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DuPont to sell Neoprene unit to Japanese firm

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WILMINGTON, Del.—DuPont Performance Polymers has signed a definitive agreement to sell its Neoprene polychloroprene business to Denka Performance Elastomer L.L.C., a joint venture between Denka Kagaku Kogyo K.K. and Mitsui & Co. Ltd.

The transaction is expected to close in the first half of 2015, pending customary regulatory appro-vals.

DuPont said financial terms are not being disclosed.

Patrick Linder, president of DuPont Performance Polymers, said in an email that the 235 affected employees will be offered employment by Denka when the transaction closes. The firm produces Neoprene in North America at its Pontchartrain Works facility in La Place, La.

DuPont said it does not disclose capacity figures for its production facilities.

Linder said DuPont's strategic priorities are to extend its leadership in the agriculture-to-food value chain, developing world-leading industrial biotechnology capabilities and grow its advanced materials.

Neoprene sales comprised less than 5 percent of DuPont Performance Polymers' revenues in 2013, he said.

“The decision to sell Neoprene is consistent with DuPont's strategy to position itself as a higher growth and higher value company,” the executive said in the email. “After a careful review, we have determined that Neoprene is not aligned with those strategic priorities and that the full potential for Neoprene will be best realized outside of DuPont.”

Neoprene was invented by DuPont in 1931, according to the firm's website, and is a synthetic rubber used in many chemical and weather-resistant applications today. It was originally used as an oil-resistant replacement for natural rubbers and is now used as a base resin in adhesives, electrical insulation and coatings.

“We are excited to welcome Neoprene and the employees who manage this product. Chloroprene rubber is our core business and the acquisition from DuPont will largely contribute to our further sustainable growth,” Shinsuke Yoshitaka, Denka president and CEO, said in a statement.

“Also, Denka can establish a flexible supply structure with high quality products. Furthermore, we expect to enjoy synergies with our research and development and technical services, which are our strengths. I believe that these positive effects will enable us to serve the market and the customers much better.”

Denka Performance Elastomer is a newly formed joint venture in which Tokyo-based Denka owns 70 percent and Mitsui, also based in Tokyo, owns the remaining 30 percent. The joint venture was established as a result of its acquisition of DuPont's Neoprene business.

Denka manufacturers and distributes chemical products encompassing chloroprene rubber, organic and inorganic materials, polymer processing, electronic materials and pharmaceuticals. According to its website it operates 10 other manufacturing facilities, six in Japan, three in Singapore and one in China.

Denka has one other polychloroprene plant, in Omni, Japan, which produces the material using the acetylene method. Denka said the plant opened in 1962 and currently supplies 80 countries. In 2010, the firm increased its polychloroprene rubber production to 100,000 metric tons.

According to Denka, DuPont manufactures polychloroprene using the butadiene method and supplies North America, South America and Europe.

Mitsui, a Japanese general trading company, operates 142 offices in 66 countries.