DuPont, Teijin to Form Global Joint Venture for PET, PEN
DuPont and Teijin Limited have signed a letter of intent to form a global joint venture to produce and sell polyethylene terephthalate (PET) and polyethylene naphthalate (PEN) polyester film. The 50/50 joint venture provides the two companies with a world-class, integrated global platform for supplying differentiated, value-added polyester film products. DuPont will receive cash reflecting the difference in the values of the respective businesses; the amount was not disclosed.
"This joint venture is the second step of an innovative, multi-part plan for polyester in which DuPont joins forces with an extremely competent partner, reduces its investment and, ultimately, increases shareholder value," said DuPont chairman and CEO Charles O. Holliday, Jr. "The alliance announced today greatly strengthens our global market leadership position in polyester films, making it extremely viable and sustainable for the long run. This is an important part of our ongoing strategy to reshape our polyester businesses, which began last year with the signing of a letter of intent to form a joint venture with Alpek S.A. de C.V. to produce and market polyester staple fiber."
The new venture with Teijin, including combined sales of about US$1.4 billion and production capacity over 300,000 tons per year, provides for the unrestricted flow of technology between the two companies and leverages DuPont's strengths in the United States, Europe and China with Teijin's strengths in Japan and Asia Pacific. "This venture strengthens our technology base, global reach and the long-term health and sustainability of our polyester films business worldwide," said Francine Cheeseman Shaw, vice president and general manager, DuPont Polyester Films. "We value our relationship with Teijin based on several joint ventures, such as our existing joint venture which produces magnetic media films."
The venture will operate globally with a single face to the market, recognizing and responding to regional market requirements. Included in the venture is the existing Teijin DuPont Films Ltd. joint venture with operations in Circleville, Ohio, and Contern, Luxembourg. "The alliance will offer customers a more competitive product offering than either company could do alone by combining global research and development and production facilities with an unparalleled market position," said N. Nagashima, Teijin Limited general manager for Plastics and Films Group.
Under the LOI, Teijin's sales operations will be incorporated into the joint venture upon its formation, however, Teijin will continue its Japanese manufacturing and technical development operations until 2001. During the interim, these operations will be used exclusively to serve the joint venture. Thereafter, all Teijin operations will be included in the joint venture.
DuPont Polyester Films, a leading global supplier of polyester films, specializes in films and related products for the specialty, industrial, packaging, electrical and electronics markets. Teijin is a global manufacturer of PET polyester film for high-end uses, such as advanced magnetic media, laminated film for beverage cans and electronic materials. The company has two plants in Japan, a new plant in Indonesia and the Teijin DuPont Films joint venture in the United States and Luxembourg. Teijin also was the first in the world to commercialize PEN polyester films and is currently the leading global producer of PEN films used for high-density data cartridges and advanced photo