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Developments in Competitor Products – Soybean Specialty Oils

Developments in Competitor Products – Soybean Specialty Oils. 2007 Canola Council of Canada Meetings Victoria, BC 21 March 2007. Agenda. We see challenges ahead in the oils market that will impact our customers business

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Developments in Competitor Products – Soybean Specialty Oils

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  1. Developments in Competitor Products – Soybean Specialty Oils 2007 Canola Council of Canada Meetings Victoria, BC 21 March 2007

  2. Agenda • We see challenges ahead in the oils market that will impact our customers business • Bunge and DuPont have created an alliance to help our customers meet these challenges • We have a rich pipeline of products to address business issues • Summary

  3. We see challenges ahead in the oils market that will impact our customers business

  4. The Alliance integrates the capabilities of Bunge and DuPont to deliver functionally effective, large volume soy oil & meal products Integrated capabilities across the Supply Chain Genetics Seed Growers Origination Processing Sales DuPont/Pioneer Bunge

  5. Customers are seeking a soy solution Total US Edible Oil Consumption ~ 26B lbs Total Soybean Oil ~ 17B lbs Total Hydro Soy ~ 8.5B lbs

  6. Future improved oil profile opportunity ~15 MM soy acres The primary market opportunity for specialty soy oils is replacing hydrogenated products Customer Needs: • Functionality • Supply Reliability • Price

  7. We have an ambitious pipeline of products Treus™ Product Development Pipeline TreusTM Low Linolenic Soybean Oil: Significantly reduces trans fats for light frying Treus™ High Oleic Soybean Oil: Increase functionality & stability for heavy duty frying and industrial use Treus™ High Oleic/High Stearic Acid Soybean Oil: Low trans fats shortening and margarine for baking Treus™ Enhanced Soybean Meal: Improved feed value for poultry and pork 2005 2012+

  8. Matching customer and consumer needs with the research pipeline • Functionality • Fry life, shelf life, flavor, etc. • Proven R&D support • Custom applications development • Supply Reliability • Wide geographic production • Industry leading grower relationships • Broad processing coverage • Price • Competitive with alternative oils • Risk management via hedging Customer needs Research efforts

  9. We have developed a Low Linolenic Oil that allows a zero/reduced Trans label • Frying Oil • Spray Oil • All Purpose Interesterified • All Purpose Palm Fractions • Custom formulations produced to customer specifications TreusTM Low Linolenic Soybean product applications

  10. Fry Test Treus™ Low Lin Oil versus Creamy Soy Liquid Frying Shortening Fried french fries, chicken nuggets and onion rings daily for 5 days Sensory evaluation of food products and analytical evaluation of oil breakdown Test Results No significant sensory difference found in food products fried in the Low Lin versus the hydrogenated control Analysis of oil samples indicate similar fry life to the hydrogenated control Product application testing is critical to the success of new Trans-fat alternative oils Bunge Internal – Low Lin Soy Fry Test

  11. Building the supply chain to meet customers’ needs 2007 Low Lin Contracting Summary CHS – Fairmont

  12. What is on the Horizon for Next Generation Specialty Oils • High oleic soy is the next generation specialty soy oil • High oleic offers increased stability & functionality for heavy duty frying and industrial applications • Availability is expected ~2008 / 2009

  13. Product application testing is critical to the success of new Trans-fat alternative oils High Oleic Soy Oil Testing • +10 evaluations at university and commercial pilot facilities • Studies showed that low linolenic, high oleic soy and blendsare attractive alternatives to partially hydrogenated oil • French fries, fried chicken, potato chips, tortilla chips, salad oil • High oleic soy typically equaled or outperformed partially hydrogenated soy in standard oil quality measurements • polars, polymers, p-anisidine, free fatty acids, peroxide value • High oleic soy generated less objectionable room odor compared to partially hydrogenated oil during frying studies

  14. Summary • The food industry is seeking different oil solutions than what we are providing today • Other competing oils (i.e. palm, HO canola, corn, etc.) are eager to fill this need • Next generation of modified oils will include High Oleic soy oil • Low Lin soybeans are the first of many output traits being developed to improve soybean oil quality

  15. Questions Steve Schnebly Research Coordinator – Pioneer Hi-Bred (515) 253 2270 Steve.Schnebly@pioneer.com

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