``Consistent with our long-term strategy and direction, our growth platforms will be more tightly focused on markets and technologies. This will enable faster execution and improved capability for innovation and shareholder value creation,'' said DuPont Chairman and CEO Charles O. Holliday, Jr.
The new wholly owned subsidiary, called DuPont Textiles & Interiors, will include the nylon fibers, polyester fibers and Lycra® brand fiber businesses, plus their intermediates and joint ventures. DuPont will consider a full range of options for DuPont Textiles & Interiors, including an Initial Public Offering (IPO), with the ultimate intent of separation by year-end 2003, market conditions permitting. The company has engaged Morgan Stanley to assist in the evaluation process.
``A company can operate successfully for 200 years only by continually reinventing itself,'' Holliday said. ``DuPont people in all of our businesses know this is key to a strong future. Each of the five growth platforms has the critical mass to pursue our strategies of integrated science, knowledge intensity and productivity improvement while capitalizing on strong market positions, quality products and powerful brands. At the same time, our new Textiles & Interiors subsidiary will have the scale, global reach and flexibility to be highly successful in an industry undergoing fundamental structural change.''
DuPont Textiles & Interiors will be the world's largest integrated fibers company with annual segment sales estimated at $6.5 billion. This represents about 23 percent of 2001 total DuPont Company segment sales, which includes transfers and the company's pro rata share of sales by equity affiliates. The subsidiary will be structured to grow shareholder value by aligning resources with market opportunity and establishing an industry-competitive cost structure. As the global leader in product categories representing 75 percent of its revenue, DuPont Textiles & Interiors will have significant cash and earnings growth potential based on growth in key branded platforms such as Lycra® brand fiber, Stainmaster® carpet and Antron® nylon carpet, significant cost reduction opportunities, a robust innovation pipeline and strong market channel access. DuPont Textiles & Interiors will be led by DuPont Executive Vice President and Chief Operating Officer Richard R. Goodmanson and an experienced team including Group Vice Presidents Steven R. McCracken and George F. MacCormack.
``Our nylon, polyester and Lycra® businesses have played a very important role in DuPont for many decades,'' Holliday said. ``They have served our company, our shareholders and our customers extremely well. Now, with rapidly changing industry dynamics and tough market realities, we believe the course we have chosen is necessary to allow them to succeed in the future.''
Concurrent with these actions, DuPont will offset all residual costs from the separation of the DuPont Textiles & Interiors subsidiary by aggressively reducing its cost structure for corporate and support services. This effort will be led by W. Donald Johnson, Group Vice President - Operations & Services. Each of the five growth platforms has strong capabilities, large market opportunities and leadership focus and accountability. A priority will be to leverage across the platforms as needed for market access and technology extension.
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