DuPont Co, the inventor of nylon, said it's shifting production of textile fibers to Asia so that its synthetic material unit will be more competitive as the company seeks investors for at least part of the business.
DuPont's Chief Executive Officer Charles Holliday told Bloomberg Television that in the past couple of years production of synthetic fibers has moved to Asia from the US and Europe faster than expected, prompting DuPont to join the trend.
"We're shifting our business to where our customers are," Holliday said. "Our customers are in China, in the Asean region and increasingly in India."
DuPont's nylon, polyester and Lycra businesses have been hurt by competition from producers, particularly in China, that can make the same fibers cheaper. Nylon is used in carpet and clothing. Lycra, a patented stretch fiber DuPont invented in 1958, and polyester are used in clothing.
The world's largest maker of synthetic fibers said in February it expects to separate its unit making the material from the parent by the end of next year. The unit makes US$6.5 billion worth of nylon, polyester and Lycra annually and contributes a quarter of DuPont's sales.
The company has factories in China and Singapore that make Lycra and plans to expand its Spandex brand of Lycra "rapidly" in Asia to meet surging demand in the region, Holliday said. At the same time, the company is cutting back its textile fiber operations in the US and announced in April it would fire 2,000 workers at is textile unit there.
The Wilmington, Delaware-based company's sales of nylon and synthetic fibers in Asia totaled about US$1 billion last year and may "easily grow 20 percent" in the next couple of years, DS Kim, president of DuPont's Asia Pacific unit told Bloomberg News.
DuPont last year opened its third Lycra plant in Singapore with an investment of US$80 million. Its first two Lycra plants cost US$334 million, and the company said it has invested US$1.3 billion in Singapore over the last 15 years.
The company also produces 4,000 tons of Lycra a year at a plant in Shanghai, China with plans to increase this to 10,000 tons when an expansion project is completed next year. The China plant and its expansion cost DuPont about US$180 million.
DuPont is also in talks with two local partners to build another Lycra plant in China, Morris Cranor, vice president of manufacturing for DuPont's textile unit, said in March.
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