Article at a glance:

Using plants as plants

Some chemical companies have spun off their traditional businesses to concentrate on what they hoped would be more profitable life science products. While the results have largely been disappointing, companies shouldn't give up. Biotechnology-based products still account for only a small percentage of the total market for chemicals, but biotech dominates the production of enzymes, certain organic acids, and certain vitamins and is increasingly used to produce dyes, food additives, and other compounds. But biotechnology involves significant financial risks—for example, the payback from R&D spending in this area can be slow.

The take-away

Many chemical conglomerates are in a good position to profit from biotechnology. Despite significant financial risks, now is the time for them to revisit their strategies for doing so.