PARKERSBURG - There are a lot of changes in industry and DuPont is not immune from them, the plant manager said Monday
Plant manager Karl Boelter was the featured speaker at the Parkersburg Rotary Club meeting and spoke about changes coming to the Washington Works site with the formation of a new separate company and another section that was bought by a Japanese company.
''Late last year, we had two significant announcements where DuPont announced they were spinning off a big fraction of the company and that has an impact on Washington Works,'' Boelter said. ''We also sold one of our businesses at the site and that will also have an impact on Washington Works.''
Karl Boelter, plant manager for DuPont Washington Works, speaks to the Parkersburg Rotary Club Monday on the upcoming separation of its Performance Chemicals division into a new separate company and how the sale of its Glass Laminating Solutions/Vinyl section to Kuraray Vinyl Acetate Co. in Japan will impact Washington Works. (Photo by Brett Dunlap)
In October, company officials announced DuPont will execute a full separation of its Performance Chemicals segment through a tax-free spinoff to shareholders. Performance Chemicals would become a separate publicly held company in 2015.
In November, officials announced the company agreed to sell the Glass Laminating Solutions/Vinyl section at Washington Works to Kuraray Vinyl Acetate Co. in Japan for $543 million. The deal is expected to be completed by mid-2014.
Boelter talked about how DuPont started as an explosives company when it was founded in 1802. As times changed and markets changed, the company grew into a chemical company, which led to producing polymers and energy.
Now a similar process is taking place where the company will again have to define where it is going and what its focus will be, Boelter said.
''The company is redefining itself again,'' he said. ''Washington Works is one of the largest sites for DuPont right now. The site celebrated 65 years in operation last year.''
The company has about 1,650 DuPont employees at Washington Works and 300 resident contractors who support the operation. In addition, 50-600 people work as part of a construction and other service workforce onsite.
Their annual payroll is around $120 million a year. They purchase $110 million in goods and services, not including the raw materials for their products. The site's annual property taxes are around $5 million.
''The focus going forth remains with chemistry, but also biology, genetics and industrial bio-sciences,'' Boelter said. ''That is the foundation DuPont will continue to drive its performance from.
''We are in that transformation now.''
The company will be focusing on food, energy and protection.
''What DuPont's focus is three world problems they feel they can contribute and help solve,'' Boelter said. ''Food to feed the world, energy to lower our dependence on fossil fuels and protection in keeping people and the environment safe.''
In order to focus on those concerns, DuPont is reorganizing around a set of strategic priorities that includes seeds and plant traits as well as crop protection; bio-based industrials like bio-fuels and other bio-materials; and advanced material polymers.
Boelter said these three areas can have benefits and advancements that affect the others.
''They overlap for a reason as the sciences are all connected,'' he said. ''At Washington Works we produce products that support solutions for all of these problems.
''We produce materials that support food, energy and protection.''
The Performance Chemicals segment, which makes up most of DuPont's Teflon operations, is being spun off into a separate company because it has different missions and different strengths.
''DuPont believes it can be more successful as a standalone company,'' Boelter said. ''People are investing in it for that purpose.''
The new company will include the site's industrial chemicals business, including the titanium oxide business and Teflon operations.
''It will be an industry leader when it separates and becomes a standalone company,'' Boelter said. ''It has around $7 billion in revenue. It will be in the 350 range on the Fortune 500 list.''
Separating out will allow it to adopt different strategies around its capital structure that reflect the competitive nature of the market it serves, he said, adding it will also allow the new company to make necessary investments toward its future.
Selling the Glass Laminating Solutions/Vinyl section to Kuraray was a logical step for everyone involved, he said. Kuraray has subsidiaries in more than 19 countries.
In 2012, the company earned more than $4 billion. Its products go into LCD displays, detergent pods and food packaging.
''This is very important to their business,'' Boelter said of the sale to Kuraray.
Boelter expects around 550 employees to be impacted by the changes in the two segments. However, early indications seem to say that employees at the two segments will maintain their employment.
These changes have caused a lot of anxiety throughout the whole Washington Works site, he said.
''A good portion of the site doesn't know if they are impacted or not,'' Boelter said. ''Even the people who are not impacted wonder if their business is next.''
The site will become similar to other sites around the region where more than one company occupies a site.
''It will not solely be DuPont Washington Works,'' Boelter said. ''The sustainability of the site depends on the success of each business there.
''Hopefully, these changes will be positive and will allow these businesses that are becoming part of new companies to more fully exploit their potential. In the long haul, we think that will make the site more competitive, more sustainable and ultimately improve everyone's job security,'' Boelter said.