Scotts Company (SMG)

The Company’s biotechnology program is evidence of its commitment to responsible research and to developing more effective and easier-to-use products that are preferred by consumers and are better for the environment. As part of this program, the Company is currently employing technology already proven in agriculture to develop new turf varieties that could one day require less maintenance, less water and fewer chemical inputs to resist insects, weeds and disease.

 

 

The Company views its commitment to innovation as a competitive
advantage. Consequently, we continually invest in research and
development and consumer research to improve and develop
existing and new products, manufacturing processes and packaging
and delivery systems. Spending on research and development was
$44.7 million, $38.8 million and $35.1 million in
fiscal 2008, 2007 and 2006, including product registration costs
of $9.8 million, $9.3 million and $8.2 million,
respectively. The Company’s long-standing commitment to
innovation is evidenced by a worldwide portfolio of patents. In
addition to the benefits of our own research and development, we
actively seek ways to leverage the research and development
activities of our suppliers.

 

Our research and development worldwide headquarters is located
at the Dwight G. Scott Research Center in Marysville, Ohio. We
also have research and development facilities in the United
Kingdom, France, the Netherlands and Sydney, Australia, as well
as several research field stations located throughout the United
States. In these combined locations, the Company employs
approximately 30 PhD scientists.

 

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The Company’s biotechnology program is evidence of its
commitment to responsible research and to developing more
effective and easier-to-use products that are preferred by
consumers and are better for the environment. As part of this
program, the Company is currently employing technology already
proven in agriculture to develop new turf varieties that could
one day require less maintenance, less water and fewer chemical
inputs to resist insects, weeds and disease.

 

 

The Company views its commitment to innovation as a competitive
advantage. Consequently, we continually invest in research and
development and consumer research to improve and develop
existing and new products, manufacturing processes and packaging
and delivery systems. Spending on research and development was
$44.7 million, $38.8 million and $35.1 million in
fiscal 2008, 2007 and 2006, including product registration costs
of $9.8 million, $9.3 million and $8.2 million,
respectively. The Company’s long-standing commitment to
innovation is evidenced by a worldwide portfolio of patents. In
addition to the benefits of our own research and development, we
actively seek ways to leverage the research and development
activities of our suppliers.

 

Our research and development worldwide headquarters is located
at the Dwight G. Scott Research Center in Marysville, Ohio. We
also have research and development facilities in the United
Kingdom, France, the Netherlands and Sydney, Australia, as well
as several research field stations located throughout the United
States. In these combined locations, the Company employs
approximately 30 PhD scientists.

 

The Company’s biotechnology program is evidence of its
commitment to responsible research and to developing more
effective and easier-to-use products that are preferred by
consumers and are better for the environment. As part of this
program, the Company is currently employing technology already
proven in agriculture to develop new turf varieties that could
one day require less maintenance, less water and fewer chemical
inputs to resist insects, weeds and disease.

 

6

our own research and development, we benefit from the research and development activities of our suppliers.

 

Our research and development worldwide headquarters is located at the Dwight G. Scott Research Center in Marysville, Ohio. We also have research and development facilities in the United Kingdom, France, the Netherlands and Sydney, Australia, as well as several research field stations located throughout the United States.

 

The Company’s biotechnology program is evidence of its commitment to responsible research in search of more effective and easier-to-use products that are preferred by consumers and are better for the environment. By employing technology already proven in agriculture, the Company is working to develop turf varieties that could one day require less maintenance, less water and fewer chemical inputs to resist insects, weeds and disease.

 

Before a product enhanced with biotechnology may be sold in the United States, it must be “deregulated” by appropriate governmental agencies. Deregulation involves compliance with the rules and regulations of, and cooperation with, the United States Department of Agriculture (the “USDA”), Animal and Plant Health Inspection Service, the United States Environmental Protection Agency (the “U.S. EPA”) and/or the Food and Drug Administration (the “FDA”). As part of the deregulation process for any product enhanced with biotechnology, we are required to present evidence to the USDA in the form of scientifically rigorous studies showing that the product poses no additional toxicological or ecological risk than products of the same species that have not been enhanced with biotechnology. We are also required to satisfy other agencies, such as the U.S. EPA and the FDA, as to their appropriate areas of regulatory authority. This process typically takes years to complete and also includes at least two opportunities for public comment. Therefore, any enhanced product for which we seek commercialization through submission of a petition for deregulation will be subjected to rigorous and thorough governmental regulatory review.

 

We submitted a petition for deregulation of a non-residential turfgrass product enhanced with biotechnology to the USDA on April 14, 2003. This turfgrass has been shown, through our research trials, to provide simple, more flexible and better weed control for golf courses in a manner we believe is more environmentally friendly. The USDA has a variety of options in adjudicating a petition to “deregulate” a biotechnology-derived plant product. The USDA has decided to employ the formal Environmental Impact Statement (“EIS”) process to judge the acceptability of our petition for deregulation. We welcome this process as the most thorough evaluative step available to the USDA. However, there can be no assurance our petition for deregulation of this product will be approved, or if approved and commercially introduced, this product will generate any revenues or contribute to our earnings.