This Kansas-based group already became a major polyester producer in North America and Europe after purchasing the largest part of Hoechst polyester assets by the end of last decade..
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In addition to its polyester business, DuPont will bring to Koch Industries its nylon and spandex activities, including all brands and production capacities. .
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Recently called “Invista” by its parent group, DuPont textile division will be sold for US$4.4 billion in cash, both groups announced. .
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Invista had revenues of US$6.3 billion in 2002 with 18,000 employees worldwide and 50 manufacturing sites. Although Invista assets are bought by Koch two separated subsidiaries KED Fiber Ltd and KED Fiber LLC, “the new company will be an independent subsidiary of Koch Industries, managed by its own board of directors,” Koch said. .
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“While being part of a different and privately held company will be a significant change for us, it will certainly offer opportunities to improve our focus on long-term success and more stability in weathering business cycles,” said Invista chief executive Steve McCracken.
DuPont was confronted with a slow decline of its fiber division in the past ten years. Facing increasing competition from Asian producers and progressive elimination of its customers in Western countries, the group was long in exiting the business compared with historical competitors in Europe. .
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The group was repeatedly forced restructuring its polyester and nylon activities in the past decade. By purchasing Invista, Koch Industries will dramatically expand its polyester business and complete it with DuPont nylon and spandex activities. .
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“By combining INVISTA many capabilities and strong brands, primarily in nylon and spandex, with the polyester businesses of our KoSa subsidiaries, we will create a diverse company, well-positioned to compete in the global fibers and resins markets,” said Charles G. Koch, chairman and chief executive officer of Koch Industries.DuPont is actually the founder of the nylon and spandex markets with very large market shares in carpet and apparel segments in North America and Europe. .
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Although DuPont polyester was rapidly confronted with Asian competitors, the Far East was slower in developing nylon-polyamide and spandex facilities. .
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DuPont spandex brand Lycra has an overwhelming share of global quality market. .
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In the past decade, however, Korean and Taiwanese producers began developing spandex capacities on the lower end of the market, finally threatening Lycra empire. .
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In order to eliminate Asia threat, DuPont formed joint-ventures with regional spandex makers, developing sales on the generic market.
Date:11/18/2003
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