Wilmington chemicals giant the DuPont Co. will invest $50 million over the next five years to expand agricultural biotech research at two of its Delaware sites, adding 75 jobs here, the company said Thursday.
State taxpayers are chipping in $1.6 million in grants to assist in DuPont's expansion, according to Thursday's announcement.
Tony Kinney, a research director in DuPont's agricultural biotechnology business, said the company will add and renovate lab space at its Experimental Station research campus in Alapocas and the Stine Haskell Research Center near Newark.
New hires will research biotech soybean seeds, he said. Kinney said the company considered expanding research at sites in Iowa, California and India, but ultimately chose Delaware, partly because of the public incentives the state offered, he said.
"We have a limited amount of resources to invest in growth," Kinney said. "We look at all of the options and how best we can leverage those resources."
DuPont, once a traditional chemicals maker, now counts agricultural biotech as its biggest -- and fastest-growing -- business.
Pioneer Hi-Bred, the Iowa-based subsidiary that produces biotech corn and soybean seeds, generated $9.1 billion in 2010 sales, or 29 percent of DuPont's total last year. DuPont's agriculture business also accounted for 45 percent of the company's $3 billion in capital expenditures and research-and-development budget last year, according to company estimates in December.
DuPont expects its agricultural unit sales to grow 8 percent to 10 percent annually through 2015. Global population growth is a key driver of the business.
The 75 new local employees, mostly scientists and associates, will research new seed products for Pioneer to improve yields by warding off crop-killing insects or protecting crops from environmental elements or disease, Kinney said.
DuPont currently has about 200 people working in agricultural biotech research in Delaware. The company cut thousands of jobs during the recession, and former DuPont workers could fill open positions, a spokesman said. No positions have been eliminated in the company's agricultural biotech unit, however, according to the spokesman, Rick Straitman.
ssociation, called DuPont's investment "huge for Delaware."
"Delaware is very rich in terms of its [biotech] work force," Dayton said. "I'm sure that's one of the reasons they decided to make that expansion here in the Wilmington and Newark areas."
Since Gov. Jack Markell took office in January 2009, his administration has awarded more than $60 million in incentives to businesses, most of them large industrial players.
The money, distributed as grants and loans through the Delaware Economic Development Office's Strategic Fund, often is intended to create jobs and spur economic growth.
The investments seem to have had only a marginal immediate impact. Delaware's unemployment rate remains around 8.5 percent and Delaware's economy is growing at the slowest pace in the region, according to data from the Federal Reserve Bank of Philadelphia.
In fact, Federal Reserve economists are forecasting contraction in the state's economy through June, based on the bank's leading index, which considers the number of housing permits filed and claims for unemployment insurance, among other indicators.
"I think Delaware has problems," said Jim Butkiewicz, an economics professor at the University of Delaware. Butkiewicz specifically pointed to an ailing financial-services sector, where HSBC and Wilmington Trust recently announced a combined 1,200 layoffs.
Of course, some of the state's investments, including the pending DuPont grant, are intended to create jobs over the long term.
DEDO has committed $21.5 million in grants and loans to startup electric carmaker Fisker Automotive, for example. Fisker has promised to employ 2,500 people producing its cars at the former General Motors plant near Newport, but doesn't plan to begin production until late next year.
This is not the first time DuPont has benefited from state money during Markell's administration.
Last April, DEDO approved a $240,000 grant to help DuPont build a new solar research lab at its Chestnut Run campus.
Butkiewicz said he was not convinced that the state's share had a significant impact on DuPont's decision.
"It's basically saving DuPont money," Butkiewicz said. "But if they say they're adding jobs, that will be helpful. Every job helps these days."
A DEDO spokeswoman said the grant includes a "clawback" provision. If DuPont does not add a specific number of jobs, the state could reclaim its incentive funds.
Kelvin Lee, a chemical engineering professor at the University of Delaware and director of the Delaware Biotechnology Institute, said DuPont's investment could have positive impacts, both direct and indirect.
"It's a sign that there is local investment in technology and science research," Lee said. "Many people hope [biotech] will be an important foundation for the future economy. I think that's a positive sign."
