Holliday said that the company may have to divest some businesses to focus on its fastest-growing units, such as those developing biotechnology-based products. DuPont said in December that it planned to sell its $1.49 billion drug business.
Investors are pressuring Holliday to set a clear strategy for the Wilmington, Del.-based company, saying DuPont's profits have stalled. Holliday said his company's plan is in place and that it may include “portfolio adjustments.”
“Every (DuPont) business now has a mission with specific revenue, earnings and cash objectives and we are on a march to get every business to that point by the end of 2002,” Holliday said. “There may be a few divestitures along the way and there may be a few bolt-on acquisitions.
“We don't believe we need any strategic acquisitions,” he added, referring to major purchases that would put DuPont into a new business line.
Holliday declined to be specific about the size or scope of any businesses that could be put up for sale. Some analysts have suggested DuPont divest, in part, its large commodity fiber businesses, such as the nylon or polyester units.
“Any businesses that we cannot bring scientific uniqueness to or we do not have the scale, like pharmaceuticals, to really be competitive on worldwide basis, we have to evaluate,” Holliday said.
Analysts and investors have said DuPont has not articulated a vision for company growth. In 1999, the company said it would expand its pharmaceuticals business and then said last year that it would divest the business. In addition, a plan to create a “life sciences” business, marrying agricultural biotechnology, drugs and nutrition has been shelved.
“Investors are impatient over the lack of progress,” said J.P. Morgan Chase & Co. analyst Donald Carson. “There is investor confusion about strategy.”
Holliday said his growth plan hasn't changed. He said the company intends to build its biotechnology business, which will produce new products. The company owns corn seed company Pioneer Hi-Bred International, which also develops genetically engineered crops.
DuPont invented nylon, Teflon, Dacron and Lycra. The next such innovation will be Sorona, a sugar-based polymer that can be made from corn, Holliday said. Sorona is a stretch fiber that's expected to be inexpensive to produce.
DuPont, a big producer of nylon used in carpeting, fabrics and other products, doesn't have the same sort of market scale in drugs that it has in fibers. Holliday said that convinced the company to shed the drug business.
