DuPont Sees Faster Chinese Growth

DuPont Co., the second largest U.S. chemicals maker, said its strong double-digit revenue growth in China would accelerate while it increased investment and manpower in its fastest growing market.

"We have seen healthy double-digit growth in sales and, in fact, that could accelerate," Thomas Powell, company vice president and head of its China operations, told reporters.

Company officials have said the firm chalked up 32 percent revenue growth in the China region, including Hong Kong and Taiwan, in 2004.

DuPont will "more than double" its $700 million investment in China by 2010, with the largest part committed to a $1 billion titanium dioxide plant in eastern China, Powell said.

DuPont, which trails only Dow Chemical Co. in the U.S., is the world's largest maker of titanium dioxide, a white pigment used to make coatings, plastics and paper.

"China is our number-one focus in the world for investment," Powell said.

While costs are rising due to higher crude oil prices, DuPont has been able to pass on some of those costs to its customers. The company said earlier this month it would increase prices for all titanium dioxide grades sold in North America due primarily to a significant rise in raw material costs.

But it was in China that the company saw the potential for sustainable strong growth.

"We have been adding 400-500 employees a year and I don't think that will change anytime soon," Powell said.

DuPont expects earnings this year to rise 22 percent over 2005 due partly to savings from job cuts in Europe and strong pricing power.

China is the company's fastest growing market, but the mainland contributed only over $1 billion in revenues to the 2005 global total of $26.6 billion.

Competition is intensifying as multinationals from Bayer to Dow Chemical vie for market share by increasing investment or initiating acquisitions.

Dow told Reuters last week it was seeking investment opportunities in China and could be looking at billion-dollar deals with Chinese partners.

DuPont shares are down 3.7 percent in 2006, underperforming a 1 percent dip on Standard & Poor's Chemicals index, but outpacing Bayer's 5.6 percent fall.

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