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DowDuPont's Unit to Invest Over $400M in Capacity Expansion

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DowDuPont Inc.’s (DWDP - Free Report) business unit, DuPont Safety & Construction plans to invest more than $400 million to expand capacity for the manufacture of Tyvek nonwoven materials at its Luxembourg facility. The expansion is scheduled to start in 2021 and will include a new building and third operating line at the site.

Given the increasing global demand for Tyvek, this move will serve as a significant step in growing the business besides maintaining the company’s leadership in nonwoven.

Tyvek is a unique nonwoven material made of 100% high-density polyethylene. Its use has allowed new dimensions of protection, security and safety in a vast range of industries and applications.

DuPont remains committed to develop new Tyvek products and applications to meet evolving marketplace needs. Known for its lightweight durability and texture, these products are high on demand by designers of consumer products for lighting, fashion accessories and apparel.

DowDuPont has underperformed the industry it belongs to over a year. The company’s shares have moved up around 6.2% over this period compared with roughly 9.8% growth recorded by the industry.

The company, during its first-quarter 2018 call, noted that it has realized cost-synergy savings of more than $300 million in the first quarter and is on track to deliver a 75% run rate against its $3.3 billion cost-synergy target by the end of third-quarter 2018. It also returned around $2 billion to shareholders in the first quarter through dividends and share repurchases.

DowDuPont expects net sales in the second quarter to increase more than 10% and operating EBITDA to rise more than 20% on a year-over-year basis.

DowDuPont remains committed to achieve the cost-synergy target, execute its growth projects and deliver new products from its innovation pipeline. The company also expects the Materials Science business spin-off to complete by the end of first-quarter 2019, followed by the separation of Agriculture and Specialty Products businesses by Jun 1, 2019.

Zacks Rank & Stocks to Consider

DowDuPont is a Zacks Rank #3 (Hold) stock.

Some better-ranked companies in the basic materials space are FMC Corp. (FMC - Free Report) , Celanese Corp. (CE - Free Report) and The Chemours Company (CC - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 16.4%. Its shares have gained around 15.5% over a year.

Celanese has an expected long-term earnings growth rate of 8.9%. Its shares have moved up around 32.8% over a year.

Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained around 20.6% over a year.

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