DuPont (DD) said that Mark P. Vergnano will be the new CEO of its $7 billion Performance Chemicals unit following its separation from the company, which is expected next year.
Vergnano, the incumbent Executive Vice President of DuPont, has 33 years of experience at the company. He has been overseeing the Performance Chemicals unit since 2009.
The Delaware-based company also noted that BC Chong and Thierry F.J. Vanlancker will continue to head the Titanium Technologies and Chemicals & Fluoroproducts businesses, respectively, within the Performance Chemicals segment.
Following the separation, the Performance Chemicals unit will operate as an independent, publicly traded company. Spin off of the unit is expected to complete in second-quarter 2015.
DuPont's Board, in Oct 2013, approved the spin off of the Performance Chemicals division that makes titanium dioxide (TiO2), which is used to give paint and other coatings a white hue. The company had been struggling with weak demand for TiO2, partly due to challenging economic conditions in Europe.
DuPont, earlier in 2013, also sold its performance coatings business to equity firm The Carlyle Group (CG) for $4.9 billion in cash. Moreover, the company put up its glass laminating solutions and vinyls business for sale in Nov 2013. The business is a part of its Packaging & Industrial Polymers unit.
These moves reflect a part of DuPont’s strategy to gradually shift its focus to high growth businesses, including agriculture and nutrition, in an effort to cut its exposure to low-margin businesses.
DuPont is seeing strength in its agriculture business, reflected by higher corn seeds and crop protection sales. Despite higher input costs, the Agriculture segment saw double-digit rise sales in the third quarter of 2013 boosted by higher volume and strong performance of the crop protection business, aided by the company’s acquisition of a majority stake in Pannar Seed (Pty) Limited.
DuPont is witnessing healthy demand for its corn hybrids and expects continued strong growth in crop protection driven by new products. The company has numerous new products in its pipeline that are expected to create value for its customers in the years ahead.
DuPont is a Zacks Rank #3 (Hold) stock.
Other companies in the chemical space worth considering include Johnson Matthey plc (JMPLY) and PPG Industries Inc. (PPG). While Johnson Matthey holds a Zacks Rank #1 (Strong Buy), PPG retains a Zacks Rank #2 (Buy).
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