon, Kevlar or Lycra.

The chemical giant, headquartered in Wilmington, Del., has built an empire turning scientific successes into household names synonymous with quality.

Using advertising and trademark logos, DuPont has convinced a world of consumers that products without its patented knowledge are of less value than products with it.

Now, DuPont wants to capitalize on the low-carbohydrate food kick and turn its soy proteins into the value-added ingredient no health-conscious consumer could live without.

The brand is Solae. Its logo appears on products like Gardenburger, Snapple-a-Day and 8th Continent soymilk.

The question is whether DuPont and Solae Co., a St. Louis-based joint venture owned 72 percent by DuPont and 38 percent by White Plains, N.Y.-based Bunge Ltd., can take soy protein from health-food staple to common ingredient.

"We're doing with the Solae brand exactly what we've done with Teflon, Tyvek, products like that where we have created an ingredient brand," DuPont Chief Executive Charles O. Holliday Jr. told analysts in New York this year.

Solae Co. was formed about a year ago.

Before the joint venture, the divisions that make up Solae had revenues totaling about $800 million. Solae's sales are on track to hit $1 billion this year.

DuPont wants more. Solae says it can deliver.

"I, for one, think we can meet their lofty expectations for us," said Todd Sutton, Solae's global marketing director. For DuPont, efforts to boost Solae come at a particularly critical time.

DuPont is selling its largest business, Invista, formerly DuPont Textiles and Interiors. So DuPont's agriculture and nutrition segment will become its second-largest line, and Solae's sales will be a considerable chunk of that division's $4 billion-plus revenue.

However, Solae has competition. Most of Bunge's fellow soybean processors, such as Archer Daniels Midland Co. and Cargill Inc., are expanding into value-added markets.

But Bunge was smart to realize its technical limitations and form the partnership with DuPont, said Christine McCracken, a food and agribusiness analyst with FTN Midwest Research in Cleveland.

"Given the growth in this market, I don't think there are going to be any losers," McCracken said.

Soyatech, an information company that tracks the soybean industry, estimates sales in the soy-foods market grew by more than 10 percent last year and by 13 percent the previous year. Soyatech research shows about $3.65 billion in soy foods were sold in 2002, compared with $862 million a decade earlier.

Erik Fyrwald, group vice president at DuPont agriculture and nutrition, says double-digit sales growth is responsible for Solae's first $1 billion in sales.

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