By Roger Morris
Special to Delaware Business Times
When the Chemours Co. was spun off from DuPont on July 1, 2015, there were those who thought it would never get off life support.
It had old products, too much debt and the prospect of worrisome litigation.
Additionally, “Immediately post-spin, we were hit with currency shifts and world economic headwinds,” Chemours CEO Mark Vergnano explained in an interview earlier this year. “Our stock price began to fall, and some thought we might not make it for our first year.”
Even as late as September 2016, its stock was languishing in the mid-teens. But, in the year since, Chemours stock (CC) has edged to over $50 a share, having made a slow climb month after month past its two-year mark.
“Chemours is a different company today than at spin-off in July 2015,” Vergnano said in a recent update. “The success is due to our organization’s collective execution of our five-point transformation plan, which was designed to get the company financially healthy, reduce our costs, optimize our business portfolio and build a culture we wanted for ourselves.”
Chemours currently employs about 1,000 people at its Delaware offices and facilities.
It has certainly been an active two years plus. Plants have been closed — including the one at Edgemoor, its last Delaware manufacturing facility — and opened. The three operating units that constitute Chemours’ business have taken hold. And stockholders and analysts have given their approval. As of this writing,
the consensus of analysts who follow the company was either “buy” or “strong buy,” according to Nasdaq.
From a more symbolic viewpoint, it could be argued that when DuPont spun off Chemours, it also spun off much of its 212-year heritage with it. Chemours has for the past two years had its headquarters in what had been the DuPont Building on Market Street in Wilmington, while DuPont moved its offices to suburban Greenville.
Many of DuPont’s benchmark, if somewhat unglamorous, product lines went with Chemours. And with the closing of its merger with Dow in August, the new DowDuPont has two corporate histories and two corporate cultures to integrate, as well contend with dual corporate headquarters in both Michigan and Delaware.
However, the strategic structure which Chemours has built is quite different from what Vergnano and his former DuPont colleagues were used to. Whereas DuPont was highly centralized with large corporate staff departments, Chemours has gone in the opposite direction, decentralizing into three operating units — Titanium Technologies, Flouroproducts and Chemical Solutions.
“We use the three businesses as our center point of decision-making, eliminating many centralized corporate functions,” Vergnano said. “This required us to clearly define roles and decision rights inside the company which, as a result, has created a clear ‘owner’s mindset’ within the company.”
Altogether, Chemours has manufacturing facilities in every major geographic area of the world, which Vergnano believes positions the company to better serve and support its far-flung customer base located in more than 130 different countries. As a result, the company has not been involved in hotly politicized trade issues such as NAFTA — the North American Free Trade Agreement.
“Altamira, our Ti02 plant in Mexico, primarily serves our customers in Latin America and Europe,” Vergnano said. “Our U.S.-based Ti02 facilities serve the U.S. and Asia, so NAFTA has a minimal effect on our business performance.”
Still, older plants that Chemours inherited from DuPont have continued to cause environmental headaches. Recently, North Carolina sued the company for discharging the toxic chemical GenX from its Fayetteville plant into Cape Fear River, which flows into the Atlantic at Wilmington, North Carolina. Chemours said it has recently stopped generating the byproduct at Fayetteville.
Hurricane Irma also posed a serious threat to Chemours facilities, but it could have been much worse, Vergnano said. “In addition to having all our employees accounted for, we were fortunate that none of our sites in the Gulf Coast region sustained major damages,” he said.
All were back on line within a few days.
Is Vergnano, as a former DuPont executive, saddened by its merger with Dow? “In a way, it is sad to see the traditional DuPont Co. leave the business landscape,” he said, but noted the trend for consolidation to “unlock shareholder value,” one that in fact resulted in his own company’s spin-off. But, he added, “With the depth of talent in place throughout the new [DowDupont] company and the strong leadership in place, I am certain it will be successful.”