Dow chemistry and DuPont Co (five layer coextrusion POF, cross linked POF raw material suppliers) merged into a giant with a sales volume of $130 billion, one of the highlights is the mutual complementarity of both business and products. So what about the two companies?
Dow's sales share the absolute advantage in the two groups.
DuPont's sales of DuPont were $58 billion 200 million in 2014 and $34 billion 700 million in DuPont sales. DuPont later peeled off high performance chemicals operations as ChemoursCo.. According to the adjusted EBITDA provided by the investor's introduction, Dow's operating profit was $9 billion and DuPont was $6 billion.
At the end of 2015, DuPont and DuPont had about 53000 employees, but DuPont announced that it would further lay down 5000 or more people in December.
Dow and DuPont's polymer business will focus on Material Sciences Corp, the largest of the three independent companies that were stripped in 2018. Its annual sales (according to 2014 Statistics) will reach US $51 billion, of which Dow polymer business will account for us $45 billion, and the remaining $6 billion will come from DuPont. The company will also include Dow Corning's silicone materials business, and Dow has increased its stake in the joint venture from 50% to 100%.
As DuPont, a Dow and thermal engineering giant of large polyethylene producers, said the combined two will be better served in the target final market. About 70% of the sales of this material company will focus on three key final markets for global polymer producers: packaging, transportation and construction. According to the partners, the company will become the world's largest supplier of packaging materials.
The five layer film for food packaging is one of Dow's and DuPont's view that both sides can play their respective material advantages. For example, using Dow LLDPE outer layer, DuPont polyamide and EVA inner barrier film, and cross linking POF shrink film.
In the automotive market, Dow and DuPont both take the lead in polymer supply, but they fall into different product categories. DuPont's advantage lies in engineering thermoplastics, especially nylon and special polyamide, which are mainly used for "engine hood" and other high-performance applications. Dow is famous for its adhesives and foam related polyurethane products.
Both sides overlap on some product types, such as elastomers. But the two groups produce different types of materials: Dow specializes in polyolefin based elastomers and EPDM, while DuPont produces thermoplastic elastomers, ethylene - acrylic elastomers and perfluoroelastomers. The two sides had previously established a joint venture called DuPontDowElastomers in this field, and then terminated their operation in 2005.
DuPont's polymer related businesses are renowned for its wide range of high-performance products. Its engineering resins include products based on nylon, polyester and acetal, and additive products include modifiers based on ethylene copolymers and ethylene vinyl acetate copolymers.
Dow is a comprehensive manufacturer of ethylene and polyethylene raw materials. Its high yield polymers include polyethylene and polystyrene, polyurethane and related chemicals. Dow is also a large ethylene oxide producer, which is used in polyester and PET production. Dow is integrating its chlor alkali and epoxy resin business unit into a joint venture with Olin company.
R & D has always been the highlight of DuPont, and R & D investment accounts for about 6% of annual sales. Dow's R & D investment accounts for about 3% of annual sales.
The two groups are all over the world, but Dow's business is mainly concentrated in large scale production, and there are 201 factories in 35 countries. DuPont has 322 factories in 90 countries.
In its material business, Dow's revenue comes mainly from North America and Europe, the Middle East and Africa (EMEA), while DuPont has considerable business from the Asia Pacific region outside North America and Europe, Middle East and Africa. DuPont high performance materials business has 16 factories in the United States and Canada, 8 in EMEA, 17 in the Asia Pacific region, and a factory in Latin America.
And Dow Chemical recently released financial reports, the fourth quarter of 2015 earnings and revenue are better than market expectations.
Dow's net profit surged to $3 billion 527 million, or $2.94 a share, from $734 million a share, or 63 cents a share, in the same period last year. The latest results include a $1.96 per share earnings per share for the removal of chlorine products, 52 cents per share from the sale of MEGlobal shares, and an asset impairment of 11 cents per share and related expenses.
Excluding one-time items, the company's earnings per share adjusted for the quarter were 93 cents, much higher than the average 70 cents for analysts surveyed by FactSet. Revenue fell from $14 billion 400 million in the same period last year to $11 billion 500 million, still higher than analysts' average estimate of $11 billion 200 million.
