Very Interesting from Dupont DuPont Co. (DD), the biggest producer of titanium dioxide pigment, is considering whether wider swings in earnings from the whitening chemical mean the business should be divested, Chief Executive Officer Ellen Kullman said.
Titanium dioxide, known by its chemical formula TiO2, is “a very strong business for us” and has an advantaged cost position at Wilmington, Delaware-based DuPont, Kullman said today in an interview with Bloomberg Television’s Betty Liu. Still, earnings volatility from TiO2, used to whiten paints and plastics, has “gotten to be pretty large,” she said.
“That is something we have to consider and continue to talk about and understand how that affects our shareholders and how that impacts the company,” Kullman said when asked about divesting the unit in the interview that airs tomorrow on “In the Loop.”
Kullman, who is also DuPont’s chairman, has forecast an earnings increase this year of 2 percent to 7 percent, less than her longterm goal of as much as 12 percent, because declining prices for TiO2 are eroding the benefit of gains in crop seeds and other businesses. She sold the slow-growing auto paint unit in February for $4.9 billion (DD).
“Our portfolio will continue to change over time as we find new ways for science to create value,” Kullman said. “Or maybe there are some places where science doesn’t have the value that it used to. Then there might be someone who values it more than we do.”
DuPont competitors Huntsman Corp., Rockwood Holdings Inc. (ROC), and Tronox Ltd. (TROX) are reviewing their TiO2 operations. Rockwood plans to sell its pigment unit by year end, Tronox is considering buying TiO2 assets, and Huntsman said April 30 that it wants to participate in the industry consolidation.
To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net
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