USA – Specialty chemicals maker, DuPont is said to be considering selling its nutrition and biosciences unit, few months after Dupont became independent following a three-way split earlier this year.
According to a Bloomberg report, the unit – which supplies everything from soy-based food ingredients to tablet binders – is valued at about US$20 billion as a standalone entity.
DuPont is determining options for the business, including a potential sale or spinoff. The nutrition and biosciences division specializes in products including sweeteners, emulsifiers, dairy cultures and dietary fibers.
DuPont was a part of DowDupont Inc until a split earlier this year. The Wilmington based company said in February that its overall goal was to divest about 10% of its portfolio.
DowDuPont spun off its materials-science business into a company now called Dow Inc. and its agriculture business into a company now called Corteva Inc. Dow and DuPont agreed to merge in 2015. DuPont is the specialty-sciences portion of the company.
The nutrition and biosciences unit, DuPont’s biggest revenue generator in 2018 on a pro-forma basis, was hit by lower sales of food, beverage and pharma solutions in the latest reported quarter, and brought in 4% lower sales than a year earlier.
Organic sales, which exclude currency movements and acquisitions, fell 3% in the company’s second quarter, with volume declines offsetting higher prices.
The sales declines were spread across the US and Canada, Europe and Asia while Sales in China were down 3% from the prior year, compared with a 10% drop in the first quarter.
The speciality-chemicals maker said that it expects the soft demand in many of its businesses to continue through the second half of the year.
For the second quarter, DuPont posted a net loss of US$571 million, compared with a profit of US$1.77 billion in the comparable period a year earlier.
However, DuPont noted that it has benefited from the rise of meat replacements because the company makes pea and soy proteins
Analysts argue that it’s possible that merging the DuPont unit with the resources of another company would give the combined entity a deeper tool chest and employee knowledge base from which to create these ingredients.