Du Pont Company, America's largest chemical company, has decided to cancel or postpone over $600 million of planned nylon projects. The reason: the chemicals group is transforming itself into a biotech company.
The cuts in Du Pont's nylon business projects will happen in the Asia-Pacific region. The charge also includes a write-down of DuPont's. The company has written down its adipic acid plant in Singapore. However, it will continue to run this plant since it makes a key input used in nylon production.
The move away from the nylon projects is part of the overall restructuring announced this year, which will reshape the company into a biotech and life-sciences company. In July 1999 the company announced lay-offs and redeployment of 1,300 out of 15,000 employees in order to consolidate its coatings business.
In August 1999 DuPont completed its divestment of Conoco Inc, the oil and gas company it had taken over for $7.6 billion in 1981, when crude prices were rising, with a view to assuring supplies for its chemical plants.
Analysts are bullish about DuPont's restructure. They believe the company should exit the commodity nylon and polyester fibre businesses, since these are volatile, low-return businesses.