Following what it said was a year-long “thorough strategic review,” DuPont (Wilmington, Delaware / USA; www.dupont.com) has announced plans to spin off its USD 7.2 bn (EUR 5.2 bn) Performance Chemicals division to shareholders. CEO Ellen Kullman said the separation of the business, which includes the units Titanium Technologies and Chemicals & Fluoroproducts, will take place over the next 18 months and is “clearly the best option to deliver enhanced value to shareholders.”

The split will reduce DuPont’s sales total to USD 28 bn. Kullman said the group then will have “the optimum portfolio” and will benefit from more consistent earnings growth and lower volatility. There will be no redundancies among the 7,500 employees of the yet-to-be-named spin-off, which she said will have “world-leading businesses, solid fundamentals, strong cash flow and well established positions in attractive markets.”

Chemicals & Fluoroproducts will account for 54% of the new company’s sales, Titanium Technologies for 46%. The DuPont division reported operating profit of USD 1.8 bn in 2012 but earnings in Q3 2013 were down 38% year-on-year to USD 254m on sales of USD 1.7 bn. At 56%, the year-on-year decline in Q2 was even greater.

For some time, the US group had been under pressure from Wall Street to shift its product mix more toward life science and thus bring its stock market value more closely into line with competitors such as Monsanto. In particular it was urged to divest its business with titanium dioxide (TiO₂), the pigment used as a bleaching agent for plastics.

The TiO₂ market has been dogged by poor pricing over the past two years, but recent reports suggest it is improving. DuPont, accounting for 1.1m t/y of the 5.5m t/y global market, reported a 25% upturn in volume sales in Q3 – more than double the rate of increase for Performance Chemicals as a whole.

Huntsman (The Woodlands, Texas / USA; www.huntsman.com), which in early 2014 will pay USD 1.1 bn in cash to acquire the former assets of Sachtleben and Kemira from current 100% owner Rockwood Holdings (Princeton, New Jersey / USA; www.rocksp.com) – see Plasteurope.com of 20.09.2013 – also has forecast an improvement for the business.

While small in terms of sales and volumes, fluorine chemicals are one of the traditional pillars of DuPont’s portfolio. The US group has a 15% share of the market for polytetrafluorethylene (PTFE), widely known as a component in the heat-resistant coating traded under the“Teflon” brand.