DuPont's Plans for Future May Include Sale
By Frank Parlato
The future of the DuPont plant in Niagara Falls and the more than 200 employees who work there is a little uncertain at this time given recent public statements from the company and information obtained by the Reporter suggesting a sale may be inevitable or even imminent.
According to a well-placed government source, DuPont-a company long associated with Niagara Falls and a major employer in the city -is expected to make an announcement shortly that may affect its Niagara Falls plant on Buffalo Avenue, which is part of their Performance Chemical Segment.
According to our source. DuPont "will not be announcing they are closing the plant or even downsizing. They already announced they are redefining their Performance Chemical Division. They are probably not going to say 'it is for sale,' but that is what it means."
Last week, DuPont announced it is "taking the next steps in its transformation to a higher growth company... (and) exploring strategic alternatives for its Performance Chemicals segment."
"That language is corporate-speak for 'it's for sale,' according to our source. "The Buffalo Avenue plant, I believe, is for sale, or soon will be"
When contacted by the Reporter, Marie Beletti, corporate media contact for DuPont, declined to comment on whether DuPont would be making any announcements relative to the Niagara Falls plant.
She referred the Reporter to the company's latest press release available on the company's website.
It reads, in part, as follows: "DuPont's transformation to a higher growth, less cyclical company that integrates its unique scientific capabilities in biology, chemistry and materials to develop ... attractive agriculture and nutrition, industrial biosciences and advanced materials markets worldwide,” makes it clear.
They are moving away from the kind of business conducted at the aging, Buffalo Ave. plant.
While once known primarily for its chemical business, the 210-year-old DuPont company has diversified and now is a global science business, veering headlong toward gentically engineered agriculture and nutrition products.
While the chemical and agricultural units are still the company's two largest units, DuPont's first quarter earnings this year showed chemical business profits fell 56%, while agricultural revenues jumped 14%.
DuPont's titanium dioxide paint pigment segment experienced a 44% drop in earnings.
DuPont Pioneer, DuPont's agriculture division, makes and sells hybrid seed and genetically modified seed, some of which becomes genetically modified food.
Genes engineered into their products provide resistance to insects, herbicides, droughts, longer shelf life, and purport to offer increase health properties.
It was strong sales of drought-resistant corn seeds in North America and Brazil, along with crop protection products in North and Latin America, that aided the company's profitability recently, and turned what would be a loss from their chemical division into an overall corporate profit and increased dividends.
Capitalizing on the near endless possibilities of genetically modified seeds and food, as it effects crop yield, sustainability and shelf life, DuPont has shown where its future lies.
With the announcement of goals they say will help "end world hunger and ensure food security" before 2021, DuPont committed $10 billion to research and development. DuPont plans to introduce 4,000 new agricultural based products by the end of 2020.
As of 2009, DuPont was among the top 10 largest chemical companies in the world. In recent years, DuPont bought nutritional supplements-maker Danisco in 2011 for $6.3 billion. In 2012, it bought out partner, Bunge Ltd., to get full ownership of Solae, LLC, a soy based ingredients company.
DuPont has modified soybeans that changes fat levels for what is claimed to be superior for health and might be euphemistically called a "super soy."
Conversely, in 2013, DuPont sold its car paint business for $5 billion to the Carlyle Group.
Last week DuPont promoted top executive James C. Collins, Jr., who led the company's Danisco acquisition integration team before heading up their Industrial Biosciences division.
He becomes senior vice president, reporting to DuPont Chair and CEO Ellen Kullman, and will oversee the Industrial Biosciences, Performance Polymers and Packaging & Industrial Polymers businesses.
Collins job is to speed up "integration of DuPont's rapidly growing and leading industrial biotechnology into its wide-ranging advanced materials businesses, as demand for renewably sourced materials expands steadily," as DuPont stated in its press release.
Matthew L. Trerotola is rejoining DuPont, as senior vice president. A previous corporate officer, Trerotola is familiar with DuPont's brands.
These two are poised to aid in the sale or packaging of all of the company's holdings of "low future outlook," performance chemical businesses, including the Niagara Falls plant.
"DuPont's consideration of strategic alternatives for its Performance Chemical segment," as the company announced last week, "may include a full or partial separation of each of these businesses from the company through a spin-off, sale or other transaction. The segment includes Titanium Technologies and Chemicals & Fluoroproducts businesses which generated total sales of $7.2 billion in 2012."
CEO Kullman said in May to stockholders that the "(short term) strong cash generation of their Performance Chemicals businesses when weighed against their cyclicality and lower (long term) growth profile," shows where this company is headed:
Sell off Performance Chemicals and concentrate on feeding the world.
Couched in monetary terms for stockholders, this is their stated mission: to find solutions "to such global challenges as providing enough healthy food for people everywhere," even if the solution is through genetically modified seed and food engineering..
Does this mean DuPont in Niagara Falls is or will be for sale?
The Reporter contacted DuPont's Peter J. Ciotta, operations public affairs regional consultant.
He confirmed that the Niagara site serves the Performance Chemicals segment
How will the recent announcement affect the Niagara Falls plant?
"It is too early to speculate," Ciotta said. "No decisions have been made. There is no set timeline for the completion of this evaluation. We continue to focus on serving our customers."
Today, there are 215 people working at the DuPont plant on Buffalo Avenue, and the jobs they hold are among the highest paid in the county.
What does the future hold?
DuPont employs more than 60,000 people worldwide.
|Niagara Falls Reporter - Publisher Frank Parlato Jr.||www.niagarafallsreporter.com||
Jul 30, 2013