DuPont (DD) to Upgrade Probiotics Facility in Wisconsin

Zacks Equity Research Published on August 24, 2017

DuPont’s (DD - Free Report) Nutrition & Health segment has announced that it will expand its probiotics pilot facility in Madison, WI. The $10 million investment will further reinforce DuPont’s position as a leading player in the probiotics industry. Further, this will expedite the development of new products and significantly hasten the delivery of pilot materials for clinical trials and customer evaluations.

The Madison probiotics pilot area provides increased capacity and speed for new product development. This in turn helps to improve the overall scale up capability and provides a seamless transition to commercial scale production. Construction of this area has been completed in phases over the last six months.

The new facility features state-of-the-art equipment, data collection, laboratories, instrumentation and specialized work space for probiotic development and scale up. The upgrades have already increased the bandwidth to run more development projects while improving scale up efficiency and time to market.

DuPont has outperformed the industry over the last three months. The company’s shares have moved up 6.9% over this period, compared with the industry’s gain of around 4.7% over the same period.

DuPont kept its positive earnings surprise streak alive with a solid beat in second-quarter 2017. The company recorded adjusted earnings of $1.38 per share in the reported quarter, up 11% from $1.24 per share a year ago. Results topped the Zacks Consensus Estimate of $1.29. DuPont logged net sales of $7,424 million, up roughly 5% year over year on higher volumes. The figure surpassed the Zacks Consensus Estimate of $$7,260 million.

DuPont is well positioned to gain from its cost-cutting and productivity improvement measures and product launches. The company has numerous new products in its pipeline that are expected to create value for customers.

Moreover, the planned mega-merger with Dow Chemical (DOW - Free Report) is expected to deliver cost synergies of around $3 billion and growth synergies of roughly $1 billion. The companies expect the closing of the merger to take place on Aug 31.

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