2015 Nonwovens Sales: $1.15 billion
Marc Doyle, president, DuPont Protection Technologies; Kevin Corby, global technology director, DuPont Protection Technologies
Richmond, VA (Tyvek, Hybrid Membrane Technology, HMT); Luxembourg (Tyvek, Typar); Shenzhen, China (Tyvek)
All plants are ISO 9002 certified; Luxembourg facility is also ISO9001 certified
Flashspun (Tyvek), spunbond (Typar), spunlace (HMT)
DuPont Tyvek, Tychem, Energain, Typar Major
Construction, healthcare, protective apparel, industrial filtration, absorbents, home furnishings, envelopes, geotextiles, graphics, packaging, footwear, automotive
Big changes are ahead for DuPont, the maker of Tyvek and Typar nonwovens. In December 2015, the company announced it would merge with The Dow Chemical Company following the unanimous approval of both companies’ boards of directors. Shareholders approved the merger in July and the deal, which is currently under Phase II review by the European Union, is expected to be complete by the end of this year.
The combined company will be named DowDuPont and will eventually be split into three independent, publicly traded companies through tax-free spin-offs within 18-24 months following the closing of the merger.
The companies will include a leading global pure-play Agriculture company; a leading global pure-play Material Science company; and a leading technology and innovation-driven Specialty Products company. DuPont’s Safety & Protection business, which includes its nonwovens assets, will be contained within the Specialty Products business. Each of the businesses will have clear focus, an appropriate capital structure, a distinct and compelling investment thesis, scale advantages, and focused investments in innovation to better deliver superior solutions and choices for customers, according to executives.
This transaction is a game-changer for our industry and reflects the culmination of a vision we have had for more than a decade to bring together these two powerful innovation and material science leaders,” says Andrew Liveris, Dow’s chairman and CEO. “Over the last decade our entire industry has experienced tectonic shifts as an evolving world presented complex challenges and opportunities – requiring each company to exercise foresight, agility and focus on execution. This transaction is a major accelerator in Dow’s ongoing transformation, and through this we are creating significant value and three powerful new companies. This merger of equals significantly enhances the growth profile for both companies, while driving value for all of our shareholders and our customers.”
“This is an extraordinary opportunity to deliver long-term, sustainable shareholder value through the combination of two highly complementary global leaders and the creation of three strong, focused, industry-leading businesses. Each of these businesses will be able to allocate capital more effectively, apply its powerful innovation more productively, and extend its value-added products and solutions to more customers worldwide,” says Edward Breen, chairman and CEO of DuPont. “For DuPont, this is a definitive leap forward on our path to higher growth and higher value. This merger of equals will create significant near-term value through substantial cost synergies and additional upside from growth synergies. Longer term, the three-way split we intend to pursue is expected to unlock even greater value for shareholders and customers and more opportunity for employees as each business will be a leader in attractive segments where global challenges are driving demand for these businesses’ distinctive offerings.”
Upon closing of the transaction, the combined company would be named DowDuPont and have a combined market capitalization of approximately $130 billion. Dow and DuPont shareholders will each own approximately 50% of the combined company, on a fully diluted basis, excluding preferred shares.
The transaction is expected to deliver approximately $3 billion in cost synergies, with 100% of the run-rate cost synergies achieved within the first 24 months following the closing of the transaction.
The three businesses that the boards intend to separate are:
Agriculture Company: Leading global pure-play agriculture company that unites DuPont’s and Dow’s seed and crop protection businesses. The combined entity will have the most comprehensive and diverse portfolio and a robust pipeline with exceptional growth opportunities in the near-, mid- and long-term. The complementary offerings of the two companies will provide growers across geographies with a broad portfolio of solutions and greater choice. Combined pro forma 2014 revenue for Agriculture is approximately $19 billion.
Material Science Company: A pure-play industrial leader, consisting of DuPont’s Performance Materials segment, as well as Dow’s Performance Plastics, Performance Materials and Chemicals, Infrastructure Solutions, and Consumer Solutions (excluding the Dow Electronic Materials business) operating segments. The combination of complementary capabilities will create a low-cost, innovation-driven leader that can provide customers in high-growth, high-value industry segments in packaging, transportation, and infrastructure solutions, among others with a broad and deep portfolio of cost-effective offerings. Combined pro forma 2014 revenue for Material Science is approximately $51 billion.
Specialty Products Company: A technology driven innovative leader, focused on unique businesses that share similar investment characteristics and specialty market focus. The businesses will include DuPont’s Nutrition & Health, Industrial Biosciences, Safety & Protection and Electronics & Communications, as well as the Dow Electronic Materials business. Together, their complementary offerings create a new global leader in Electronics Products, and each business will benefit from more targeted investment in their productive technology development and innovation capabilities. Combined pro forma 2014 revenue for Specialty Products is approximately $13 billion.
Turning towards its nonwovens business, DuPont’s main technology is Tyvek, which it has been making using a proprietary flashspun technology for more than 40 years. This technology continues to enjoy a leadership position in areas like construction, medical packaging and graphics and continues to expand into new areas like air cargo and lighting applications.
Within the construction market, DuPont has recently launched a line of roofing underlayments, DuPont Tyvek Protec, as part of the Tyvek family of building envelope products. Tyvek Protec is suitable for use by professional roofing and exteriors contractors in new construction or re-roofing projects as a secondary water barrier on steep-sloped roofs (2:12 or higher) under asphalt shingle, tile, metal, cedar or slate. Tyvek Protec is offered in a variety of product grades—Tyvek Protec 120, Tyvek Protec 160 and Tyvek Protec 200; each with increasing quality, durability, strength, warranty protection and UV resistance. “The walkability of Tyvek Protec is best-in-class,” says Jim Ash, global roofing market segment leader, DuPont Protection Solutions. “From the grip under foot to the grip to the roof deck, contractors will see, feel and experience the differences from other roofing underlayments the moment they install the first roll. We are excited and look forward to bringing the same high level of quality, durability, building science, support and service to those that serve the roofing industry as we have been providing to the construction industry for over 35 years.”With its industry-leading walkability, Tyvek Protec enables effective installation regardless of weather conditions—dry, wet, hot, cold or dirty. In addition, Tyvek Protec lays flat and is wrinkle-free—for ease of installation. It is easy to chalk and is available in the U.S. and in Canada from local lumber and roofing dealers.
This product is latest in DuPont’s suite of Tyvek envelope solutions which help make buildings more durable, comfortable and energy efficient. In fact, Tyvek created the building wrap category more than 30 years ago.
Meanwhile in the medical packaging segment DuPont completed a $30 million investment in improving the technology offered in this segment. Known as the company’s Medical packaging Transition Project, these efforts not only modernized the technology for Tyvek used in medical packaging but also allowed the company to create a strong foundation for growth within the medical packaging market. The project involves new line investments for its two main grades of Tyvek used in medical packaging to ensure greater continuity and flexibility of future products and the latest advancements in flash spinning technology.
As part of the project, DuPont has developed a systematic method for generating data to prove that the Tyvek produced on the new line is functionally equivalent to previous versions of Tyvek. This will help mitigate regulatory requalification and minimize costs to individual companies serving this market. Throughout this process, which began in 2011, DuPont has kept its customers constantly informed. In March 2014, DuPont issued a formal change notification letter for two grades of Tyvek giving customers at least one year before beginning the full commercialization of the new Tyvek grades.
In August 2015, DuPont’s medical packaging management team published an open letter to the industry, notifying them that DuPont completed the submissions for all regulatory reports for the project and is in the process of conducting face-to-face meetings with these regulatory bodies to review all results to date and respond to their questions.
The project hit a major milestone in October 2015 when the Center for Devices and Radiological Health (CDRH) at the U.S. Food and Drug Administration (FDA) agreed that the new grade of the flashspun nonwovens was functionally equivalent to the existing grade. The U.S. FDA affirmation allows Medical Device Manufacturers to avoid filing amended 510(k)s or PMAs when substituting transition Tyvek for current Tyvek during the manufacture of approved medical devices in most cases.
This decision signaled the beginning of commercial stage of the advanced materials.
“Receiving FDA affirmation of functional equivalence and Health Canada guidance is the culmination of years of preparation, collaboration and execution of a meticulous process,” says Michael Scholla, Ph.D., global director, Regulatory and Standards, DuPont Protection Technologies. “We would like to thank the FDA, Health Canada and all those who have participated in this process; it is a great demonstration of the power of an effective supplier-industry-government collaboration.”
In addition to Tyvek, DuPont’s other main nonwovens technology, Hybrid Membrane Technology, a version of which was purchased from a Korean partner about five years ago, goes beyond the limits of today’s semi-porous or nonwoven membranes.
Made by a proprietary new spinning process, DuPont HMT is a “membrane-like” sheet product composed of continuous sub-micron fibers with resultant sub-micron to low-micron pores and high surface area.
According to the company, HMT provides a long-awaited option to fill the performance gaps between microporous membranes and traditional nonwovens. HMT is not an electrostatically treated material and depends completely on the mechanical structure of the media, thus concerns over filtration performance over the life of the filter are alleviated.
DuPont continues to make HMT nonwovens, also known as Energain, in the energy storage market, on a pilot line in Chesterfield, VA. To date, the technology has mainly targeted the energy storage battery separator and biopharma filtration markets. However, another potential market is in apparel, where HMT is a dyeable, water resistant membrane with better breathability and textile properties than films, providing greater comfort for sports enthusiasts. As an allergen barrier, DuPont HMT provides the comfort of finely woven fabrics with the barrier performance of non-breathable films.
In June, DuPont showcased a bridal gown made from discarded Tyvek for medical packaging at the Medical Design & Manufacturing East Expo conference in New York City. Known as Bella the Bride, this sculpture was commissioned by Beacon Converters to bring attention to the recyclability of medical packaging waste.
Tyvek was selected for this project because of its widespread use throughout the healthcare industry and its ability to be recycled or recovered for repurposing. Tyvek often gains a second life in products such as plastic decking and lawn furniture. In addition to medical and pharmaceutical packaging, Tyvek is widely used for personal protective equipment, weatherization systems and envelopes.