EI Du Pont Nemours Co. (DD), the world’s second largest chemical company, recently announced that it will benefit from the recovering economies in emerging markets including China, India and Brazil, where a significant increase in population and globalization are fueling demand.

DuPont sales in emerging markets have grown by 80% in the past five years at a compound annual growth rate (CAGR) of 16% and accounted for nearly one-third of the company’s $30.5 billion sales in 2008. While 2009 emerging market sales estimates are expected to drop about 10% from $9 billion in 2008, the company projects 2012 emerging market sales of about $13 billion.

DuPont’s sales in China grew at a CAGR of 14% over the last five years. Sales in 2008 were about $1.7 billion. The company expects solar and light-weight vehicle technologies to help growth in China. The company is currently a major supplier to the crystalline silicon solar cell and module market with products including DuPont(TM) Tedlar PV 2000 and 2100 series, Solamet metallization pastes and Elvax encapsulant resins. DuPont recently launched a Photovoltaic Technology Center at the DuPont China R&D Center in Shanghai to provide local technical support and product innovation.

DuPont materials also are critical to next generation thin film photovoltaic modules for large-scale commercial and utility applications and building integrated installations. The company launched a thin film photovoltaic subsidiary in Shenzhen to focus on amorphous silicon thin film modules, which will become operational later this year.

In India, DuPont’s business expanded at a CAGR of 14% over the last five years with revenues of nearly $500 million in 2008. In terms of growth rate, India is the fourth largest economy in the world, growing in the high single digits. Recently, the company opened a global R&D center in Hyderabad. Paints from DuPont Performance Coatings that can be applied to metal and plastic as well as polymer light weighting materials, including DuPont(TM) Viton elastomers, are the DuPont materials used in the recently launched Tata Nano vehicle in India.

Meanwhile, DuPont has been able to cut $600 million by way of costs so far this year, part of a previously announced plan to trim $1 billion of costs in 2009. We maintain our Neutral recommendation on the stock.

Read the full analyst report on “DD”
Zacks Investment Research