DuPont has almost ‘left the building’

India’s Economic Times has reported that Indian BOPET and BOPP film manufacturer Jindal Poly Films is in advanced talks to acquire the European production assets of DuPont Teijin Films and is expected to pay around US$300 million for the 60,000 tonnes of film extrusion capacity.

Wood Mackenzie Chemicals' chief films analyst Simon King notes, “the sale of these European operations is just another step in the long and painful process of DuPont’s withdrawal from a market they once dominated. DuPont was once the largest world producer and undisputed leader in terms of R&D in the global BOPET film industry, but the company’s profits have suffered in recent years from intense competition from new low-cost producers based in India and China. The company has also been rationalizing their business by focusing on speciality films and in a separate move selling back to Teijin its share of Japanese and Indonesian plants previously jointly owned.”

The DuPont Teijin joint venture was originally formed in 2000 when Teijin Ltd and E. I. DuPont merged their BOPET film interests. At the time, the JV was the world’s largest producer with capacity to produce 340,000 tonnes of film at plants in China, Japan, Indonesia, the US, Luxembourg and the UK. It controlled 18% of the world’s supplies of BOPET film through global brands such as Teijin® Tetoron® Film, Teonex® PEN Films, Mylar® film and Melinex® film.

However, since 2000, the global BOPET film industry has expanded rapidly including new entrants with low-cost production lines supplying commodity films. Some of these new producers also recognized the need to be close to their customers and built film plants in Europe, North America and the Middle East. As competitive pressures grew and margins fell, the DuPont Teijin JV was unwilling, or unable, to compete and began to defend its position through a process of closing commodity film capacity in its existing plants. By 2016, according to PCI Wood Mackenzie’s latest global review, the JV only accounted for 4% of the world’s supplies of BOPET film.

Even after consolidation, profitability in the much smaller speciality business was poor compared to other DuPont businesses, and decisions were taken to downscale their involvement in a market they had been in since the mid-1950s. As of today, DuPont still has a majority share of the two plants in Europe, a majority share of one of China’s largest speciality films producers and production assets in the USA. After the sale of its European assets is concluded in the next few months, DuPont’s Chinese and US interests are probably next.

It may take some time, but it is likely that for DuPont the show will soon be over, and we can say that this highly respected name once synonymous with polyester film has “left the building”.

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