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The fifth most powerful business woman in America according to Fortune, DuPont’s (s dd) CEO Ellen Kullman, has spent the last few years restructuring the two century-old company around using science to help meet the needs of a world population that will balloon to 9 billion by 2050. One of those crucial needs will be access to energy, and in particular energy that doesn’t contribute to changing the world’s climate, which is why Kullman found herself on Tuesday giving a speech before thousands of energy geeks at the Department of Energy’s ARPA-E Summit.
DuPont, which has a market cap of $44 billion, “is not an energy company, it’s a science company,” Kullman reminded the audience. But with its industrial material products, high-yield agriculture strains, and bio-based chemicals, DuPont is a major supplier of materials for solar manufacturers, and is building a ground-breaking cellulosic ethanol plant in Iowa. “No industry needs innovation more than energy,” said Kullman.
Following Kullman’s remarks, we sat down with the 57-year-old, who is DuPont’s first female CEO, to ask her about working with startups, how they’ll overcome the hurdles of biofuels, and just how bullish she is on solar. The following is an edited interview:
How can startups work with DuPont? What are you guys looking for?
It depends on the area. We work with a lot of startups and small companies and we do a lot of collaboration. We’ve long transitioned to a belief that our ideas aren’t the only great ones out there and we are openly looking to collaborate — we call it inclusive innovation. Some of the problem’s we’re facing are so complex that you can get there faster and smarter if you do it with others that have skill sets that align with where we’re going or with what we need.
We’ve been working with Genencor, a Palo Alto startup, since the 90’s and the idea was to use agriculture to create industrial materials and fibers. We had certain parts of it and they had other parts of it.
There can be great synergy, but you have to get really specific. We tried before to paint the world with a large partnership with a university or a company without that definition and it doesn’t really go anywhere. A lot of times we think we know what we want, and when we engage we find out that there’s a whole other side of this that they [the startup] can bring that we hadn’t really comprehended before.
We bought Innovalight, which is helping us from the standpoint of silicon inks for solar photovoltaics. We don’t buy them all, right? The relationship is really dependent on the needs of each company and can span a contract to a JV to a purchase or a minority equity investment. The more inflexible we are the less successful we’re going to be.
Is there a strategy for acquiring startups? The reason I ask is because it seems like a lot of the IT and web ecosystem has been built around companies like Cisco or Google aggressively acquiring startups, but the science sectors don’t seem to have this kind of acquisition ecosystem.
It has to be, to what end. You want to put out real money and the question is how will it create value for our shareholders? So it tends to be very specific to an area. Like the solar area we might be looking broadly at novel materials, or novel processes, that we can bring in that can enhance our position. So it’s not a strategy to acquire, but an open strategy to create the strongest future whether its acquisition or JV or licensing. It’s about creating shareholder value. Areas that we’re very active in is agriculture, nutrition, and industrial biosciences and advanced materials.
A lot of people, including myself, are watching the ground-breaking of the cellulosic ethanol plant in Iowa with great interest. But many companies have tried to do this and have struggled. Why will DuPont succeed in this area when others have not?
We’ve been working at this for awhile — a decade. We had very specific milestones we had to meet from a tech standpoint and a scale up standpoint. We had a 150,000 gallon plant that had to meet certain criteria before we would go to the next step. This was the second major project we did from that standpoint. The first was the Bio-PDO that goes into fibers and carpets. We had an understanding and a lot of experience that told us we could get this done. But we don’t start putting a shovel in the ground until the milestones are met.
We already have the relationships with the farmers in the communities that will provide the raw materials for the plant. And we understand how much it’s going to cost to collect and store, and that’s all part of the economics. I was really impressed with the work that the team did in laying that all out five years ago. I think we have a much better shot at being successful because we have all of these areas moving at the same time. We keep building on our learnings from previous projects and it’s helping us do it faster and understand what we need from others and I think it’s going to create a huge potential for success.
Has the process of moving the cellulosic ethanol plant along taken longer than expected?
It’s never short enough for me. They [her executive team] would probably tell you that it exceeded their expectations. It’s this tug of war.
DuPont is a major supplier for materials and that makes it susceptible to the vulnerabilities of the solar cell and panel market right now. Are you still as bullish on the solar materials sector as the $2 billion DuPont was planning on selling for 2014?
I think we’re bullish on solar PV. We believe that the progress that has been made around efficiency has been tremendous in the last few years. I remember thinking when crystalline silicon got to 12 percent efficiency that it was impressive and now they’re pushing 20 [percent].
I think that materials matter. It’s not only the efficiency of the cell when it starts, it’s the efficiency 25 years later. So weatherization, things like that, become very important and materials matter in that.
But I think it’s going to be bumpy. Any new technology transition is bumpy. And you’ve just got to be able to put it in perspective for those bumps. How much we sell in 2014, or 2015, will depend on how many modules are built, right? But I think the science is there and we just have to continue to make the progress.
What would you want to see from the government in the energy and clean power sectors?
Stable government policy. I think stability around that is very important. Consistent government policy is a really important part of a secure and a more diverse energy future.