Thursday, 20 September 2012 22:21

DuPont Performance Coatings, A Big Change but Much Stays in Place

A big news item in the auto body industry has been DuPont’s decision to sell DuPont Performance Coatings (DPC) to the Carlyle Group for $4.9 billion after around 90 years in the business (see story adjacent). Such a major transaction concerning one of the largest and most important suppliers of automotive paints has garnered much interest and concern. Because of this, I took the opportunity to sit down with Mike Bennett, North America Marketing Director at DPC to get more details about the upcoming transition, expected to close during the first quarter of 2013.

DuPont’s decision to sell DPC came from their strategic decision to focus on other aspects of their business, and since the automotive paint industry is not aligned with these intentions, they decided to sell that portion of their business with the belief that “DuPont and DPC are best served by focusing on these separate market segments,” according to Bennett.

 

Regarding how this sale will benefit DPC, Bennett claims “this will better allow us to focus on our customers. Currently, DPC’s profits are funneled back into the DuPont corporation, but this transition will allow DPC to funnel profits back into our own growth... providing a great opportunity for us and our customers and allowing us to focus on what is most important to DPC.”

The transition will also allow DPC to increase their efficiencies and synergies, but there are no plans to make personnel changes or changes to the products and services offered. DPC’s separation from DuPont will simply allow them to focus on what they do best: manufacturing automotive paint.

Eventually, DPC’s name will change as they end their affiliation with DuPont; however, while there will obviously be some rebranding, DPC promises that they will continue to maintain their efforts to provide their auto body customers with the best possible products.

“DPC is absolutely committed to our individual distribution network, and we have no plans to change that.  In fact, we expect that this transition will help us grow our position in the market,” Bennett assures Autobody News readers.

DuPont and the Carlyle Group are working together to ensure a smooth transition for customers, and they insist that DPC’s eventual rebranding should not significantly impact end-users. Since DPC’s paint lines were a major contributing factor in the Carlyle Group’s decision to acquire the company, they plan to continue producing and selling their popular brands which include Spies Hecker, Standox and Imron, among others. Bennett stressed that DPC has no intention of changing their commitment to their network of individual distributors; he also adds that this transition will allow DPC to focus on their specific market, and “through this renewed focus, DPC hopes to fuel our customers’ growth and market share.”

The intended transaction was announced on August 30, 2012, ending a year-long uncertainty concerning DPC’s future. Rumors of a possible sale of DPC first began in November 2011 when sources claimed that DuPont was searching for potential buyers. After the sale is official in early 2013, DPC will become an independent company, but the company’s management team fully recognizes the importance of a smooth transition for their valued customers. DPC has stated that they will indefinitely continue to operate at the Coatings Technology Center (CTC) established at the DuPont Experimental Station in Wilmington, Delaware in December 2010. DuPont Performance Coatings has approximately 100,000 square feet of space at the CTC devoted to their laboratories, applications development and office space, and their primary focus is researching and developing high-performance, sustainable coating products.

NASCAR Sponsorship Intact
Though DPC is bound to experience some changes as they move away from DuPont, one thing that will not change is their sponsorship of Jeff Gordon’s #24 NASCAR team. DPC began their partnership with Jeff Gordon and Hendrick Motor Sports in 1992, and DuPont has decided that the sponsorship will continue with DPC. In fact, the appearance of the #24 car has already changed to reduce the image of DuPont’s name and logo, and to change its emphasis to the Performance Coatings aspect of the business. DPC’s current contract with Jeff Gordon and Hendrick Motor Sports lasts through the 2013 season, but Bennett notes that DPC hopes to continue this important relationship beyond that.

 

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