DuPont encouraged by volume growth in emerging markets

LONDON (ICIS news)--Sales momentum in emerging markets bodes well for DuPont in 2010, CEO Ellen Kullman said on Tuesday.

“The regional trends are continuing,” she said, with Asia in the lead followed by Latin America. DuPont is seeing sequential sales growth in the current quarter in the US but Europe is lagging, she added.

The company recorded significant growth in emerging markets in the fourth quarter. Sales in greater China, which includes Taiwan, were 70% higher compared with the fourth quarter of 2008. Emerging Asia sales were up 53% on the same basis, with strong growth from the automotive and electronics markets.

Sales in emerging markets represented 26% of the total for the company in 2009.  

Kullman said in a conference call that DuPont expected similar Asia volume growth in 2010 but from a broader base of countries. Current business visibility is encouraging, she added, and much better than at the start of 2009.

DuPont raised its 2010 earnings per share (EPS) guidance for the year on Tuesday to $2.15-$2.45 a share from $2.10-$2.40 a share on the back of the more encouraging demand picture and its strengthened cost position.

The company believes its restructuring and productivity actions in 2009, which included 14,000 layoffs and a cut in fixed costs of $1.1bn, positions it well for recovery, Kullman said.

CFO Nicholas Fanandakis said the company expects a rebound in the first quarter from year-ago levels in its early cycle businesses, particularly in Asia, and modest growth in Safety & Protection.

Sales are likely to be around 15% higher in Agriculture & Nutrition than in the first quarter of last year and up significantly on a sequential basis because of the seasonality of the business.

DuPont was in step with a transition out of a recessionary environment, Fanandakis said.

Kullman called 2009 “a year of extraordinary challenges”, but said DuPont had strong momentum going into the fourth quarter.

Fourth-quarter 2009 net income of $441m compared with a net loss of $629m reported for the corresponding quarter of 2008 and a profit of $409m for the third quarter of 2009.

Fourth-quarter 2009 sales of $10.4bn were 10% higher than a year ago, with global volumes up 10%. The volume increase was driven by a 34% increase in volume sales in Asia Pacific and Latin America.

DuPont said its sales had grown by more than 20% year on year in the quarter for titanium dioxide, electronic materials, and performance polymers and seed products.

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