DuPont Throttling Back Plastics Production by Close to 50%
In preparation for further downslides in industries such as automotive, aerospace, oil & gas and construction, DuPont to reduce plastics production capacity.
In announcing its first quarter 2020 financial results in the first week of May, DuPont, Wilmington, Del., confirmed that it was temporarily shutting down close to 50% of its plastics production. This in anticipation of further downslides in key industries such as automotive (which accounts for about 15% of the company’s sales), aerospace, gas & oil, and construction.
Dupont executive chairman and CEO Ed Breen said that first quarter global automotive builds were down 24%, with the most recent projections of a 40% decline in this year’s second quarter. He indicated that the plan to start throttling back production or idling certain facilities—primarily manufacturing plants in DuPont’s Transportation & Industrial business segment, in order to align supply with demand was developed in first quarter. He said that segment’s profit margins would likely be reduced by 55% to 65%. This due to “the combined decline in auto builds and year-over-year price declines, as well as charges associated with plant shutdowns.” The company has not disclosed which manufacturing sites will be affected.
Summed up Breen, “DuPont has weathered many challenges and crises over its two centuries and our team is navigating this period with the benefit of our cumulative expertise. While it is still impossible to predict timing, our markets will eventually stabilize and return to growth. In the interim we are prioritizing the safety and health of our employees, safely maintaining our operations, strengthening our balance sheet, and partnering with other industry leaders to combat this pandemic. Through April, we continue to see strength in personal protection, water filtration, food and beverage, electronics and probiotics. Automotive, oil and gas, and select industrial end markets continue to suffer. We are monitoring developments across our geographies and operations on a daily basis and we will continue to adapt to the changing environment. Over the longer term, our resilient people and our operational discipline will help assure that we weather this period, deliver for our stakeholders, and emerge strong when recovery eventually begins.”
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