27 June 2002 13:46 [Source: ICIS news]
WILMINGTON, Delaware (CNI)--DuPont is targeting sales growth of 2-3%/year from the nylon and polyester fibres and textiles businesses it plans to spin off.
The US group expects to spin off the businesses, currently known as DuPont Textiles and Interiors (DTI), by the end of 2003.
Richard Goodmanson, who will head up the new $6.5bn (Euro6.7bn) company, said the creation of a single business from the four DuPont units involved would be completed at the start of next year. By mid-2003, he said, all the financial work will have been done for a stock market listing. Research for a new name for the company is currently underway, he added.
The DTI business will have "industry leading margins", Goodmanson told reporters here at a press briefing to celebrate DuPont's 200th anniversary. DuPont is spinning off DTI as part of its reorganisation into five divisions: performance materials, coatings and colour technologies, agriculture and nutrition, safety and protection, and electronic and communication technologies.
The planned revenues growth would, he indicated, reverse a five-year decline in revenues for the businesses within DuPont, caused by increased competition in the spandex fibre market and the recent economic downturn. DuPont sees growth potential in air bags, home textiles, technology licensing and fibre fill, but admits it faces further erosion of its nylon business from polyester competition.
Before separation, DTI is undergoing a sharp reduction in its cost base, which will see 23% of fixed cost taken out over three years to the end of 2003. The process is already half complete and there should be no more plant shutdowns further to those announced in April.
The DTI operation will be aligned into three market focused divisions: apparel (with $2.0bn of sales), interiors and industrial ($2.2bn) and intermediates ($2.3bn), replacing the present product-based split by nylon (56% of sales), spandex (24%) and polyester (20%). By geography, the sales split is 49% in North America, 25% Europe and 22% Asia.
In future, DuPont expects Asia and especially China to play a more important role for the business, with the region taking the dominant share of capital expenditure. A purified terephthalic acid (PTA) investment in China is being considered, he confirmed, as the country offers great growth potential both through technology licensing and plant construction.
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