Dupont delays China expansion amid downturn

Chemicals maker Dupont Inc will delay expanding Chinese product lines used in car manufacture and construction as demand has slowed, but strategic projects including photovoltaics will go ahead, a company executive said.

The US-based company, which last week announced it was cutting 2,500 jobs globally, may have to shed jobs within China and elsewhere in the Asia Pacific, "but the number will be small compared to elsewhere in the world," said Douglas Muzyka, Dupont´s president for Greater China. Last week Dupont forecast a fourth-quarter loss as the steep drop in construction, car sales and consumer spending hurts its business. Dupont is targeting cost cuts for 2009 of $US600 million, up from its previous goal of $US200 million.

"It (cost cuts) has affected China in so far as our incremental capacity expansion will be delayed," Mr Muzyka told Reuters on Wednesday in an interview. "Demand is down in the automotive and construction markets and we´re not going to spend money on putting in additional capacity on that to serve markets that are down," he said.

Dupont plans to focus on strategic investments including a photovoltaics manufacturing plant in Shenzhen, China, and is looking at building a titanium dioxide plant in China and developing a market in the country for biofuels such as butanol.

Photovoltaics, which are used in solar-powered devices and energy generation, account for about five per cent of Dupont´s total revenue of about $US30 billion.

Dupont employs 6,000 people in Hong Kong and China and makes a wide range of industrial materials on the mainland including polymers and resins used in the automotive and construction sectors. The global economic downturn has eaten into demand for cars in China and slowed construction activities there, crimping growth for Dupont´s mainland China business. The slowing world economy has forced numerous companies to scale back spending and slash jobs.