Late last week, DuPont said it "advanced its transformation to a higher growth, higher value company as its Board of Directors authorized management to execute a full separation of its Performance Chemicals segment, which includes the Titanium Technologies and Chemicals & Fluoroproducts businesses."
The story behind the story is not a new one. Investors are tired of the volatile nature of the business, in this case pigments. In 2004, DuPont sold its textile fibers business to Koch Industries, which created Invista, which is now emerging as a major force in the global nylon business. Koch is privately owned. The Performance Coatings segment was divested earlier this year. A similar event occurred when Monsanto divested its nylon business, which is now thriving (No. 1 in nylon 6,6) as privately owned Ascend Performance Materials.
In the meantime, DuPont has been acquiring companies that fits its strategic direction, such as Danisco, a biosciences business, Unlike GE, DuPont seems to like the engineering plastics business, and will remain a major player in nylon, polyesters and elastomers. In fact, the story seems to be coming together in an interesting way at DuPont.
DuPont wants to leverage its integrated capabilities in biology, chemistry and materials science. One of the results is an ambitious drive by DuPont to use renewable feedastocks for more than half of its plastics business within 15 years. In an interview with Plastics Today, Technology VP Lewis Manring said that costs will be at least equivalent to fossil fuels, and possibly much lower depending on the future of fossil fuels. The impact on climate change will be potentially important.
DuPont CEO Ellen Kullman said: "(A) strategic priority is to build on our leadership position in the industrial biotechnology area and create transformational bio-based businesses in areas like biofuels and biomaterials. We will achieve this goal by leveraging world-class capabilities and critical enabling technology. These include designing and operating cell factories and microbial pathway engineering. The application development capability and market access of our advanced materials businesses, along with the value chain relationships and feedstock knowledge of our ag and nutrition businesses offer advantages for our success here."
DSM is also taking a highly science-based approach to improving its performance plastics business.
In the meantime, the commodity plastics business in the United States, particularly olefins, has never looked better thanks to the shale gas revolution.
It's all good news for the future of plastics.