The business operations are fast gaining momentum globally and most of the markets are on their way back to normal, believes Edward D. Breen, Executive Chairman and Chief Executive Officer, Dupont.

Dr. Breen, who expressed his thoughts at the recent Deutsche Bank’s Global Basic Materials Conference, is highly optimistic about the market revival. “Asia was harder than any region but it is regaining fast. North America and Europe are doing well. It is nice that the business momentum is gaining pace around the world. Among some of the key markets, I would say many have already recovered to the 2019 levels and others are clearly on the path to recovery. The water space is hard and will take some time. The safety business is at 6% and running well. Electronic business is doing good. Oil and Gas, commercial construction are yet to recover but are rebounding back to 2019 levels. We have seen constraints in Mobility and Materials (M&M) business, especially the polyester raw material and lingering glass fiber which is tight. Polyethylene is tighter, so is acrylic adhesive space. In the semiconductor area, especially advanced electronic chips, things are improving but I am not sure it will get resolved from the auto industry stand point. Things are improving on a quarterly basis but it's a full year activity.”

In conversation with David Begleiter, Research Analyst, Deutsche Bank Chemicals, Breen expressed hope that the raw material situation will get better in the coming days. Explaining the constraints, he said, “We lost some business due to the raw material deficit. We missed 100 million dollars in sales during the first quarter and again 100 million dollars in the second quarter. We will be able to do better once the material supply comes through. While vendors are working hard to resolve it and the raw material situation is getting better, I don't think it will get resolved by the third quarter. Maybe at the end of the year.”

As per Breen, he has never witnessed such supply chain issues in his entire career. He says, “We need to rebuild the supply chain by mid next year. While the residential construction market will take time, Do It Yourself (DIY) products will be tight. My gut feeling is that it will take a whole year. There are many different vendors but still the shortage issues across industries continue to prevail.”

On price inflation, Breen says, “There has been 100 billion dollar raw material inflation due to increase in oil prices. Two thirds of it is in M&M portfolio and intermediates, driven by tax freeze and other factors. We are confident that we will neutralize it with dollar impact on margin. We have been very consistent with the price to take advantage of market dynamics. As raw material prices wane, we will be able to meet demand and neutralize the prices as well.”

Talking about cost cutting, Breen mentioned, “Inflation has affected the wages in many industries and among the factors that have fueled it are raw material shortages and lower production. Unlike others, we didn’t cut any wages. While we didn’t do the salary hike last year due to the pandemic, we paid a 70% bonus to employees to boost their morale. This year we have given a 100% hike to them.” 

On the question of employee travel, Breen said, “We are opening up but internal travel is on hold. Currently it is 15% to 20% of our capacity and I don't think it will cross 50% this year. Since the engineering and applications workforce requires travel, it mostly is technical related. The rest of the business is happening on video calls.”

With regard to major transactions by the company, Dupont CEO emphasized its focus on maintaining a good balance sheet. “We have good cash flow and margin lines. Therefore, we are looking at fulfilling acquisition targets in the core businesses. A month ago, we bought  Laird Performance Materials for $2.3 billion as we thought it is reasonable for this kind of business. We picked up a strategic asset that fits well in our electronic portfolio, creating more solutions. We are always for strategic planning and safer numbers as it makes a lot of sense to our investors.”

Talking about innovation, Breen credits the R&D team of his company for doing outstanding work. “We always had a strong core scientific talent and application engineering expertise. We devote 55% of our R&D in key platforms into the strategic areas. Compared to earlier when we had no clue, we are now sure where exactly the R&D efforts are going. We can now track the investments that have gone into projects. The rigorous efforts we have been putting in has shown in the last few years.”

On the Capex invested by the company, Breen particularly mentions expansion of its Luxembourg capacity by 2023. “DuPont Safety & Construction plans to invest more than 400 million dollars to expand capacity for the manufacture of Tyvek nonwoven materials at its facility in Luxembourg. The production expansion will add a new building and third operating line at the site.”