CHARLESTON, W.Va. -- Operations at DuPont's Belle and Washington, W.Va., plants could be affected should company executives follow through with plans to sell or spin off the company's performance chemicals unit.
Executives with the Wilmington, Del.-based chemical giant announced they were exploring "strategic alternatives" for the company's performance chemicals unit after DuPont reported a 12 percent decline in second-quarter earnings Tuesday morning.
Those alternatives could include selling all or part of the performance chemicals segment or spinning it off into a new company.
Ellen Kullman, chairman and chief executive officer, said while the unit has generated strong cash flow, its products -- which include Teflon, fluoropolymers and titanium dioxide -- are often subject to volatility and cyclical economic effects.
"These businesses have strong market positions, differentiated products and technologies, attractive global customer bases, and they generate high cash flow," she said. "They are, however, the more cyclical and sometimes volatile businesses in DuPont's portfolio."
She said the company would prefer to focus on products that consistently deliver higher profit margins.
"By exploring strategic alternatives, we can determine what options will best drive future growth opportunities for these businesses and potentially enable our shareholders to realize higher value from these businesses," Kullman said.
Selling off the entire unit could have a significant effect on DuPont's operations in West Virginia.
Both the Washington and Belle plants, which employ a combined 2,000 workers, have operations tied to the division, Dupont Co. regional spokeswoman Robin Ollis Stemple said.
The Washington plant produces DuPont's Teflon and Tefzel fluoropolymers for the performance chemicals segment. But the Washington site also produces several other polymer products for other DuPont business units.
The Belle plant in Kanawha County also produces materials for the unit DuPont officials are looking to divest, Stemple said, as well as some materials for DuPont's agricultural products unit.
Stemple had initially said the Belle site was "completely covered" by the performance chemicals segment. However, after reviewing the plant's products further, she noted some were tied to the agricultural unit, which is currently not being reviewed for a spin off or sale.
In addition to manufacturing for DuPont, the Belle site has two tenant businesses, Praxair and Kureha, and performs toll manufacturing for Lucite International.
Stemple noted the company was still in the early phases of deciding what, if anything, it will do with the performance chemicals unit, so there was no way to know how either West Virginia plant could be affected.
"It is too early to speculate on what today's announcements mean for either site," she said.
Kullman made a similar comment during a conference call with analysts and investors Thursday morning.
"We haven't made any decisions to specifically do anything with any asset," she said.
"We are evaluating a number of alternatives and may generate more," Kullman said. "We have not reached a decision yet and have work to do, but we will not prolong the process."