DuPont

E. I. du Pont de Nemours and Company
Type Public
(NYSE: DD (common stock), NYSE: DDPRB (preferred stock), NYSE: DDPRA)
Dow Jones Industrial Average Component
S&P 500 Component
Industry Chemicals - Plastics & Rubber
Founded 1802
Eleutherian Mills
Wilmington, Delaware, U.S.
Headquarters Wilmington, Delaware
Key people Ellen J. Kullman, President, Chairman and CEO
Nick C. Fanandakis, CFO
Thomas M. Connelly, CTO
Products Neoprene, Nylon resins, Teflon, Delrin, Mylar, Kevlar, Nomex, Zemdrain, Corian, Tyvek and Nafion
Revenue increase US$26.1 Billion (FY 2009)[1]
Operating income increase US$1.58 Billion (FY 2009)[1]
Net income increase US$1.75 Billion (FY 2009)[1]
Total assets increase US$38.2 Billion (FY 2009)[2]
Total equity increase US$7.22 Billion (FY 2009)[2]
Employees 58,000 (2009)
Website www.dupont.com

E. I. du Pont de Nemours and Company (NYSE: DDPRA, NYSE: DDPRB, NYSE: DD), commonly referred to as DuPont or Du Pont, is an American chemical company that was founded in July 1802 as a gunpowder mill by Eleuthère Irénée du Pont. DuPont is currently the world's second largest chemical company (behind BASF) in terms of market capitalization and fourth (behind BASF, Dow Chemical and Ineos) in revenue. Its stock price is a component of the Dow Jones Industrial Average.

In the 20th century, DuPont led the polymer revolution by developing many highly successful materials such as Vespel, neoprene, nylon, Corian, Teflon, Mylar, Kevlar, Zemdrain, M5 fiber, Nomex, Tyvek, Sorona and Lycra. DuPont has also been significantly involved in the refrigerant industry, developing and producing the Freon (CFCs) series and later, more environmentally friendly refrigerants. In the paint and pigment industry, it has created synthetic pigments and paints, such as ChromaFlair.

DuPont is often successful in popularizing the brands of its material products such that their trademark names become more commonly used than the generic or chemical word/s for the material itself. One example is “neoprene”, which was intended originally to be a trademark but quickly came into common usage.

Contents

History

Original DuPont powder wagon

1802

DuPont was founded in 1802 by Eleuthère Irénée du Pont, using capital raised in France and gunpowder machinery imported from France. The company was started at the Eleutherian Mills, on the Brandywine Creek, near Wilmington, Delaware, USA two years after he and his family left France to escape the French Revolution. It began as a manufacturer of gunpowder, as du Pont had noticed that the industry in North America was lagging behind Europe and saw a market for it. The company grew quickly, and by the mid 19th century had become the largest supplier of gunpowder to the United States military, supplying as much as half of the powder used by the Union Army during the American Civil War. (The Eleutherian Mills site was declared a National Historic Landmark in 1966 and is now a museum covering this history that may be visited today.)

1902 to 1912

Working powder mills on Brandywine Creek, about 1905. Note the handwritten "These blow up occasionally, and then?"

DuPont continued to expand, moving into the production of dynamite and smokeless powder. In 1902, DuPont's president, Eugene du Pont, died, and the surviving partners sold the company to three great-grandsons of the original founder. The company subsequently purchased several smaller chemical companies, and in 1912 these actions gave rise to government scrutiny under the Sherman Antitrust Act. The courts declared that the company's dominance of the explosives business constituted a monopoly and ordered divestment. The court ruling resulted in the creation of the Hercules Powder Company (now Hercules Inc.) and the Atlas Powder Company (purchased by Imperial Chemical Industries (ICI) and now part of AstraZeneca).[3] At the time of divestment, DuPont retained the single base nitrocellulose powders, while Hercules held the double base powders combining nitrocellulose and nitroglycerine. DuPont subsequently developed the Improved Military Rifle (IMR) line of smokeless powders.[4]

DuPont also established two of the first industrial laboratories in the United States, where they began the work on cellulose chemistry, lacquers and other non-explosive products. DuPont Central Research was established at the DuPont Experimental Station, across the Brandywine Creek from the original powder mills.

1914

In 1914, Pierre S. du Pont invested in the fledgling automobile industry, buying stock of General Motors (GM). The following year he was invited to sit on GM's board of directors and would eventually be appointed the company's chairman. The DuPont company would assist the struggling automobile company further with a $25 million purchase of GM stock. In 1920, Pierre S. du Pont was elected president of General Motors. Under du Pont's guidance, GM became the number one automobile company in the world. However, in 1957, because of DuPont's influence within GM, further action under the Clayton Antitrust Act forced DuPont to divest itself of its shares of General Motors.

1920

In the 1920s DuPont continued its emphasis on materials science, hiring Wallace Carothers to work on polymers in 1928. Carothers discovered neoprene, the first synthetic rubber, the first polyester superpolymer and in 1935, nylon. Discovery of Lucite and Teflon followed a few years later. 1935 was also the year that DuPont first introduced the chemical phenothiazine as an insecticide.

Second World War

Throughout this period, the company continued to be a major producer of war supplies. As the inventor and manufacturer of nylon, DuPont helped produce the raw materials for parachutes, powder bags,[5] and tires.[6] DuPont also played a major role in the Manhattan Project in 1943, designing, building and operating the Hanford plutonium producing plant and the Savannah River Plant in South Carolina.

1950 to 1970

After the war, DuPont continued its emphasis on new materials, developing Mylar, Dacron, Orlon and Lycra in the 1950s, and Tyvek, Nomex, Qiana, Corfam and Corian in the 1960s. DuPont materials were critical to the success of the Apollo Space program.

DuPont has been the key company behind the development of modern body armour. In the Second World War DuPont's ballistic nylon was used by Britain's Royal Air Force to make Flak jackets. With the development of Kevlar in the 1960s, DuPont began tests to see if it could resist a lead bullet. This research would ultimately lead to the bullet resistant vests that are the mainstay of police and military units in the industrialized world.

1981 to 1995

In 1981, DuPont acquired Conoco Inc., a major American oil and gas producing company that gave it a secure source of petroleum feedstocks needed for the manufacturing of many of its fibre and plastics products. The acquisition, which made DuPont one of the top ten U.S.-based petroleum and natural gas producers and refiners, came about after a bidding war with the giant distillery Seagram Company Ltd., which would become DuPont's largest single shareholder with four seats on the board of directors. On April 6, 1995, after being approached by Seagram Chief Executive Officer Edgar Bronfman, Jr., DuPont announced a deal whereby the company would buy back all the shares owned by Seagram.

1999

In 1999, DuPont sold all of its Conoco shares, the business merging with Phillips Petroleum Company. That year, CEO Chad Holliday switched the company's focus towards producing DuPont chemicals from living plants rather than processing them from petroleum.

Current activities

DuPont describes itself as a global science company that employs more than 60,000 people worldwide and has a diverse array of product offerings.[7] In 2005, the Company ranked 66th in the Fortune 500 on the strength of nearly $28 billion in revenues and $1.8 billion in profits.[8]

DuPont businesses are organized into the following five categories, known as marketing "platforms": Electronic and Communication Technologies, Performance Materials, Coatings and Color Technologies, Safety and Protection, and Agriculture and Nutrition.

In 2004 the company sold its textiles business, which included some of its best-known brands such as Lycra (Spandex), Dacron polyester, Orlon acrylic, Antron nylon and Thermolite, to Koch Industries. DuPont also manufactures Surlyn, which is used for the covers of golf balls, and, more recently, the body panels of the Club Car Precedent golf cart.

DuPont has its R&D facilities located in China, Japan, Taiwan, India, Germany and Switzerland with an average investment of $1.3 billion annually in a diverse range of technologies for many markets including agriculture, genetic traits, biofuels, automotive, construction, electronics, chemicals and industrial materials. DuPont employs more than 5,000 scientists and engineers around the world.[9]

Locations

The company’s corporate headquarters are located in Wilmington, Delaware. The company’s manufacturing, processing, marketing and research and development facilities, as well as regional purchasing offices and distribution centers are located throughout the world.[10] Major manufacturing sites include the Spruance plant near Richmond, Virginia (currently the company's largest plant), the Bayport plant near Houston, Texas, the Mechelen site in Belgium, and the Changshu site in China.[11]. Other locations include the Yerkes Plant on the Niagara River at Tonawanda, New York , and even in deepwater New Jersey

Corporate governance

Current board of directors

The board of directors elected Ellen J. Kullman president and a director of the company with effect from October 1, 2008, Chief Executive Officer with effect from January 1, 2009,[12] and Chairman effective December 31, 2009.[13][14]

Environmental record

Researchers at the Political Economy Research Institute of the University of Massachusetts Amherst ranked DuPont as the largest corporate producer of air pollution in the United States.[15] The study found DuPont's most toxic pollution comprised chloroprene (855,370 lb/yr, 387,989 kg/yr), sulfuric acid (804,501 lb/yr, 364,916 kg/yr), and chlorine (65,088 lb/yr, 29,523 kg/yr) based on Toxics Release Inventory data. The most massive releases came in the form of more than 4 million pounds (1,800 t) of carbonyl sulfide followed by 2 million pounds (900 t) of hydrochloric acid.[16]

In 2005, BusinessWeek magazine, in conjunction with the Climate Group, ranked DuPont as the best-practice leader in cutting their carbon gas emissions.[17][18] They pointed out that DuPont reduced its greenhouse gas emissions by more than 65% from the 1990 levels while using 7% less energy and producing 30% more product. May 24, 2007 marked the opening of the US$2.1 million DuPont Nature Center at Mispillion Harbor Reserve, a wildlife observatory and interpretive center on the Delaware Bay near Milford, Delaware, USA. DuPont contributed both financial and technological support to create the center, as part of its "Clear into the Future" initiative to enhance the beauty and integrity of the Delaware Estuary. The facility will be state-owned and operated by the Delaware Department of Natural Resources and Environmental Control (DNREC).[19][20] DuPont is a founding member of the World Business Council for Sustainable Development with DuPont CEO (at the time) Chad Holliday being Chairman of the WBCSD from 2000–2001.

Positive recognition

DuPont has been awarded the National Medal of Technology four times: first in 1990, for its invention of "high-performance man-made polymers such as nylon, neoprene rubber, "Teflon" fluorocarbon resin, and a wide spectrum of new fibers, films, and engineering plastics"; the second in 2002 "for policy and technology leadership in the phaseout and replacement of chlorofluorocarbons". Additionally, DuPont scientist George Levitt was honored with the medal in 1993 for the development of sulfonylurea herbicides—environmentally friendly herbicides for every major food crop in the world. In 1996, DuPont scientist Stephanie Kwolek was recognized for the discovery and development of Kevlar.

Controversies

Hemp

Hemp paper threatened DuPont's monopoly on the necessary chemicals for manufacturing paper from trees and hemp fiber cloth would compete with Nylon, a synthetic fibre, that was patented in 1938, the year hemp was made illegal.[21][22] It is often asserted in pro-cannabis publications that DuPont actively supported the criminalization of the production of hemp in the US in 1937 through private and government intermediates, and alleged that this was done to eliminate hemp as a source of fiber—one of DuPont's biggest markets at the time. DuPont denies allegations that it influenced hemp regulation.

Behind the Nylon Curtain

In 1974, Gerard Colby Zilg, wrote Du Pont: Behind the Nylon Curtain, a critical account of the role of the DuPont family in American social, political and economic history. The book was nominated for a National Book Award in 1974.

A du Pont family member obtained an advance copy of the manuscript and was “predictably outraged”. A DuPont official contacted The Fortune Book Club and stated that the book was “scurrilous” and “actionable” but produced no evidence to counter the charges. The Fortune Book Club (a subsidiary of the Book of the Month Club) reversed its decision to distribute Zilg's book. The editor-in-chief of the Book of the Month Club declared that the book was “malicious” and had an “objectionable tone”. Prentice-Hall removed several inaccurate passages from the page proofs of the book, and cut the first printing from 15,000 to 10,000 copies, stating that 5,000 copies no longer were needed for the book club distribution. The proposed advertising budget was reduced from $15,000 to $5,000.

Zilg sued Prentice-Hall (Zilg v. Prentice-Hall), accusing it of reneging on a contract to promote sales.

The Federal District Court ruled that Prentice Hall had "privished" the book (the company conducting an intentionally inadequate merchandising effort) and breached its obligation to Zilg to use its best efforts in promoting the book because the publisher had no valid business reason for reducing the first printing or the advertising budget. The court also ruled that the DuPont Company had a constitutionally protected interest in discussing its good faith opinion of the merits of Zilg's work with the book clubs and the publisher, and found that the company had not engaged in threats of economic coercion or baseless litigation.

The United States Court of Appeals for the Second Circuit overturned the damages award in September 1983. The court stated that, while DuPont's actions “surely” resulted in the book club's decision not to distribute Zilg's work and also resulted in a change in Prentice-Hall's previously supportive attitude toward the book, DuPont's conduct was not actionable. The court further stated that the contract did not contain an explicit “best efforts” or “promote fully” promise, much less an agreement to make certain specific promotional efforts. Printing and advertising decisions were within Prentice-Hall's discretion.

Zilg lost a Supreme Court appeal in April 1984.

In 1984 Lyle Stuart re-released an extended version, Du Pont Dynasty: Behind the Nylon Curtain.[23]

Chlorofluorocarbons

Along with Thomas Midgley (working under Charles Kettering of General Motors), DuPont was the inventor of CFCs (chlorofluorocarbons), and the largest producer of these ozone-depleting chemicals (used primarily in aerosol sprays and refrigerants) in the world, with a 25% market share in the late 1980s.

In 1974, responding to public concern about the safety of CFCs,[24] DuPont promised through newspaper advertisements and congressional testimony to stop production of CFCs should they be proven to be harmful to the ozone layer. On March 4, 1988, U.S. Senators Max Baucus (D-Mont.), David Durenberger (R-Minn.), and Robert T. Stafford (R-Vt.) officially wrote to DuPont, in their capacity as the leadership of the Congressional subcommittee on hazardous wastes and toxic substances, asking the company to keep its promise to completely stop CFC production (and to do so for most CFC types within one year) in light of the 1987 international Montreal Protocol for the global reduction of CFCs (signed for the United States by President Ronald Reagan). The Senators argued that “DuPont has a unique and special obligation” as the original developer of CFCs and the author of previous public assurances made by the company regarding the safety of CFCs. DuPont's response was that the senatorial demand was more drastic than the scientific evidence warranted, and that alternative chemicals were only in their infancy.

In a dramatic turnaround on March 24, 1988, DuPont announced that it would begin leaving the CFC business entirely after a March 15 NASA announcement that CFCs were not only creating a hole in the ozone layer above Antarctica but also thinning the layer elsewhere in the world. Patrick Hossay argues in his book Unsustainable that DuPont "had begun researching substitutes for CFCs in the 1970s when sales began to slump. Because the company moved on alternatives to CFCs before its competitors, any ban on their use would give the company a sharp advantage."[25]

DuPont announced that it would stop selling CFCs with a full page advertisement in the April 27, 1992 New York Times stating “we will stop selling CFCs as soon as possible, but no later than year end 1995 in the US and other developed countries.”[26]

Lewis du Pont Smith, in an April 27, 1994, open letter to shareholders on DuPont’s CFC Policy, warns that DuPont Corporation will be destroyed when a consumer backlash demands a Congressional investigation “regarding the science behind the ozone depletion fraud and the economic forces that pushed for the CFC ban”, which he called “the most massive consumer fraud of this century”, warning that “The cost to consumers of the ban on CFCs will exceed $5 trillion: the consequences on human health will be devastating.” Eight years before, Lewis du Pont Smith had been declared mentally incompetent to handle his affairs after he gave hundreds of thousands of dollars to Lyndon LaRouche.[27][28]

In later years, DuPont would maintain that the company had taken the initiative in phasing out CFCs[29] and in replacing CFCs with a new generation of refrigerant chemicals, such as HCFCs and HFCs.[30] In 2003, DuPont was awarded the National Medal of Technology, recognizing the company as the leader in developing CFC replacements.

PFOA (C8)

DuPont has faced fines from the U.S. Environmental Protection Agency‎ and litigation over releases of the Teflon processing aid perfluorooctanoic acid (PFOA, also known as C8) from their works in Washington, West Virginia.[31] PFOA contaminated drinking water led to increased levels in the bodies of residents in the surrounding area. The court-appointed C8 Science Panel is investigating "whether or not there is a probable link between C8 exposure and disease in the community."[32] The C8 Science Panel started releasing data in October 2008 and linked high cholesterol but not diabetes to exposure.[33] DuPont has also faced U.S. Securities and Exchange Commission (SEC) filings from the shareholder group DuPont Shareholders for Fair Value over the company's transparency regarding the chemical.[34]

DuPont has agreed to sharply reduce its output of PFOA,[35] and was one of eight companies to sign on with the USEPA's 2010/2015 PFOA Stewardship Program. The agreement calls for the reduction of "facility emissions and product content of PFOA and related chemicals on a global basis by 95 percent no later than 2010 and to work toward eliminating emissions and product content of these chemicals by 2015."[36] However, questions remain if the biological effects to people from this chemical translate into health effects.

NASCAR sponsorship

DuPont is widely known for its sponsorship of NASCAR driver Jeff Gordon and his Hendrick Motorsports #24 Chevrolet Impala. DuPont has been sponsoring Jeff Gordon since he began in Sprint Cup (then Winston Cup) in 1992. DuPont has said this about their sponsorship:

Our sponsorship of Jeff Gordon helps keep DuPont brands and products in the public eye. Branding is a key component of the DuPont knowledge intensity strategy for achieving sustainable growth.[37]

In 2009, DuPont, Jeff Gordon, and Hendrick Motorsports celebrated their 17th season together. It is currently the longest driver/sponsor/owner combination in NASCAR.

See also

References

  1. ↑ 1.0 1.1 1.2 E.I. du Pont de Nemours & Company (DD) annual SEC income statement filing via Wikinvest
  2. ↑ 2.0 2.1 E.I. du Pont de Nemours & Company (DD) annual SEC balance sheet filing via Wikinvest
  3. ↑ The DuPont Company. Delaware Historical Society. http://www.hsd.org/DHE/DHE_what_industry_DuPont.htm. Retrieved 2006-03-29. 
  4. ↑ Davis, William C., Jr. Handloading (1981) National Rifle Association ISBN=0-935998-34-9 pp.31-33
  5. ↑ "Hosiery Woes" Business Week, February 7, 1942, pp. 40-43
  6. ↑ "Nylon in Tires", Scientific American, August 1943, p 78
  7. ↑ DuPont–Company at a Glance. Retrieved on March 29, 2006
  8. ↑ http://money.cnn.com/magazines/fortune/fortune500_archive/full/2005/ Fortune 500: 1955–2006. CNNMoney.com. Retrieved on May 16, 2007.
  9. ↑ DuPont Knowledge Center in Hyderabad, India, Opens today
  10. ↑ "2009 SEC 10-K". http://www.sec.gov/Archives/edgar/data/30554/000089322009000276/w72619e10vk.htm. Retrieved 2008-02-12. 
  11. ↑ "Spruance Site: About Our Plant". Dupont. http://www2.dupont.com/Spruance/en_US/about.html. Retrieved 16 Jan 2010. 
    "2008 Dupont: CEFIC European Responsible Care® Award 2008: Application Form". European Chemical Industry Council. http://www.cefic.be/Files/Downloads/DuPont_Belgium.pdf. Retrieved 16 Jan 2010. 
    "United States Securities and Exchange Commission: Form 10-K". Analist.nl Nederland/Hoofdkantoor. 2008. p. 10–11. http://www.analist.be/reports/du_pont-2008.pdf. Retrieved 16 Jan 2010. 
  12. ↑ "DuPont: Investor Center - News Release". phx.corporate-ir.net. http://phx.corporate-ir.net/phoenix.zhtml?c=73320&p=irol-newsArticle&ID=1199778&highlight=. Retrieved 2008-09-23. 
  13. ↑ "DuPont names Ellen Kullman as chair - MarketWatch". www.marketwatch.com. http://www.marketwatch.com/story/dupont-names-ellen-kullman-as-chair-2009-10-30-95560. Retrieved 2009-11-06. 
  14. ↑ "DuPont's Board of Directors Appoints Ellen Kullman Chair". www.prnewswire.com. http://www.prnewswire.com/news-releases/duponts-board-of-directors-appoints-ellen-kullman-chair-67562822.html. Retrieved 2009-11-06. 
  15. ↑ Political Economy Research Institute Toxic 100 retrieved Aug 13, 2007
  16. ↑ Toxic 100 company profile
  17. ↑ Unknown Author (December 6, 2005). "DuPont Tops BusinessWeek Ranking of Green Companies". GreenBiz News. http://www.greenbiz.com/news/news_third.cfm?NewsID=29319&CFID=7761904&CFTOKEN=10637155. 
  18. ↑ Green Leaders Show The Way Business Week
  19. ↑ "State’s DuPont Nature Center at Mispillion Harbor Reserve Opens"
  20. ↑ "DuPont Nature Center Dedicated in Delaware"
  21. ↑ [Hemp & the Marijuana Conspiracy:] The Emperor Wears No Clothes by Jack Herer, various editions.
  22. ↑ The Elkhorn Manifesto: Shadow of the Swastika by R. William Davis
  23. ↑ Unknown Author (April 17, 1984). "High Court Rebuffs Author". The New York Times: Section C; Page 16, Column 1. ; Flaherty, Francis J. (April 2, 1984). "Authors Fighting for 'Voice in the Process'". The National Law Journal: 26. ; Unknown Author (April 1984). "Federal Court of Appeals reverses award of damages to author Gerard Zilg in his breach of contract action against Prentice-Hall; District Court's dismissal of Zilg's action against E.I. du Pont de Nemours and Company for tortious interference with contractual relations is affirmed". Entertainment Law Reporter 5 (11). ; Slung, Michele (October 9, 1983). ""Privish" and Perish". The Washington Post: 15. 
  24. ↑ DuPont Refrigerants–History Timeline, 1970. (URL accessed March 29, 2006).
  25. ↑ Hossay, Patrick. Unsustainable. Zed Books, 2006 p. 200.
  26. ↑ Unknown Author (April 27, 1992). "The World is Phasing Out CFCs, It Won't Be Easy" ( – 27, 1992&as_yhi=April 27, 1992&btnG=Search Scholar search). The New York Times: A7. http://upload.wikimedia.org/wikipedia/en/e/e8/Dupont.jpg. 
  27. ↑ Should You Leave It All to the Children? - September 29, 1986
  28. ↑ Du Pont Millions at Issue In an Heir's Sanity Case - New York Times
  29. ↑ DuPont Refrigerants– History Timeline, 1980. (URL accessed March 29, 2006).
  30. ↑ US EPA: Ozone Depletion Glossary. (URL accessed March 29, 2006).
  31. ↑ Clapp, Richard; Hoppin, Polly; Jagai, Jyotsna; Donahue, Sara: "Case Studies in Science Policy: Perfluorooctanoic Acid" Project on Scientific Knowledge and Public Policy (SKAPP). Accessed October 25, 2008.
  32. ↑ C8 Science Panel: "The Science Panel" Accessed October 25, 2008.
  33. ↑ Scott Finn: "C8 study shows link with high cholesterol" West Virginia Public Broadcasting (October 16, 2008). Accessed October 25, 2008.
  34. ↑ United Steelworkers: "DuPont Shareholders for Fair Value Calls on SEC to Investigate DuPont" 2005 Releases and Advisories. (May 24, 2005). Accessed October 25, 2005.
  35. ↑ Renner, Rebecca: "Scientists hail PFOA reduction plan" Environmental Science & Technology Online. Policy News. (March 25, 2005). Accessed October 25, 2008.
  36. ↑ USEPA: "2010/15 PFOA Stewardship Program" Accessed October 25, 2008.
  37. ↑ Welcome to JeffGordon.com :: Sponsors

Further reading

External links