Monsanto Considers Dumping Chemicals Business

Monsanto is thinking of stepping out of nylon and slipping into cotton.

Nearly a hundred years after getting its start in the chemicals business, Monsanto sees a brighter future in the fields that are growing its genetically altered cotton plants.

The company said Thursday it is looking at several options for its chemicals business - from keeping the business and restructuring it to a spin off or outright sale.

Wall Street sent Monsanto’s stock 3 percent higher Thursday, one week after Monsanto shares rose to new highs on news its cotton plants are on the way to yielding 15 percent more than conventional plants.

The agriculture products are a “much more exciting business and that’s what’s attracting investors,” said Bill Fiala, an analyst with Edward Jones in St. Louis. “Chemicals was turning into a drag on the growth of the company. … There’s not a lot of room to grow in that area now.”

Monsanto isn’t alone in looking to shed chemicals. Low prices and slowing growth have prompted oil companies and others to get rid of their chemical lines.

Olin Corp., based in Norwalk, Connecticut, announced Thursday plans to sell four chemical businesses and spin off its ammunition and aerospace businesses into a new company.

Texaco got out of the chemical business two years ago and more recently, weak performances by chemical operations have hurt Exxon Corp. and Mobil Corp.