US fund wants break-up of DuPont
Investor wants directors to change their strategy
An investor in American chemical giant DuPont, which has a large base making synthetic fibre Kevlar in Londonderry, has urged the company to break itself up.
Hedge fund Trian owns less than 3% of the company but said that DuPont executives and directors have repeatedly rejected its call for a change in strategy or representation on DuPont's board.
In a letter to the company’s board, Trian — led by co-founder and chief executive Nelson Peltz — called for two separate companies, one focused on food and nutrition, and another focused on industrial products, to provide maximum value for shareholders.
A spin-off company based at the Maydown site, Invista, now produces Lycra while the DuPont factory itself is a world leader in the production of Kevlar, which is used to make body armour, and employs around 200 people.
DuPont chief executive Ellen Kullman has so far resisted calls to break up the business, pointing to research and development discoveries which have cut across the company divisions.
A spokesman for DuPont in Northern Ireland said that the firm welcomed open communications with shareholders.
“We speak and meet with shareholders frequently, and while it is our policy not to comment on discussions with specific shareholders, we have had a constructive dialogue with Trian.
“Our board of directors and management team remain committed to executing on our strategic plan to drive growth and profitability.”
Northern Ireland economist John Simpson, who has studied the company accounts over many decades, said that the letter had helped spark healthy debate among shareholders.
“This comment stirs an otherwise long-stable functioning of DuPont,” he said. “It may only be speculative but it feels like a ‘no smoke without fire' assessment.
“In the DuPont organisation, the plant in the north west is only a small part of the total.
“However, Kevlar is an important company asset.”
He added: “As far as Northern Ireland is concerned, DuPont and Kevlar have been an important advanced process in the north west.
“The plant has quietly functioned for over 50 years and survived the Troubles. Since Kevlar is an advanced scientific product, it is interesting that the continuous updating of technology and processes has attracted little comment in recent years.
“Nevertheless, the significance of Kevlar for its strength and role in body protection still seems a world leader.”
Founded in America in 1802 by a French family, DuPont operates in 90 countries across the world and serves markets including agriculture, nutrition, electronics, safety, and protection and construction.
Over the years, DuPont has made its materials world famous and household names, such as Lycra, Nylon, Kevlar, Teflon and Neoprene.
Kevlar is also used in aeroplanes and cars and Maydown is one of only three Kevlar plants in the world.
The material has also been used in a number of Hollywood blockbusters, including the most recent series of Batman films.