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DuPont realigns units
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April 7, 1998: 1:23 p.m. ET
Chemical maker will reorganize to focus on long-term growth
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NEW YORK (CNNfn) - DuPont will restructure its chemicals and specialties businesses into three groupings in an attempt to focus on long-term growth, the company said Tuesday.
"Although we are an extremely successful company today, competitive reality dictates that we make fundamental changes to deliver the growth and profitability necessary to meet shareholder expectations," said DuPont Chief Executive Officer Charles O. Holliday.
DuPont said the three groups each will have different missions and financial goals.
First among equals will be DuPont's life sciences operations, which include agricultural products, pharmaceuticals and biotechnology. Holliday said it is this group that will be the "centerpiece of DuPont in the future."
The second unit will be its differentiated businesses, including Lycra brand spandex and Tyvek, a material used in protective apparel.
The third division will consist of foundation businesses, such as the company's stalwarts nylon, polyester and other polymers. These businesses provide the company's basic cash flow and tend to fund other DuPont objectives.
DuPont, whose fourth-quarter profits were hurt by the economic problems in Asia, said a new global services unit will help each group work toward greater flexibility, speed and lower unit cost.
The realignment is the first major move by Holliday, who ascended to the CEO position last October.
James Hickman, director of equity research for Credit Suisse First Boston, portrayed Holliday as a brash, relatively young (50) executive eager to put his stamp on the blue chip (DD) firm.
DuPont has been cutting costs for a number of years and is taking a more wary view of new ventures, said Hickman. "They are no longer thinking in terms of funding projects, but instead of funding businesses."
DuPont is a Wilmington, Del.-based research and technology firm, with interests in chemistry, energy and life sciences along with other chemical products.
-- by staff writer Randall J. Schultz
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DuPont
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