Mergers and Acquisitions in the Chemical Industry What is the - - PowerPoint PPT Presentation

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Mergers and Acquisitions in the Chemical Industry

What is the impact for Occupational Health?

Dr Paul Gannon Corteva Agriscience™ Global Medical Director

SASOM-MEDICHEM, JOINT CONGRESS 2019, July 2019

I declare the following Conflict of Interest:

SASOM-MEDICHEM JOINT CONGRESS 2019

IN SOUTH AFRICA

Type Company Employment full time / part time Corteva Agriscience Research Grant (P.I., collaborator or consultant; pending and received grants) None Other research support None Speakers Bureau / Honoraria None Ownership interest (stock, stock-options, patent or intellectual property) None Consultant / Advisory Board None Views represented here are my own and don’t represent those of Corteva, DuPont or Dow.

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• History of DowDuPont Merge and Formation of Corteva Agriscience
• Corteva Agriscience
• Practical guide to the impact on Occupational Health of a merge and

divestiture (spin)

• Conclusions and Recommendations

Outline

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Crop Protection

DowDuPont Merge Annoucemed December 2016

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This followed multiple previous acquisitions and divestitures in the preceding years for DuPont

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Introducing

Corteva Agriscience™

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A brand new agriculture company for a brand new world.

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Our Purpose

To enrich the lives of those who produce and those who consume, ensuring progress for generations to come

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Our Brand Values

Build Together

We grow by working together.

Stand Tall

We are leaders and act boldly.

Enrich Lives

We commit to enhancing lives and the land.

Be Curious

We innovate relentlessly.

Be Upstanding

We always do what’s right.

Live Safely

We embrace safety and the environment in all we do.

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The Challenges We Take On

Food Security Increasing Pressures

• n Farmers

Impact of Climate Change Feeding a Growing Population

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Serving the World

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(1) Net sales and operating EBITDA are stated on a 2018 DowDuPont Agriculture Division basis; (2) Commercial employees plus commissioned agents and promoters

$14.3B

Global Net Sales (1) $2.7B Global Operating EBITDA (1) We provide the right mix of seeds, crop protection, and digital solutions to maximize yield and improve profitability, ensuring an abundant food supply for a growing global population Our Company

21,000+

Colleagues

140+

Countries

10 million+

Customers

160+

R&D Facilities

12,000+

Granted Patents

100+

Production &

• Mfg. Facilities

65+

Active Ingredients

100+

Crops

8,000+

Sales Force(2)

Corteva Agriscience™ Global Scale and Market Presence

HQ: Wilmington, DE Business Centers in IA & IN Regional Sales Centers

$7.4B $2.8B $2.8B $1.3B

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IN THE SEED IN THE SEED

Breeding Breeding Biotech Biotech

ON THE SEED ON THE SEED

Seed-Applied Technology Seed-Applied Technology

ON THE FARM ON THE FARM Crop Protection Crop Protection Digital / Agronomy Digital / Agronomy

Built to Differentiate: Sources of Value for Farmers

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We have operated in AME for over 60 years

A world-class business serving the AME region

Seed (Maize, soybean and sunflower) Seeds (Corn, soybeans, sunflower, dry beans, wheat, grain sorghum and forage crops) Crop protection Agricultural chemicals (fungicides and herbicides) Agro sciences (Agricultural chemicals)

Focused on offering complete solutions to farmers

Corteva AME commercial footprint

• f the Congo

AME Commercial Areas

Eastern Africa Egypt & Middle East Export Countries North & Western Africa South Africa Main Office Production Sites Research Facilities

Today, we are organized into 4 main geographical regions with a physical presence in ~10 countries

900+ people strong 50+ countries 50+ active ingredients 6+ crops

GROWTH 5+ new product launches 15+ products in registration pipeline in Sub-Saharan Africa

Food security is top of governments’ agendas 1st fastest growing population in the world with quickly rising middle class > 40% of exports & 80% of employment from agriculture > 25% of the global population with >60% of world’s uncultivated land North & Western Africa (Casablanca- Morocco) Southern Africa (Centurion – South Africa) Eastern Africa (Nairobi - Kenya) Egypt & Middle East (Cairo - Egypt)

IN AFRICA FOR AFRICA

33%

67%

Seed

RESOURCES & PRODUCTS MARKET DRIVERS STRUCTURE

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Maize Lethal Necrosis Virus (MLN) Partners Partners Project Goals Project Goals

Identification of causal locus for MLN tolerance Edit CIMMYT inbreds to start delivery of a MLN solution to African farmers Establish gene editing capacity at CIMMYT and partners to address future trait needs Identification of causal locus for MLN tolerance Edit CIMMYT inbreds to start delivery of a MLN solution to African farmers Establish gene editing capacity at CIMMYT and partners to address future trait needs

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• Design a medical service from a clean sheet of paper for a

new independent Agriscience company

• Design considerations compared to DuPont or Dow
• 15BN revenue versus 60BN revenue
• 21,000 employees versus 60,000 employees
• Balanced agriculture and chemical business versus predominately

chemical business

• Average location size much smaller, geographically remote
• Some staff available from heritage companies, many positions

needed to be hired

• Heritage assets, processes, policies need to be harmonized
• Consider opportunities and threats
• Use the predominant lift and shift approach but take the
• pportunity to introduce improvements.
• Complexity and timeline meant a journey partner was essential

A Practical Guide to the OH Challenge of a Merger and Divestitures

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Corteva Integrated Health Services (IHS)

The purpose of IHS is to:

• Preventing sickness resulting from work
• Maintaining physical and psychological health

and wellness to maximize productivity and minimize medical costs to both the company and employees

• Compliance with occupational health legislation,

corporate health policies and Duty of Care

• Providing ongoing health support in response to

crises, business risks, products and registrations supporting Corporate and Operational Priorities

At all levels, IHS will work closely with each employee - as well as EHS&S, HR, and Enterprise Operations to meet our health goals and commitments

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IHS Journey Strategy

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Developed with a Journey Partner “ERM” Components

• People and Assets
• Technology Enablement
• Change Management / Training
• Programs/ Process/ Governance
• Sourcing

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Design a new global corporate IHS structure

• Use new hires to ensure we have health

professionals (HP) in the right location eg Sub Saharan Africa

• Team of HP distributed globally, present for the

region and able to represent the region. IHS support at site level was a “lift and shift” approach where no change, but to be an independent company

• New IHS clinic builds at larger locations
• New contract with IHS vendors on mixed sites
• Rationalization of IHS vendors where possible

Role transfer

People and Assets

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20 CoE: other functions such as safety and HR FSRE: Facilities management

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Final Corteva IHS Organization

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Electronic Medical Records (EMR)

• Heritage companies used different EMR
• Highly customized for chemical companies
• Not the latest versions
• Implemented differently global vs regional
• Choice Consideration was based on ease of

implementation – “Enterprise Health” (aka. “Webchart” Heritage Dow System)

• Design of metrics and dashboard to meet internal and

National reporting requirements eg E-Social in Brazil

• This was the most complex part of the project

Technology Enablement - EMR

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Many medical records were still on paper and not in EMR

• Active Employee Paper Records
• Needed moving to employees new location
• Inactive Employee Paper Record
• Needed to be moved to storage for Dow, DuPont or

Corteva based on assigned liabilities (including for discontinued businesses)

• “Employee Matters Agreement” between companies

was important.

• A Catalogue of location essential

Technology Enablement – Medical Records

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• Both main heritage companies had long standing

active Epidemiology programs studying morbidity and mortality

• 2 differently designed bespoke company mortality

registry databases dating back to the 1950’s

• For DuPont and Corteva the decision was taken to

archive the mortality registry in a format which would remain accessible and can be reactivated as needed

• It was an insurmountable task to divide the registries

between the three companies given former employees mixed careers

• Therefore each new company received work histories for

former employees and through the Employee Matters Agreement their records can be obtained as needed in the future for epidemiological study

Technology Enablement – Epidemiology

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Given the complexity of the separation project regular meeting were held

• Project Management Team
• IHS and HR Leaders Sponsorship Team
• Broader IHS Organization

Workshops were essential to resolve the path forward for complex issues and global representation was essential Training and Tools (information packets, training manuals) were provided as we approached “Spin” especially related to the new EMR activation

Change Management and Training

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Work / Business Processes

• New business processes documented

Programs / Services Provided

• Policies, Programs, Standards &

Guidelines were harmonized Corporate Governance

• Procedures put in place using the

Corporate IHS organization

Programs/ Process / Governance

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Overview IHS services provided to support …

30 Employee Assistance Program EAP Expatriate Assignments Pre-Employment / Preplacement Exams Occupational Health Surveillance Respirator Approval Hearing Conservation- Audiometry Hazard Communication International Business Travel Health Promotion & Education Wellness Case Management Occupational Injury Case Management Occupational Illness Early Reporting

• f Pain /

Symptoms Occupational Disability Management Periodic Health Exam Flu Vaccines

Prevention Treatment

Employee’s Integrated Health Services Spectrum

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Ensuring that the hundreds of small sites had an identified OH vendor in place was the major unanticipated time consuming piece of work

• Understanding local legislation
• Finding new providers with OH experience
• Rationalization
• Negotiations
• Privacy requirements
• Contracts

Sourcing / Procurement

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Sites Legion, Rural and Geographically Isolated

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For example: Africa Middle East

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In addition to be internally focused on our own IHS project work, IHS also had a role to care for employees and managers over the 2.5 year project where high workload and uncertainty were perennial

• Advice on working sustainably in corporate

publications

• Senior Management messages of support
• Resilience Workshops
• IHS support for individual employees
• Promotion of Employee Assistance Program

Services

Challenges for the Organization

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So we made it - June 3, 2019 NYSE Introducing Corteva Agriscience (Ticker:CTVA)

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• Multinational mergers, acquisitions, divestitures

have major impact on occupational health services in the chemical industry

• Long lasting projects need stamina and are a

marathon not a sprint

• External project management support is needed

to handle the complexity

• Important to preserve records and databases so

that critical epidemiology data is not lost and future studies can be conducted

• Don’t underestimate the OH / IHS sourcing aspects

Lessons Learnt and Recommendations

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Thank you

Any questions?

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www.corteva.com

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