24 January 2002 20:24 [Source: ICIS news]
TORONTO (CNI)--DuPont Canada is making plans to use its cash reserves for acquisitions and new joint-ventures, "and we won’t wait forever," company officials said Thursday.
The company reported earlier today it has more than Can$790m ($490m/Euro554m) in cash and cash equivalents as of 31 December, out of total assets of Can$2.2bn
Dave Colcleugh, chairman, president and chief executive officer of DuPont Canada, told analysts here today: "We have been following a number of leads for acquisitions and joint-venture opportunities and have been doing so for some time, but have not yet been able to announce success."
Colcleugh would not reveal any of DuPont Canada's targets. He stressed, however, that "the priority is to use that cash for investment and growth," and added: "We won’t wait forever, … and I hope it will be sooner rather than later."
He pointed out that some cash would be used for required capital expenditures at recent small acquisitions, such as Prepac and Brookdale. DuPont acquired Prepac, a French liquid packaging firm, last year, and Vancouver-based Brookdale, a safety products firm, the year before.
DuPont Canada also will need cash as it continues to upgrade existing production and develops new markets with high growth potential in packaging, polymer processing and safety products, Colcleugh added.
Colcleugh described DuPont Canada’s business lines - nylon, performance coatings, and specialty fibres, polymers materials, and films - as a high-margin and cash rich portfolio with highly effective manufacturing assets.
Analysts at Montreal-based National Bank of Canada say DuPont Canada’s high level of liquidity continues to raise questions about its justification. "That cash would earn much more money if invested in hard assets," commented one National Bank analyst.
Mississauga, Ontario-based DuPont Canada announced its financial results for 2001 earlier today.
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