DuPont Announces Restructuring Program
The company says the plan includes actions aimed at generating annual revenue growth of 6%, a target DuPont says represents a "key objective in its ongoing transformation to become a sustainable growth company." Specifics of the program will be disclosed early this year.
DuPont Chairman and CEO Charles Holliday Jr. says the company will take the actions "to remain competitive in an environment defined by sustained high-energy costs, increased global competitive intensity, and a customer base that is shifting toward emerging economies." Late last year, DuPont announced an agreement to sell INVISTA to Koch Industries Inc. for $4.4 billion.
DuPont says it will publicly disclose details on employment reductions and restructuring charges in its first-quarter 2004 earnings announcement, scheduled for April 27. The company says the moves will target staff functions, support services and manufacturing operations, including corporate costs, with details to be refined soon. Actions involving company "infrastructure" are expected to achieve $250 million in fixed cost reduction in 2004 and $500 million in 2005, the company says.
DuPont also says it will seek to boost margins by consolidating product lines by at least 20%, and optimize assets following those consolidations. In addition, the company says it will allocate greater resources toward emerging markets, with an initial focus on China. Other "areas of interest" include central and eastern Europe and Brazil.
Operationally, the company says it will "center and strengthen its market and sales-support functions," and pursue a research-and-development "revitalization process" that is already under way.
Holliday says that with the sale of INVISTA, DuPont is essentially "launching a new DuPont" that will derive growth from the company's five "growth platforms," including the DuPont Coatings and Color Technologies business.