DUPONT IN CHINA DEAL TO PRODUCE SPANDEX
Byline: Scott Malone
NEW YORK — Continuing its efforts to build a presence in the generic spandex market, DuPont on Thursday agreed to form a 50-50 joint venture in China with Lianyungang Zhongshan Spandex Co.
This agreement follows two spandex ventures — in Korea and Taiwan — the Wilmington, Del.-based company has formed over the past 14 months.
The model for these spandex joint ventures is different from the strategy DuPont pursued last year in moving much of its polyester manufacturing into joint ventures. In the case of polyester, the company sought to contribute its plants and looked for partners willing to put up mostly money to pay for expansions and modernizations.
With these spandex deals, DuPont has mostly expanded into places where it did not previously have plants. It has brought money to fund expansions, as well as other intangible things.
“We’re looking for people who have a stake in the ground and we are bringing our technological capabilities and market knowledge,” explained Linda Kearns, global brand manager for DuPont Lycra. “We’re taking advantage of their market access and existing capacity.”
Kearns added that DuPont chose to join with Lianyungang because it is the largest manufacturer of spandex in China. The joint venture will have an initial capacity of 4,000 tons of spandex a year that the partners plan to expand to 7,500 tons a year.
The joint-venture operations produce unbranded spandex. They do not use the Lycra name.
A DuPont-Saehan venture in Korea began producing spandex late last year. The company is still working out the final terms of a marketing alliance with Taiwan’s Shinkong, which is expected to take off shortly, Kearns said.
With this third Asian alliance, DuPont will turn its attentions to joint-venture partners elsewhere in the world, Kearns said.
“Our intent was to get three major alliance partnerships in Asia,” she said, “but we continually look for opportunities in other developing markets.”
She declined to comment on the total generic spandex-producing capacity DuPont would have access to through these joint ventures, but emphasized that it would be much smaller than the company’s total branded Lycra spandex capacity.
Mao Yi Ping, president of Lianyungang, said in a statement: “We have been searching for ways to further excel in our spandex production to prepare for the potential market changes after China enters the World Trade Organization.”