DowDuPont has started to detail its $3 billion in planned restructuring actions, including an exit from cellulosic biofuels announced today, and told investors that the planned post-merger separation into three separate companies would take 18-24 months, up from previous estimates of 18 months.
The company also set a post-merger dividend and announced plans for a $4-billion share repurchase.The announcements were part of the company’s first post-merger earnings report, which saw pro forma operating EBITDA increased 7%, to $3.2 billion. The Dow Chemical and DuPont merger closed on 31 August.
DowDuPont maintained its $3-billion cost savings target but division targets will shift following the transfer of $8 billion in revenue from the planned materials science spin off to specialty products announced in September. The materials science division cost savings target has been set at $1.2 billion, specialty products has an $800 million target, and the agriculture target remains $1 billion. DowDuPont says it expects to achieve 70% of savings within one year and the full amount by end of year two.
The portfolio shifts have also extended the timeline for planned spin offs. The company says it is “remapping stand-and-spin timing” and evaluating steps that may allow it to accelerate the spin offs.
DowDuPont says the majority of savings will come from procurement, global workforce reductions, buildings and facilities consolidations and asset shutdowns. Asset actions include the shutdown of a legacy DuPont cellulosic ethanol plant in Nevada, Iowa as its explores a sale of the business. DowDuPont says workforce reductions will occur over a few years and will include natural attrition.
The company set a fourth-quarter dividend of 38 cts/share equivalent to the weighted average quarterly dividend of both heritage companies. The share repurchase program has no expiration date.
DowDuPont expects to record total pretax restructuring charges of about $2 billion, comprised of approximately $875 million-$975 million of severance costs; $450 million-$800 million of asset related charges, and $400 million-$450 million of costs related to contract terminations. DowDuPont said it recognized pretax charges of $180 million in the third quarter.
By Robert Westervelt
Source: Chemical Week
The investment enables the steam cracker to increase the share of renewable and recycled raw materials used in its (ethylene and propylene) production. The move supports the Borealis Strategy 2030 for a circular economy. The Porvoo investment program is expected to be completed in 2025.
Murray Auchincloss, bp’s CEO, said in a statement: “As I set out in February, BP’s destination from IOC [international oil company] to IEC [integrated energy company] is unchanged – and we need to deliver as a simpler, more focused, and higher-value company.
Founded in 1972, Tecnofilm has expanded its product portfolio over the years to offer a wider range of compounds and functional polymers for various industrial applications and technical articles. The company has patented several of its products.
