DuPont announced this month the alignment of its businesses in five market- and technology-focused growth platforms and the creation of a textiles and interiors subsidiary (director-e News, Wednesday 13 February).
The growth platforms are: DuPont Electronic and Communication Technologies; DuPont Performance Materials; DuPont Coatings and Colour Technologies; DuPont Safety and Protection; and DuPont Agriculture and Nutrition.
Each of the five growth platforms has strong capabilities, large market opportunities and leadership focus and accountability. A priority will be to leverage across the platforms as needed for market access and technology extension.
"Consistent with our long-term strategy and direction, our growth platforms will be more tightly focused on markets and technologies. This will enable faster execution and improved capability for innovation and shareholder value creation", says DuPont chairman and CEO Chad Holliday.
The new wholly owned subsidiary, called DuPont Textiles and Interiors, will include nylon fibres, polyester fibres and Lycra brand fibre businesses, plus their intermediates and joint ventures.
DuPont will consider a full range of options for DuPont Textiles and Interiors, including an initial public offering (IPO), with the ultimate intent of separation by year-end 2003, market conditions permitting. The company has engaged Morgan Stanley to assist in the evaluation process.
"A company can operate successfully for 200 years only by continually reinventing itself", Chad Holliday says. "DuPont people in all of our businesses know this is key to a strong future.
"Each of the five growth platforms has the critical mass to pursue our strategies of integrated science, knowledge intensity and productivity improvement while capitalising on strong market positions, quality products and powerful brands.
"At the same time, our new Textiles and Interiors subsidiary will have the scale, global reach and flexibility to be highly successful in an industry undergoing fundamental structural change".
DuPont Textiles and Interiors will be the world's largest integrated fibres company with annual segment sales estimated at $6.5 billion (£4.6 billion). This represents about 23 percent of 2001 total DuPont segment sales, which includes transfers and the company's pro rata share of sales by equity affiliates.
As the global leader in product categories representing 75 percent of its revenue, DuPont Textiles and Interiors will have significant cash and earnings growth potential based on growth in key branded platforms.
These include Lycra brand fibre, Stainmaster carpet and Antron nylon carpet. There will also be significant cost reduction opportunities, a robust innovation pipeline and strong market channel access.
DuPont Textiles and Interiors will be led by DuPont executive vice president and chief operating officer Richard Goodmanson and an experienced team including group vice presidents Steve McCracken and George MacCormack.
"Our nylon, polyester and Lycra businesses have played a very important role in DuPont for many decades", Chad Holliday says. "They have served our company, our shareholders and our customers extremely well. Now, with rapidly changing industry dynamics and tough market realities, we believe the course we have chosen is necessary to allow them to succeed in the future".
Concurrent with these actions, DuPont will offset all residual costs from the separation of the DuPont Textiles and Interiors subsidiary by aggressively reducing its cost structure for corporate and support services. Leading this will be Don Johnson, group vice president - operations and services