DuPont Co. has idled production at several plants in its business unit that includes nylon resin.
Wilmington, Del.-based DuPont said in a May 5 news release that the firm has taken that step at several manufacturing sites, predominantly production plants within the Transportation and Industrial segment, because of the current global automotive environment.
A company spokesman on May 5 said no additional information about the closings was available. Auto production worldwide has been slowed by the impact of the COVID-19 outbreak.
"We took quick, decisive action to manage our working capital and to better align our production volumes with the demand we expect in the near term," Chairman and CEO Ed Breen said of the closings and of other actions DuPont took in the first quarter.
Market sources told Plastics News that DuPont has idled some resin production lines but that its compounding lines remain operational. Based on existing inventories, sources said that shipments of DuPont resins to customers aren't expected to be impacted by the shutdowns.
DuPont posted a loss of $610 million for the first quarter, as sales fell almost 4 percent to $5.2 billion vs. the same quarter in 2019. Sales in Transportation and Industrial dropped 13 percent to just more than $1.1 billion. Operating earnings before interest, taxes, depreciation and armortization (EBITDA) for the unit slipped 17 percent to $308 million.
In the May 5 release, officials said that first-quarter transportation unit sales volume declined 8 percent because of lower auto builds, as global automotive production was down nearly 25 percent. They added that the impact of the COVID-19 pandemic on other key industrial markets contributed to the double-digit volume declines in Mobility Solutions and Industrial and Consumer end markets.
Sales in DuPont's Safety and Construction unit, including Tyvek-brand polyethylene film, essentially were flat for the quarter at just less than $1.3 billion. The unit's operating EBITDA was down almost 2 percent to $368 million.
Tyvek is used extensively in surgical gowns and other protective garments needed to prevent the spread of COVID-19. Officials said that demand for Tyvek protective garments in the quarter led to a 55 percent increase in garment sales. DuPont also has increased global Tyvek production in response to the pandemic.
"DuPont has weathered many challenges and crises over its two centuries, and our team is navigating this period with the benefit of our cumulative expertise," Breen said. "While it is still impossible to predict timing, our markets will eventually stabilize and return to growth."
In the interim, he added, DuPont "is prioritizing the safety and health of our employees … and partnering with other industry leaders to combat this pandemic."
Through April, the firm continued to see strength in personal protection, water filtration, food and beverage, electronics and probiotics, according to Breen. Automotive, oil and gas, and select industrial end markets, however, "continue to suffer."
"Over the longer term, our resilient people and our operational discipline will help assure that we weather this period, deliver for our stakeholders and emerge strong when recovery eventually begins," Breen said.
Breen returned to the CEO role at DuPont in February, replacing Marc Doyle, who had held the post for less than a year. Breen had served as CEO starting in 2015 and had remained with the firm during its two-year merger with Dow Inc., which ended in 2019.
Like many public firms, DuPont's per-share stock price has been battered in 2020 by the effects of COVID-19. The price began the year around $64 but was near $46 in early trading May 8 for a decline of 28 percent.