Two familiar names, Dow and DuPont, will be returning to plastics and chemicals markets later this year with their own corporate identities.
DowDuPont Inc. — the merged firm created in September from industry icons Dow Chemical Co. and DuPont Co. — announced Feb. 26 that its materials spinoff will operate under the Dow name, while its specialty products division will be the new DuPont. The chemicals giant added that its agriculture division will be named Corteva Agriscience.
The new Dow will retain the Dow diamond as its brand. The company said while certain product names would change at separation, many products within each intended company would continue to be sold under their current, widely known brand names.
Describing the name selection as a “major milestone,” Ed Breen, CEO of DowDuPont, said in the release that each name “reflects the unique strengths and value proposition of the company it will represent.”
Also commenting on the development, Andrew Liveris, chairman of DowDuPont, said in the release that the spinoffs showed “the unprecedented value creation potential” of the transaction.
“We are squarely focused on unlocking enhanced cost and growth synergies, delivering on our growth investments and innovation pipeline, and separating into three industry-leading companies on the accelerated timelines we recently announced,” Liveris said.
Shortly after its formation, DowDuPont — which maintained headquarters in Dow's traditional home of Midland, Mich., and in Wilmington, Del., where DuPont had been based — announced plans for the spinoffs.
Those moves were expected to happen 18-24 months after the merger, but now are happening at a more rapid pace because of progress made. Officials also now expect cost synergies from the merger to be $3.3 billion, instead of $3 billion as first expected.
The company later announced that “certain targeted adjustments” would be made between the materials science and specialty products divisions, intended to enhance the competitive advantages of the companies.
The changes mainly consist of moving several businesses from the proposed new materials company into the proposed specialty products company. The main plastics-related businesses affected by these moves are DuPont's performance polymers unit and plastics compounder Multibase.
Performance polymers includes DuPont's production of nylon, acetal, polybutylene terephthalate, polyesters, copolyesters and related materials. Multibase is a maker of thermoplastic vulcanizates and related products based in Copley, Ohio.
DowDuPont saw its combined sales increase in 2017, even as the firm's profit slipped. The firm posted total sales of just over $79.5 billion in 2017, up more than 12 percent vs. the prior year. Profit, however, tumbled 48 percent to just under $2.8 billion.
The firm's Packaging & Specialty Plastics unit — including its massive polyethylene resin business — saw sales grow almost 13 percent to almost $22.4 billion in 2017. DowDuPont's Transportation & Advanced Polymers unit, including nylon and most of DuPont Co.'s previous performance polymers business, had 2017 sales of just over $5.1 billion, up 14 percent vs. 2016.
Packaging & Specialty Plastics was the largest of DowDuPont's seven operating units in 2017, generating 28 percent of total sales. Transportation & Advanced Polymers ranked sixth with a share of about 6.5 percent.
Geographically, the U.S. and Canada was DowDuPont's largest sales area in 2017, bringing in almost 39 percent of sales.