DuPont spin-off moving forward
DuPont’s Performance Chemical spin-off, announced in October, is still on track for mid-2015, according to company officials.
The company has plants in Belle and Washington, West Virginia, that house units linked to the performance chemical division.
During the Goldman Sachs Basic Materials conference in late May, DuPont Chief Financial Officer Nick Fanandakis told Forbes that the company’s spin-off was continuing as planned, but it was also considering other separation alternatives. Industrial demand for DuPont’s performance chemical division’s main product —titanium dioxide — has slowly declined in recent years.
On Wednesday, DuPont regional public affairs manager Robin Ollis Stemple said, “We are not actively considering other alternatives.”
Ollis Stemple said it’s too early to see any visible changes of the spin-off — such as company sign changes — but the spin-off is proceeding as planned.
Current DuPont vice president Mark Vergnano will be the CEO of the new, independent $7 billion Performance Chemicals company. DuPont employs about 2,000 people between the Belle and Washington plants. When asked how many of those employees work within Performance Chemical units, Ollis Stemple said the company “does not break out that number any further.”
In its second-quarter earnings report, released the last week of June, company officials scaled back their earnings outlook for 2014.
They cited lower than expected performance from its agriculture, and to a lesser extent, performance chemicals divisions. Consequently, the company lowered its full-year operating earnings outlook to $4 from $4.10 per share.
Company officials believe the agriculture decline is short-term.
“We have a unique opportunity now to reset our operating model to optimize both our effectiveness and efficiency, consistent with the purpose, strategy and needs of DuPont in 2015 and beyond,” DuPont Chief Executive Ellen Kullman stated in the earnings report.
The company expects to spend about $270 million on the restructuring.
“Together, all of these efforts will contribute to at least $1 billion in savings by the end of 2019 from a 2013 baseline —two thirds by the end of 2015 on a run-rate basis and the final third occurring between 2016 and 2019,” Kullman stated in the release.
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