Du Pont Case

E. I. du Pont de Nemours and Co. : Titanium Dioxide

Members : Young Mee Lee, Seokjin Jeong, Myeong Joong Kim, Jae Hwan Jung, Sung Joon Park

Ⅰ. Current status and environmental changes

Titanium dioxide (TiO2) producing company E. I. du Pont de Nemours and Co.(Du Pont) is considering how to cope with a recent dramatic change in the market. Until now, Du Pont has been a dominant company in the stable TiO2 market. There are three TiO2 producing process technologies (Table 1), and only Du Pont possesses the operation technology of ilmenite chloride.

<Table 1> Characteristics of three TiO2 producing process technologies

Process | Feedstock | Harmful wastes | Unit operating cost | Operation technology |

Sulfate | Sulfuric acid (low grade) | Much | Roughly identical | All companies possess |

Rutile chloride | Rutile (high grade) | Less | | |

Ilmenite chloride | Ilmenite (low grade) | Not much | | Only Du Pont possesses |

Two recently occurred events have completely changed the TiO2 industry. One is rutile ore shortage and the other is newly enacted government regulation for an environmental protection legislation. These have led to raise TiO2 production costs and diminish production volumes. As a consequence, a shortage of TiO2 is stimulating excess demand.

Since Du Pont’s ilmenite chloride technology is significantly cheaper than other technologies and Du Pont is the only company that has constructed and managed an ilmenite chloride facility, Du Pont has major advantages over other companies.

However, Du Pont’s competitive advantages will not be permanent because many competitors are catching up to Du Pont by building ilmenite chloride processes or upgrading their current facilities. It is time for Du Pont to decide future strategies in order to retain its competitive advantages in the future.

Ⅱ. Du Pont’s strategic alternatives : Growth vs. Maintain

There are two strategies being considered by Du Pont. The growth strategy...