DuPont has long been known as a chemical company, but Kullman is shifting the 211-year-old corporation towards innovation and agriculture
There’s never a bad time to be named CEO of a Fortune 500 company, but when Ellen Kullman took over the 211-year-old DuPont at the beginning of 2009, things could have been better. The global economy was tanking, sales were dropping and the future was hazy. Fast forward five years later, though, and DuPont is surging. Kullman has transitioned the company away from some of its traditional fields—including the performance chemicals business, best known for its nonstick frying pans and paints—and towards higher growth sectors in high-tech agriculture and nutrition. That shift has worked so far—last month DuPont announced that its fourth-quarter profits had doubled on the back of brisk sales of high-tech seeds and pesticides. I spoke recently with Kullman about the changes at one of America’s iconic companies, the global demographic shifts driving them and the big business of feeding the world’s 7 billion-plus people
TIME: You have been spinning off some business, investing in new ones. How do you see the company changing and what is driving those changes?
Kullman: I started right in the midst of the global financial crisis, so volumes were falling, and the world was not a very secure place. That gave me an opportunity to reflect on the portfolio, to reflect on how science was making a difference for us, how we were connecting to the market. We evolved to a strategy that is focused on science, and ag and nutrition, extending our advanced materials area and then really bringing to life areas like industrial biosciences that I was engaged in over a decade ago.
The more I travel around the globe, the more I’m convinced that this strategy is going to lead to higher growth, higher value, greater shareholder value, because of the amount of change that is going on in the world today. We started in sustainability 20 years ago. That’s three CEOs ago. Basically then it was all about footprint reduction. You think about it now with the stressors on the world, sustainability is really important for the future of civilization, if you think about the climate, if you think about food and energy. And we think science can play a huge role in solving some of these problems, in a way that creates shareholder value. We’re much more energy efficient today than we were a decade ago, and we saved billions of dollars by not spending it on energy. But more importantly we can help airframe manufacturers lighten their vehicles or planes, and get higher efficiency out of the energy they’re using. We can help farmers utilize water much more efficiently, like through our AquaMax product, to increase yields in water stressed conditions
TIME: When it comes to ag and science and technology, and especially when it comes to biotech, you see different levels of public acceptance in different countries. How do you deal with the concern people might have for the impacts of bioscience agriculture, which is so basic to human life?
Kullman: I’m believe that countries and people make choices for themselves about what science they accept or don’t accept. And it should be fact based, so they understand [the science] and make those decisions. We as a company need to be relevant whether they choose to utilize the technology or not. I believe in the science. When you think about GMOs, I spend a lot of time on them, and I understand them. But I understand that my telling people on faith may not carry the day. They need to see it, understand it, [and we need to] arm them with facts, educate them, and let them make their choices.
We have a large business in agriculture in non-GMO seed in Europe [where GMO technology is less accepted]. We’ll be relevant there, regardless of the technology choices they make. We’ll ensure that they have the right studies and tests done to help that.
TIME: How do you deal with the differing regulation on this issue around the world, on biotech and on things like biofuel, where policy has a big impact on how the business grows?
Kullman: We are operating in an increasingly regulated world. We would certainly love to see a more harmonized regulatory environment around the world, to see that getting something approved in India is the same as getting it approved in America or China. That’s just more efficient. But I do think that we do have to participate in the process from a regulatory standpoint. We workwith different governments around the world to share information and to inform them, so when they consider laws and regulations, they do so from a standpoint of data and information that helps them make the right decision.
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TIME: Within agriculture, you mentioned this enormous demand coming from parts of the developing world, and this yield gap, between what farms can do in Iowa versus farms in places like eastern Europe or sub-Saharan Africa. Is the aim eventually that farming in those parts of the world will come to resemble farming in America, or will there still be regional differences?
Kullman: Food is phenomenally local, and there are cultural differences that you have to comprehend. We need a common language, because people talk about this area in so many different ways. In the fall I was in an area in northeast China, above North Korea, part of the corn belt there. You drive along a road and you’re seeing an area that looks damn close to what you might find in the rolling hills [of Iowa], and then you find out the corn is all hand sown and hand harvested. That each farmer owns or gets the ability to farm a certain number of mous—about a tenth of an acre. And you go sit with a farmer or a family and you talk about farming, and they’re doing pretty well under their historic methodology in farming that is very labor intensive. But they know that has to change, and they know they need to mechanize. And that is very different there than what you’d find in India, or in Tanzania. It will always be different, but there’s a big gap that can be crossed from a productivity standpoint in agriculture that shouldn’t be lost on us. And I think it creates huge economic opportunity in places like sub-Saharan Africa, as farmers go from subsistence farming to farming with an income.
TIME: You mentioned sustainability as a big part of what you do. That word has a lot of different meaning for a lot of different people. When you say sustainability, what does it mean? Is it just efficiency or does it go beyond that?
Kullman: Sustainable means selecting for a long time, so [what you produce] can withstand the rigors of the world, while allowing the environment to continue to be plentiful and grow. I think that whole area is evolving greatly, and as the regulatory environment changes, people become concerned about how the future looks, and the part that each of us plays. There’s real opportunity. Think about cellulosic biofuels. First generation biofuels are in use, but what’s really sustainable are second or third generation biofuels that utilize plant waste and things like that. This is an area that is not just something to do to create real value for our customers and for our company going forward. We don’t have all the answers but I think there’s a lot of opportunity there.