After months of exploring options, management at DuPont Co. announced last week they have decided to spin off the chemical giant's Performance Chemicals unit into a separate company.
While the spinoff will likely affect production at the company's two West Virginia plants -- located in Kanawha and Wood counties -- a DuPont spokeswoman said Friday the company will still maintain operations in the state following the split.
The Wilmington, Del.-based company has been under pressure from some shareholders this year to reorganize and trim down its operations.
While the company has seen significant growth in its agricultural products business, its Performance Chemicals unit, which produces pigments, refrigerants and Teflon non-stick coatings, has lagged due to price pressures and sluggish growth in the overall economy.
In July, DuPont officials announced they were exploring strategic alternatives for the unit. During the company's earnings conference call last week, chairwoman and CEO Ellen Kullman said officials were moving with a "sense of urgency" to reach a decision.
Kullman announced late Thursday evening the company's board of directors had voted to approve a spinoff of the unit.
"This separation will advance the transformation of DuPont and result in two strong, highly competitive companies," Kullman said in a company press release.
About 7,500 of DuPont's 65,000 employees around the world work for the unit. Performance Chemicals contributed $7.2 billion to the company's $35 billion in sales last year, and accounted for 29 percent of its $6.3 billion in operating earnings.
Kullman said the split would allow DuPont to have more consistent earnings with sustained growth and lower volatility.
Though its products are more tied to global economic cycles, the spun-off Performance Chemicals unit will feature strong cash flow driven by low-cost processes and efficient productivity.