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January 07, 2020 02:16 PM

Q&A: Headwinds, healthy growth both on horizon for DuPont

Frank Esposito
Plastics News
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    Jeroen Bloemhard

    Last year, including K 2019, was an opportunity for DuPont Transportation & Industrial—a unit of plastics and chemicals giant DuPont Co. of Wilmington, Del.—to put its best foot forward following a merger with Dow Inc. and a planned breakup that followed which split the operations of the companies into new units.

    Plastics News caught up via email with Jeroen Bloemhard, global vice president of performance materials for DuPont T&I, to get his perspective on major topics facing the industry. Bloemhard has almost 30 years of industry experience, including more than 20 years with materials supplier Dow Corning.

    What type of growth is DuPont T&I seeing in its plastics business this year? Which end markets are performing best?

    As we go toward the end of the year, we expect ongoing headwinds in the automotive and electronics sectors, along with weaker industrial growth. Our health care and aerospace markets continue to demonstrate healthy demand, along with products from our specialty nylons business.

    Where is DuPont T&I's emphasis on new products via research and development now?

    DuPont is committed to innovation and investing in R&D to increase our customer's business impact and speed to market. The company devoted close to $1 billion to R&D last year, with about 25 percent of sales coming from new products launched within the past five years, as a percentage of company net sales. DuPont T&I has a robust innovation pipeline that is aligned to important industry megatrends for demanding applications in the areas including advanced mobility, electronics and health care.

    Advanced Mobility: We continue to develop solutions that meet industry needs for lightweighting, noise vibration harshness and thermal management. Electrification is driving the need for new materials for battery assembly while still meeting rigorous safety requirements. Our AHEAD initiative for automotive electrification supports an important industry trend. One example of the work we are doing is our thermal-conductive, heat-resistant, electrically friendly, flame-retardant and halogen-free materials that help contain, absorb or distribute heat, making batteries safer and longer lasting.

    In electronics, DuPont's material science solutions for connection technology support market trends for high-speed connections, design flexibility and miniaturization. Our high-performance applications for connectors, wire and cables, electrical components and consumer electronics are essential for the development of the electrical and electronics market and associated smart connection technologies.

    New approaches to health care are creating the need for more connected and patient-centric health care solutions. DuPont T&I is helping facilitate the next generation of pharma and medical device innovations through our broad health care material solutions and expertise. We are working closely with designers and engineers to develop health care solutions, including medical devices solutions that enable safe, convenient and effective diagnostics and pharma solutions used in biopharma processing and drug delivery systems.

    How are global economic conditions affecting DuPont T&I's plastics business? Is the firm concerned about a possible global recession?

    U.S. and China tariff issues, along with ongoing trade issues including those associated with Brexit, have caused a decline in demand for engineered plastics in China and Europe. Also impacting the current business environment are currency issues for U.S.-based companies that have strong manufacturing footprints in the U.S. with revenues being generated by sales in Europe and China.

    The possibility of a recession will be determined by multiple factors including government policies, resolution of U.S.-China tariff negotiations, recovery of the global automotive and electronics markets, consumer demand for goods and tolerance for business investments. DuPont is monitoring the global economy, and we anticipate a challenging environment in the short term.

    How is DuPont T&I working to meet its own sustainability goals or those of its customers?

    DuPont is working on innovations that will transform industries and improve lives. We are examining these issues through three strategic focus areas:

     

    • Innovations to thrive—creating sustainable solutions to society's most pressing challenges.
    • Sustainable operations—delivering world-class, end-to-end performance in safety, resource efficiency and environmental production.
    • People and well-being—enabling the health and well-being of people and communities and advance diversity and inclusion.

     

    Our sustainability strategy focuses on six key issues, which will be addressed through the three dimensions of our sustainability strategy: innovation, operational excellence, community impact and new collaborations with our business partners; Circular economy; water stewardship; climate change; health, safety, well-being of people; sustainable innovation; and product safety and transparency.

    Some key initiatives are underway toward these focus areas. Creating a circular economy for everything we produce involves working with customers and partners to enable recycled and bio-based solutions, drive innovation to extend the use life of our materials, and design waste out of our solutions and operations. DuPont has developed and introduced bio-based and post-consumer recycled content material solutions for a variety of high-performance applications. Both our heritage products and innovations are formulated with durability and long service life as prime considerations. We are actively working on reduction or reuse of water resources in our manufacturing processes, and we aim to be at 30 percent renewable energy usage in our operations by 2030.

    How does the separation from Dow affect the business?

    The outcome of the separation from Dow has been very positive. The combination of strategic specialty products from each organization's portfolio has enabled the new DuPont to be well-positioned for growth opportunities where customer collaboration and innovation are central to value creation. The integration of the portfolios is complete, and we have been successful in easing the transition for our customers. We are excited to be a stand-alone entity that offers specialized solutions: essential innovations from highly engineered products and naturally sourced ingredients to shape industries and everyday life.

    The DuPont T&I team is dedicated to transforming industries and improving lives through materials science supported by a broad portfolio that drives innovation in advanced mobility, health care, electronics, industrial and consumer goods.

    What are DuPont T&I's expectations for the plastics market in 2020 and beyond?

    In the short term, we anticipate that challenging market conditions will continue. Supply chains are adjusting inventory levels against expected lower demands and destocking has been occurring throughout the value chain. Global environmental concerns on single-use plastics and CO2 emissions will remain in focus. The automotive industry will continue to accelerate investment toward electric vehicle platforms, and our AHEAD program puts us in a strong position to meet this demand.

    Overall, we still forecast growth ahead of GDP in the mid to long term as the cost and performance benefits of plastics in critical applications remain.

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