DuPont Nears Finish Line on Major Ethanol Project as Dow Merger Looms

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Researched by Industrial Info Resources (Sugar Land, Texas)--E. I. du Pont de Nemours and Company (DuPont) (NYSE:DD) (Wilmington, Delaware) is putting the final touches on its pending merger with fellow chemicals leader Dow Chemical Corporation (NYSE:DOW) (Midland, Michigan), and is in an anything-but-weak position following its second-quarter 2016 results. Although revenues were slightly lower compared with the same period last year, segment earnings jumped 11% and were especially strong in the Agriculture and Nutrition & Health segments. Industrial Info's project database is tracking roughly $652 million in active DuPont projects.

After the merger is complete, DuPont and Dow will be split into three entities focusing on agriculture, material sciences (including construction materials, vinyls and plastics) and specialty products (including electronic components, food additives and safety products). According to Argus Research, the agriculture company will command about 25% of the agriculture market.

Following enthusiastic approval from shareholders, DuPont and Dow are now obtaining antitrust and other approvals from various countries in which they operate. For more information on the pending merger from Dow's perspective, see August 8, 2016, article - Dow Chemical Presses on with Sadara Start-Up, Sees Progress on Texas Ethylene Unit.

"We invested about $150 million in capital expenditures in the second quarter, or about $500 million year-to-date," said Edward Breen, the chairman and chief executive officer, of DuPont, in a recent quarterly earnings call. "We remain on track for [capital expenditures] to be $1.1 billion for the year, versus $1.4 billion last year, excluding Chemours." DuPont spun off its Performance Materials business into The Chemours Company (NYSE:CC) (Wilmington) in July 2015.

DuPont's largest active project is the $275 million commercial-scale cellulosic fuel ethanol plant in Nevada, Iowa. Completion of the facility, which is expected to produce 27.5 million gallons per year, is presently set for the fourth quarter. For more information, including capacities, equipment requirements and contractor contact information, see Industrial Info's project report.

The feedstock for DuPont's Iowa facility took a hit recently when lightning struck a storage area, effectively eradicating about 10,000 bales of corn, according to Ethanol Producer Magazine. Responders quickly contained the fire, although the affected corn continued to smolder for a few days. Fortunately, there was no lasting damage to either the storage facility or the ethanol plant, which are several miles apart.

DuPont also is at work on $30 million in ground and wastewater treatment upgrades at its Spruance Synthetic Fibers plant in Richmond, Virginia. In addition to a new groundwater treatment plant, DuPont is constructing a granulated activated carbon system building, a solids building, two feed stations and other major components, some to comply with environmental regulations. For more information, see Industrial Info's project report.

Not surprisingly, the chemical-related buildout along the Texas Gulf Coast area is host to one of DuPont's largest North American planned projects: the $60 million expansion of the Sabine River Works facility's ethylene plant, and an accompanying $40 million expansion of the facility's copolymer plant. But like many such projects, market conditions have proven too shaky for DuPont to feel confident enough to push forward in the near future; the projects have been mired in the evaluation and design phases since commodity prices collapsed. For more information, see Industrial Info's project reports on the ethylene plant and copolymer plant expansions.

DuPont reported a growth in ethylene volumes this past quarter, due in part to an unplanned outage in second-quarter 2015; average ethylene spot prices were down about 40% from the same period last year.

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