DowDuPont Inc. is looking to sell its Biomaterials unit — including Sorona-brand biofiber — and several other businesses.
Wilmington, Del.-based DowDuPont confirmed those moves in a May 2 conference call after posting challenging first-quarter financial results.
On June 1, DowDuPont will split into a new DuPont materials business and Corteva, a new firm focused on agriculture. Dow Inc. split off from DowDuPont on April 2. DowDuPont had been created in 2017 from the merger of plastics and chemicals giants Dow Chemical Co. and DuPont Co.
Sorona and DowDuPont's stake in the DuPont Tate & Lyle joint venture are included in the firm's Biomaterials unit, which was one of six listed for sale by company officials on May 2.
Sorona biofibers are almost 40 percent plant based and are used in clothing, footwear and other items. DuPont Tate & Lyle makes Susterra-brand biofeedstocks — used in Sorona and other products — at a plant in Loudon, Tenn.
DowDuPont's for-sale list also included the firm's DuPont Teijin Films joint venture, one of the world's largest producers of polyester film. The sale of that unit to Indorama Ventures was announced in October 2017 but has yet to close, a company spokesman told Plastics News.
Biomaterials, DuPont Teijin Films and the four other businesses to be sold have combined annual sales of $2 billion. Those units will report results in a new non-core segment beginning in the second quarter of 2019, officials said.
"We have been very transparent about our intent to divest about 10 percent of our current portfolio, and have made great progress already on that front," specialty products Chief Operating Officer Marc Doyle said on the conference call.
"This aspect of our commitment to aggressive portfolio management allows us to remain focused on aligning our portfolio with attractive high-growth market opportunities," he added. "We will consider the full range of strategic options for these businesses with the best interest of shareholders and key stakeholders in mind."
On the call, DowDuPont CEO Ed Breen described the businesses to be sold as "volatile," but also said that they are "good assets."
"We're going to do the right thing for our shareholders," Breen added. "I would say, if I just gave you one word the way I feel about it, [these businesses] are more volatile assets that I would want in our portfolio.
"They are great businesses for someone to own. So we want to get the right price out of them."
DowDuPont's total first-quarter sales, including businesses that are now part of Dow, fell almost 9 percent to less than $19.7 billion as profit tumbled 50 percent to $571 million.
The firm's Transportation & Advanced Polymers unit, including a major nylon business, saw first-quarter sales fall almost 5 percent to $1.36 billion and pretax operating earnings slip 5 percent to $414 million.
DowDuPont's Packaging & Specialty Plastics unit — which includes a major polyethylene business and is now part of Dow — had sales drop 14.5 percent to $5.1 billion as pretax operating earnings declined almost 24 percent to $993 million.
News of DowDuPont's first-quarter results sent its per-share stock price down 6 percent to less than $35 on May 2. It was at $34.40 in early trading May 3.