IHS: DuPont Performance Chemicals Spin-Off Would Foster Stable Growth
DuPont’s July 2013 announcement that it is exploring options to sell or spin-off its $7 billion per-year Performance Chemicals business unit as part of its transformation to a “higher growth, less cyclical company,” is a bold, but necessary, strategic move by company leadership, according to new analysis by IHS Chemical.
The move, IHS says, allows DuPont to refocus its resources on core businesses in agriculture and nutrition, as well as bio-based and advanced materials, where DuPont has a carved a scientific niche, and businesses that offer both higher margin potential and a more consistent revenue stream.
“The planned sale or spin-off of DuPont’s Performance Chemicals unit is expected to be one of industry’s largest ever M&A transactions and the biggest since the onset of the financial crisis,” said Bill Brophy, managing director, global specialty chemicals for IHS Chemical Consulting and principal author of the IHS Chemical report on DuPont’s Performance Chemicals. “This is a smart move by DuPont executives, who are playing to the company’s strengths by refocusing its portfolio on higher value products where they have a technical or market advantage — products that offer a more stable revenue stream in long-term, growth-oriented markets.”
DuPont’s Performance Chemical products include titanium dioxide technologies, fluorochemicals and fluoropolymers, sulfuric acid, sodium cyanide, hydrogen cyanide, aniline, methylamines and dimethyl ether. Key end markets include plastics and coatings, textiles, mining, pulp and paper, water treatment and health care.
For more information, visit www.ihs.com.