By: Frank Esposito
November 1, 2013
DuPont Co. plans to spin off its Performance Chemicals unit — including Teflon-brand fluoropolymer and Ti-Pure brand titanium dioxide — into a separate public company that will be owned by DuPont shareholders.
The Oct. 24 announcement comes three months after Wilmington, Del.-based DuPont said it was seeking a buyer for the unit, which generated sales of about $7 billion in 2012. Spinning off the unit "is clearly the best option," Chairman and CEO Ellen Kullman said in a news release. "This separation will result in two strong, highly competitive companies."
The separation is expected to be completed in about 18 months, officials said, which would put the date around mid-2015.
The Performance Chemicals unit has struggled in 2013, in spite of being the second-largest DuPont business, based on sales. Its third-quarter operating earnings total of $254 million was almost 40 percent less than it was in the same quarter in 2012. In the first nine months of 2013, the unit's sales fell almost 9 percent vs. the year-ago period to $5.1 billion, as operating earnings tumbled 51 percent to $769 million.
Teflon is a well-known industry name used in non-stick coatings and high-end industrial applications. TiO2 is a common whitener used in plastics and many other products.
TiO2 generated 46 percent of the unit's sales in 2012, with fluoropolymers chipping in another 17 percent. Based on those percentages and 2012 sales, DuPont's TiO2 business would have annual sales of about $3.3 billion, while fluropolymers would generate about $1.2 billion in annual sales.
DuPont also is a major producer of nylon and other specialty plastic resins, as well as specialty plastic films. Those businesses are included in the firm's Performance Materials unit, which is separate from Performance Chemicals.
On Wall Street, DuPont's per-share stock price has fared well so far in 2013. It began the year around $45 but was near $61.40 in early trading Nov. 1 for a gain of almost 40 percent.