DuPont plans to exit paint business
New York, July 24, 2013
DuPont plans to exit its once-lucrative paint pigments business to focus on a thriving agricultural unit better equipped to shield the biggest US chemicals maker from market volatility, a report said.
DuPont's shares rose as much as six per cent to their highest in more than 13 years after the company said it would consider selling or spinning off its performance chemicals unit, which contributed a fifth of its sales last year, reported the Gulf Daily News, our sister publication.
Chief executive Ellen Kullman said DuPont's earnings would be "significantly better" in the second half of this year than in the same period last year due to agricultural growth in the Americas - reinforcing the planned exit from performance chemicals.
As prices declined, revenue within DuPont's performance chemicals unit fell 8 per cent last year.
Kullman said the company had been weighing the cash generation of the businesses against their cyclical nature and "lower growth profile".
"There is nothing science can do to arrest the volatility or the cyclicality of these businesses," she said on a conference call, adding DuPont would focus on "science-driven" businesses such as agriculture, nutrition and industrial biosciences.
"I don't think we would have seen this move about the performance chemicals business in this quarterly release without revelations about activist investors getting involved," said Key Private Bank senior equity research analyst Stephen Hoedt.
DuPont's performance chemicals unit, of which paints pigments are a big part, generated total sales of $7.2 billion in 2012. – TradeArabia News Service