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du pont 2005 Annual Review

  1. 1. Sustainable Growth Through Science 2005 Annual Review
  2. 2. To All DuPont Stakeholders The mission of DuPont is sustainable growth — creating value Our financial performance in 2005 was multifunctional teams to serve 38 such disappointing, and we did not achieve our customers, and we are expanding on that base. for our shareholders and society while reducing the environmental earnings improvement goal. This should not We demonstrated confidence in our future take away from the hard work of the people footprint throughout the value chains in which we operate. This when we announced a set of actions in of DuPont who, confronted by extraordinary the fourth quarter designed to increase mission was never more relevant than in 2005, and throughout challenges during the year, demonstrated shareholder value. Prominent among these resilience and creativity. We ended the year was our decision to “buy DuPont” by this review are examples of how our businesses are building absolutely determined to accelerate value initiating a $5 billion share repurchase creation for our shareholders in 2006. sustainable growth in industries and economies around the world. program that is an investment in the growth Natural disasters in different parts of the and future of our company. We completed We have also invited two distinguished experts, Dr. J. Craig Venter world and record-high energy and raw $3 billion of the program in October 2005. material costs combined to test our ability and Dr. Florence Wambugu, to share their visions of how sustainable The other actions include: to adapt and respond. In the third quarter, growth can create even greater value in the future. Increasing cost productivity over the ■ hurricanes in the Gulf Coast of the United next three years by standardizing and States idled 14 of our plants. Our people simplifying supply chains and support acted heroically and compassionately to functions globally to generate cost and help each other and their neighbors, and got working capital savings of $1 billion each. our operations back up and running as quickly as possible. We also provided fuel, Improving our returns on capital for all ■ food, and shelter to emergency service businesses below our 12 percent hurdle workers and our neighbors. rate for return on net assets. The extended shutdown of key facilities had Accelerating science-based innovation by ■ a significant financial impact across several 30 percent by prioritizing programs for businesses, and energy prices, which were faster and larger payoffs by 2010. already tending upward, skyrocketed in the Faster commercialization of our $3 billion ■ storms’ aftermath. Again, the response of pipeline of bio-based materials. our businesses was outstanding. Over the course of the year, we were able to offset We are able to take these decisive actions more than $1 billion in record-setting high despite the headwinds we encountered last energy and raw material costs through year. Our progress confirmed for us that our pricing, creative materials sourcing, and growth strategies are the right ones, more effective plant utilization. and they are working. Increasingly, our differentiated advantage and the creation Sustainable Growth of shareholder value is linked to our capabilities as a science company. In 2005 we completed the transformation of DuPont from a chemical and materials A 21st Century Science Company company into a science company. We have focused on our mission of sustainable Our vision is to be the world’s most growth, which we define as increasing dynamic science company, creating ™ ™ DuPont Artistri ... Combining a 300-year-old tradition with 21st century technology shareholder and societal value while decreasing sustainable solutions essential to a better, our environmental footprint along the value safer, healthier life for people everywhere. chain. While chemistry remains vital to our As a 21st century science company, we are businesses, the addition of biology has committed to bringing value to peoples’ opened tremendous new opportunities. lives through science-based solutions to On the Cover: This Yuzen-dyed We have turned our world-leading research kimono, depicting various elements global needs. At a time when the external capability to inventing what our customers of nature, represents a 300-year-old scrutiny and skepticism of all things related history and tradition in Kyoto, Japan. tell us they need to grow their businesses. to “big business” is increasing, we believe Now DuPont™ Artistri™ digital we have a unique opportunity to We are focused in a special way on the printing for textiles blends an ancient differentiate DuPont in the public arena art with 21st century technology to customers we have identified as most critical create stunning kimono silk judged in and the marketplace because we will be to our future. Revenues from this group are competition and in the marketplace to driven by two things: values-based increasing at two times the company’s be comparable to silk printed using innovation and transparency. average revenue growth rate. At the end of traditional methods. 2005 we had in place dedicated, DuPont 2005 Annual Review 1
  3. 3. created the world’s first insulating Declaration, the first-ever industry-led global breathable membrane, which enables initiative to examine ways to improve builders to meet insulation standards workplace safety globally. without having to increase wall thickness. Transparency This new Tyvek® reduces the heating bill of the average home by 13 percent and reduces One of the greatest challenges facing large CO2 emissions by 15 tons per building. companies today is earning public trust. Earlier this year, we reached a significant The need for transparency is greater than milestone in progress toward reducing ever before, especially for a science emissions of PFOA, an essential processing company working at the leading edge of aid used in the manufacture of exciting but largely unfamiliar technologies. fluoropolymers. Because PFOA is a Also, as global business becomes more persistent material in the environment, complex, new and current knowledge from the U.S. Environmental Protection Agency both inside and external to the company (EPA) announced a voluntary industry-wide is required. PFOA stewardship program. DuPont played One form of transparency is accomplished a leadership role in collaborating with EPA through the external oversight provided to develop the program. It builds on actions by our Health Advisory Board and our we are taking globally to reduce environmental Biotechnology Advisory Panel. Each of these exposure to PFOA. EPA said that our groups is made up of outstanding external voluntary actions demonstrate strong leaders in their respective fields who review leadership and set an example for the rest of our plans and programs and provide the industry to follow. DuPont has already guidance based on their observations and reduced PFOA emissions by 95 percent in experience. Their insights have been most Chad Holliday the United States and 90 percent worldwide. helpful. We grapple with the societal and Chairman and CEO The industry effort will accelerate the commercial ramifications of emerging reduction of PFOA emissions to the technologies and their adoption. Since its environment, while ensuring continued creation in 2000, our Biotechnology Advisory availability of essential products in We continue work in the emerging field of Values-Based Innovation Panel has included a total of 15 recognized industries such as telecommunications, nanoscale science and engineering, in which leaders from 10 countries, representing Innovation is the heart of our enterprise. aerospace, semiconductors, fire fighting and in DuPont is an acknowledged leader. The a wide range of disciplines and cultures. We introduced 1,133 new products and new consumer markets. To date, no human health emergence of new tools and techniques for The Health Advisory Board, established product applications in 2005. With sustainable effects are known to be caused by PFOA. the measurement, characterization and in 2003, includes eight external medical growth central to our corporate mission, control of nanoscale features gives rise to We are applying dynamic science to protect professionals. innovation at DuPont is consistent with a many new opportunities. For example, people at home and at work. Safety clear set of core values. Our values template DuPont™ Voltron® nanocomposite wire We continue to work with leading leadership means working together with consists of the values that have historically enamels, which extend insulation test life, nongovernmental organizations other members of industry, as well as with guided DuPont — safety and health, are being used in motor windings and will to understand and integrate safety and governments and non-government environmental stewardship, ethical behavior, be used in hybrid vehicles. Good product environmental criteria into our research, organizations. To that end, during the and respect for people. stewardship requires a commitment to development and commercialization 111-country World Safety Congress in identifying and managing any potential risks processes in order to ensure that our Some examples of values-based innovation 2005, DuPont initiated the World Safety to ensure the safety of this technology as it products, processes and services are at DuPont: finds wider application around the world. Our newest technology platform, DuPont We continue to take strong actions in the Bio-Based Materials, will apply biology and First Bio-Based Materials Plant voluntary reduction of greenhouse gas With joint venture partner Tate & Lyle chemistry in an integrated way to create PLC, we are completing the construction emissions, having reduced these emissions unique and compelling solutions in the of a new plant in Tennessee that will be by 72 percent over the past decade. We materials, energy, surfaces and medical used to manufacture Bio-PDO™. This is believe that the science is sufficiently markets. Bio-Based Materials is the right a key ingredient for our first bio-based compelling to take prudent actions to science at a time when energy costs are at polymer, Sorona®. Making Bio-PDO™ address global warming and its potential for from corn uses 40 percent less energy record highs, and DuPont has the science than that needed to produce a climate change. We also offer products that lead to bring these new innovations to petroleum-based equivalent. Our new help others achieve their own reductions. market in a sustainable way. We place a plant will save the equivalent of 10 One of our teams in Europe developed an current value of $3 billion on our bio-based million gallons of gasoline per year, or innovative type of DuPont™ Tyvek® and materials pipeline. enough to fuel 22,000 cars annually. DuPont 2005 Annual Review 3 2
  4. 4. DuPont Corporate Highlights providing more sustainable solutions. In this Review, we also have invited two (dollars in millions, except per share) For example, we are partnering with distinguished outside experts to reflect on Operating Results 2005 2004 Environmental Defense to develop a system science and sustainable growth from to manage potential risks associated with their unique perspectives. Dr. J. Craig Venter Net Sales $26,639 $27,340 nanotechnology. We have also worked led the team that sequenced the human with the World Resources Institute and genome and is today pursuing the exciting Net Income $2,053 $1,780 the Pew Center on climate change issues. field of synthetic genomics. Dr. Florence Depreciation and Amortization $1,358 $1,347 Wambugu is CEO of Africa Harvest and is Recognition for Our Accomplishments working at the leading edge of programs to Capital Expenditures $1,406 $1,298 achieve sustainable economic growth through As we pursue sustainable growth through Research and Development Expenses $1,336 $1,333 science in developing countries of Africa. science-based innovation, our We are proud of the leadership roles our Financial Position, Year End accomplishments have brought the kind of people and businesses demonstrated in recognition that makes DuPont a benchmark Total Assets $33,250 $35,632 2005. We believe that our contributions as a company in key areas. An independent 21st century science company will continue panel of experts assembled by Net Debt* $6,329 $2,949 to benefit our customers and consumers on BusinessWeek magazine named DuPont the Stockholders’ Equity $8,907 $11,377 a world stage, offer outstanding growth top green company of the past decade for opportunities, and create value for our our greenhouse gas emissions reductions Data Per Common Share shareholders. and our leadership. We were awarded the Black Pearl Award by the International Net Income — Diluted $2.07 $1.77 Association for Food Protection for our Dividends $1.46 $1.40 efforts in advancing food safety and quality. Scientific American named DuPont among Market Price Range $54.90 – 37.60 $49.39 – 39.88 Chad Holliday the Scientific American 50, a list of the Chairman & CEO leaders shaping the future of technology, for General March 1, 2006 our work in nanotechnology. Average Shares of Common Stock Outstanding (millions) 989 1,003 *The company defines net debt as total debt less cash and cash equivalents and marketable debt securities. A reconciliation of total debt to net debt can be found in Part II, Item 7 of the company’s 2005 annual report on Form 10-K. Milestone Patent Awarded This publication contains forward-looking statements based on management’s current U.S. Patent 7 ,000,000 “Polysaccharide expectations, estimates and projections. All statements that address expectations or Fibers” was issued on February 14, projections about the future, including statements about the company’s strategy for growth, 2006, to John P O’Brien, of DuPont . product development, market position, expected expenditures and financial results are Central Research & Development for inventing polysaccharide fibers forward-looking statements. Some of the forward-looking statements may be identified by — “cotton-like” fibers derived from words like “expects, “anticipates, “plans, “intends, “projects, “indicates, and similar ” ” ” ” ” ” biologically based renewable expressions. These statements are not guarantees of future performance and involve a resources. They are biodegradable number of risks, uncertainties and assumptions. Many factors, including those discussed and highly suitable for use in more fully in documents filed with the Securities and Exchange Commission by DuPont, textiles. It was the 33,801st U.S. patent awarded to DuPont since particularly its 2005 Annual Report on Form 10-K, as well as others, could cause results to company founder E.I. du Pont was differ materially from those stated. These factors include, but are not limited to changes granted U.S. Patent No. 590 in in the laws, regulations, policies and economic conditions, including inflation, interest and 1804 for a “machine for granulating foreign currency exchange rates, of countries in which the company does business; gun powder. ” competitive pressures; successful integration of structural changes, including restructuring DuPont senior researcher plans, acquisitions, divestitures and alliances; cost of raw materials, research and John P O’Brien converts sugar . development of new products, including regulatory approval and market acceptance; and water into a polysaccharide and seasonality of sales of agricultural products. that can be made into novel fibers using an industrial biotechnology process that received the 7 millionth U.S. patent. DuPont 2005 Annual Review 5 4
  5. 5. The Power and the Promise of Science Dr. J. Craig Venter is one of the leading scientists of the 21st century for his visionary contributions in genomic research. How would you characterize the power What from your perspective are the markets where science can have the and promise of science overall? most dramatic impact in the future? Scientific literacy is no longer optional, but That is the challenge — actually picking those rather is a requirement for modern societies markets. DuPont has been incredibly to continue to advance. Science offers us real successful doing this, especially in the area hope in solving many of the challenges facing of polymer chemistry. Obviously, today the the world today including disease, hunger, energy market is one of the single biggest and renewable energy. Specifically for DuPont, markets, and a focus there on sustainable I think science will be a crucial component in energy would be well rewarded. This will be a dealing with problems, such as carbon sources challenge, because the energy market is of a and manufacturing products, in a cost-effective much greater scale than what biology has dealt and environmentally friendly way. with in the past. The reward, however, is the potential to change all manufacturing for the At DuPont we talk about integrated better. Making manufacturing eco-friendly is science — that our most promising not just a nice thing to do, but given what’s opportunities come at the intersection happened in the last year or so with energy of scientific disciplines, where fields prices, it’s going to become an economic necessity. meet or overlap. What is your view? How do you see the relationship J. Craig Venter, Ph.D. I think that integration is the only strategy between scientific development and Founder and president, J. Craig Venter Institute, that truly works today. In fact, most of the Co-founder and CEO, Synthetic Genomics, Inc. the drive for sustainability? advances that I’ve made have come about through the merger of new technologies We have to replace oil and coal as our source with new fields. The work that we’ve done of carbon across the board. This will change been a decade since my team sequenced the going to be such a phase shift that it’s hard to in genomics at the Venter Institute has been everything from sources of energy to first genome and already we can now imagine the total impact. Everything from accomplished by multidisciplinary teams chemical and pharmaceutical synthesis to sequence hundreds of genomes in a month. food and energy production to chemical and that include software engineers, computer large-scale polymer development. The Sorona® We’re inundated with constantly changing pharmaceutical manufacturing could engineers, molecular biologists, and polymer DuPont developed is something that scientific processes. The problem is that you potentially be revolutionized through geneticists. Stove-piped fields of inquiry can affect daily life on a substantial scale. cannot look back historically to understand synthetic genomic advances. ultimately don’t work. And we believe, like Much of modern life has the potential to be the future. The only approach is to take more To realize the full potential of synthetic you, that we can only move forward in an radically transformed by applying modern, risks at the leading edge of science to be genomics, we must first advance our integrated fashion. It’s the intersection of leading-edge science to these issues. there to help drive it in the right direction. A knowledge and understanding of the first all these areas that are resulting in new company like DuPont can’t afford to sit back New developments in science that lead to principles of biology. If we can build DNA developments. and watch other companies develop the new changes in manufacturing and energy in a cassette-based fashion, it becomes approaches, so my advice would be to build I believe that DuPont is the absolute leader resources are the only hope I see for analogous to the paradigm shift in electronic on your successes and be bold. sustainability. The companies that can on this front. You are conducting one of the design that occurred on the order of 50 implement these changes will be the global most important and large-scale manufacturing years ago, when capacitors, resistors, and Is there any innovation that you are winners on an unprecedented economic scale. experiments right now with the Bio-PDO™ transistors enabled the building of an endless pretty sure is going to occur, but that We’re going to need to use renewable resources plant in Tennessee. The scientific and business amount of electronic products using the the public hasn’t contemplated yet? like sugar and couple these with natural communities are watching this closely. This kind common components and integrated circuits. systems for manufacturing processes — then of manufacturing - using a natural resource With synthetic genomics, we’re learning how I think the new field of synthetic genomics we’ll be utilizing truly sustainable techniques. like sugar to provide carbon in a renewable to make the integrated circuits of biology. that my team and I are helping to start, is one fashion, rather than using oil — will be a key From the work that my team and I are doing that’s right on the threshold of making a How would you advise DuPont in the strategy for the future. I think the Bio-PDO™ with our global ocean expedition alone, major impact on society. If we can actually sit kind of choices it makes in using plant is the first large-scale test of these we’ve already discovered nearly six million down at the computer and design a living science to deliver products and ideas. It’s incredibly exciting what DuPont new genes. Those represent a great deal of organism to carry out a specific function that solutions to the world? has done — mixing molecular biology, basic potential design components with which more efficiently enables a manufacturing microbiology, and large-scale engineering. to work. Synthetic genomic manufacturing process, versus spending decades searching The rate that science and technology are Biological and other scientific power will design is essentially limited only by our the environment for an organism that does changing is simply breathtaking. Just look at become the future economic driving forces. imagination. specifically what we want it to do, that’s what’s happened to DNA sequencing. It’s only DuPont 2005 Annual Review 7 6
  6. 6. The Science of Hope and Opportunity Dr. Florence Muringi Wambugu is an agricultural plant pathologist with specialization in virology and genetic engineering for viral disease crop protection. community. The project culminated in its first What role can technology play in harvest of bananas grown from tissue culture improving the lives of people in propagation — the process of growing plant developing countries in Africa? shoot tip tissues in a laboratory until they Global challenges require global solutions — become plantlets ready for transplanting into and recognizing this is the key to success. the field. That’s why Africa Harvest is focused on the Because of the highly controlled starter challenges of food security, health and environment, tissue culture propagation nutrition in Africa. Today, more than 200 significantly reduces disease and dramatically million people live in hunger and poverty in improves yield. Tissue culture technology in sub-Saharan Africa. But by leveraging the Africa has increased banana productivity power and potential of biotechnology, we can from 20 to 45 tons per hectare. help reduce this hunger and poverty — both now and in the future. That increase helps reduce hunger and increase the standard of living for Chura Africa Harvest is already working on two such village banana growers. For the typical Chura initiatives. The banana tissue culture project, family, which averages ten individuals, based in the Chura community of Nairobi, increased production translates to a climb in Kenya, is a short-term intervention whose income from the current average of $1 per goal is to address the immediate challenge of Florence Wambugu, Ph.D. day, per family, to as much as $3 per day, per CEO, Africa Harvest Biotech Foundation International hunger, poverty and malnutrition. The project family. With a goal of increasing sustainability is focused on increasing farmer income among the local community, 2,500 farm through increasing production. Local farmers, families — or 25,000 individuals — have by switching to culture tissue propagation, Building on the proven concept of enhancing Remember, hunger is a global problem that benefited from the Chura tissue culture have been able to increase banana production, corn with essential amino acids, scientists will requires global solutions. For too long, many banana project to date. It is estimated that and their standard of living, significantly. apply the latest biotechnology to improve the organizations have done commendable work 50,000 people will be positively affected as lives and health of as many as 300 million people on their own. However these individual Africa Harvest is also leading the efforts on the program continues. in Africa. The long-term impact will be seen as efforts have not had the impact we’re seeing long-term solutions, such as the Africa African scientists develop the expertise that will through collaborations and coordination with Biofortified Sorghum (ABS) project, which How do you envision the long-term indirectly support biosafety policy development, companies such as DuPont. seeks to improve the nutrient density of impact potential of the ABS Project? which will, in turn, hasten the development of sorghum, a staple in the African diet. At the Through these partnerships, Africa Harvest is African-owned genetically modified crops and The need obviously is great, and so too is the same time, the project is focused on building creating new paradigms with our vision to products to foster both nutritional potential, especially with global support. That African scientific expertise by training top fight hunger, poverty and malnutrition enhancements and economic development support has come not only from DuPont and African researchers to apply this technology through scientific solutions with a specific in Africa. Through international cooperation our other public and private partners, but themselves. Both the tissue culture banana focus on poor communities in Africa. The and partnerships, we envision more open also through the Bill & Melinda Gates and ABS projects show the potential banana tissue culture project and the ABS sharing of technology and greater acceptance Foundation, which has committed $435 biotechnology has, through public/private project can serve as models, reaching across of biotechnology in the future. million to fund 43 global health projects, partnerships, in the quest to improve the borders towards a better Africa. including the ABS project. Although breeders, global society. What does the future hold for Africa Africa Harvest is collaborating with using conventional technology, have made universities, industry and governmental Harvest and the communities you incremental improvements in the nutritional How has the tissue culture banana partners to tackle specific African challenges work with? value of sorghum, the ABS project will build project changed the lives of people through these projects. But long after these on progress made so far by using in the Chura Village? Science has contributed to greater prosperity challenges are met, look for Africa Harvest to biotechnology to develop a “super sorghum” and better lives for people around the world, continue to show the way with innovative Africa Harvest teamed with DuPont on a enhanced with the essential amino acids especially in developed countries. However, solutions to feed a growing African project aimed at boosting banana production (lysine and methionine), vitamin A, iron and the majority of people in developing population. in Chura. The focus was to use science to zinc through genetic biofortification. countries, especially in Africa and Asia, still make an immediate impact on the lives of the are poor, hungry and undernourished. Africa Harvest is working aggressively to change that. DuPont 2005 Annual Review 9 8
  7. 7. DuPont Agriculture & Nutrition Food is sustenance. Without a bountiful, safe, nutritious food supply for people and animals everywhere, sustainable growth has no meaning. The mission of DuPont Agriculture & Nutrition is to deliver global nutrition through higher crop yields and healthier foods while developing solutions to help meet the world’s energy needs. Pioneer® brand corn hybrids are the “gold which controls powdery mildew in cereals, standard” in agriculture. Farmers using received its first global registration in Poland. Pioneer hybrids won 23 of the 27 national Significant progress was made across the titles in the U.S. National Corn Growers Agriculture & Nutrition research pipeline in Association 2005 Yield Contest. The 2005. Advancements include the first of a new company debuted 95 new corn hybrids class of high efficacy, low toxicity insecticides, globally, combining exceptional yield potential and a new biotech herbicide resistance trait with insect protection and herbicide resistance. for corn, soybeans and cotton that maximizes With the U.S. regulatory approval of its yield potential, improves crop safety and Herculex® XTRA in 2005, Pioneer customers expands weed control options. now have access to the broadest in-plant protection from costly insects. Some Pioneer To continue to deliver the healthful benefits of hybrids also give processors 2-4 percent more soy to consumers, The Solae Company joined ethanol per bushel, increasing supply for this with Yoplait in France to introduce Bioplait valuable vehicle fuel. Pioneer launched 26 new yogurt with Solae® brand soy protein. The Bunge soybean varieties in 2005 and is increasingly DuPont Biotech Alliance is also working with being recognized as the soybean yield leader. Kellogg to increase production of Nutrium™, the company’s low linolenic soybean oil, which Pioneer made progress in the ever-growing helps eliminate trans fatty acids in foods. Brazilian market, increasing sales and brand loyalty by bringing customers into the hybrid And to improve sustainable agriculture and selection process through participation on a fight malnutrition, DuPont was proud to Product Advancement Team. The Brazil DuPont contribute technology and expertise to improve Crop Protection Team worked with Bunge the nutritional value of sorghum in parts of Limited to help deliver soybean protection Africa. The donation was made to Africa solutions to Brazilian farmers with greater Harvest to help support a $16.9 million grant efficiency and savings. from the Bill & Melinda Gates Foundation. Herculex® Insect Protection by Dow AgroSciences and Pioneer Hi-Bred. From the U.S. Great Plains, to Poland, to Herculex® is a registered trademark of Dow AgroSciences LLC. Argentina, DuPont Agriculture & Nutrition Photos: (Facing Page) DuPont Agriculture & Nutrition continued making remarkable advances in opens new horizons for farmers worldwide. (Left) crop protection. DuPont™ Finesse® grass and Talius® fungicide helps Polish agriculture fight broadleaf herbicide was so enthusiastically powdery mildew on cereals. (Right) Latin American farmers increase crop yield with the help of DuPont. received by American wheat growers that it sold out its launch. DuPont™ Talius® fungicide, Core Markets: Production Agriculture; Food Processing. 2005 Sales: $6.4 Billion DuPont 2005 Annual Review 11 10
  8. 8. DuPont Coatings & Color Technologies As more and more of the world’s citizens enter the “consumer society,” global opportunities have grown for DuPont Coatings & Color Technologies. The year 2005 was a clear illustration of how dramatic those opportunities really are—and how they can help drive sustainable growth in the years to come. From China to Mexico, DuPont Coatings & Artistri™ into new growth markets for flags, Color Technologies made 2005 a year of soft signage and t-shirts. significant achievements in worldwide markets. In the Americas, DuPont completed its That was especially true in China, where acquisition of Powder Coatings de Mexico, DuPont and the City of Dongying (Shandong strengthening the company’s position as a Province) signed a project agreement to leader in the powder coatings market build a world-class titanium dioxide (TiO2) throughout the Western Hemisphere. plant. Wholly-owned by DuPont, the plant Additionally, 2005 saw the acquisition of will be the company’s largest single investment the Standox-Max joint venture in Mexico, project outside the United States. With a resulting in the opening of an upgraded planned completion date of 2010, the plant distribution network. will have an initial capacity of 200,000 tons of The DuPont Aviation Finishes brand was TiO2 and will employ about 350 people, mostly launched as a key growth initiative, delivering from the Dongying area.Total investment is a complete product line of high-performance projected at more than $1 billion, including coatings for completion and refinishing of DuPont’s initial costs, facilities installed by the aircraft. Route-to-market was expanded in city and suppliers and eventual expansion. 2005 from general aviation OEM sales to 2005 also saw a milestone achievement in the general aviation-focused distributors. Japanese market as DuPont opened a $10 The growing worldwide presence of DuPont million laboratory in Aichi Prefecture. The new Coatings & Color Technologies is expected to facility is focused on the development and gain even greater momentum in 2006 with testing of automotive original equipment the launch of a commercial titanium powder manufacturer (OEM) coatings to meet the business. Harnessing the latest efficiencies in requirements of Japanese automakers and powder metallurgy, this effort is projected to rising consumer demands for aesthetics and dramatically reduce titanium part cost. durability. DuPont coatings go on one-third of Photos: (Facing Page) For architectural application, the vehicles produced by the world’s major DuPont provides decorative and functional powder automobile manufacturers. coatings, and for construction, specialty coatings for corrosion control and fire protection. (Left) DuPont™ Artistri™, a fully integrated DuPont OEM and Refinish coatings meet rising offering for digital textile printing, continued demands for aesthetics and durability. (Right) A new its rapid growth in global markets. In 2005, $10 million laboratory facility in Japan serves the ink and software innovations extended nation’s automakers. Core Markets: Automotive; Collision Repair; Paper; Industrial Coatings; Digital Printing; Architectural Coatings; Plastics. 2005 Sales: $6.2 Billion DuPont 2005 Annual Review 13 12
  9. 9. DuPont Electronic & Communication Technologies Where science and technology converge, amazing things begin to happen. Light is transformed into electrical energy, and new alternative energy sources emerge. Tiny chips and embedded components at the core of smaller, faster electronic devices enable more sophisticated functionality and new ways to connect globally. And we continue to seek more sustainable solutions for future growth. DuPont Electronic & Communication Technologies is leading the way… to a world of new possibilities. Incentives flourish to develop alternative DuPont Electronic & Communication energies from renewable resources as Technologies continues its rapid growth in today’s energy needs — and costs — increase. Asia, creating additional capacity for With expected growth in solar energy from DuPont™ Kapton® polyimide film at Toray photovoltaic (PV) technology averaging 25 DuPont Company in Japan. In Korea, a joint percent each of the next few years, DuPont is venture with Samsung’s Cheil Industries, establishing itself clearly as a leader in PV, SD Flex Company, is meeting the soaring with a broad portfolio of integrated materials. market demand for DuPont™ Pyralux® DuPont’s commitment to PV technology is flexible circuit materials. And, DuPont is demonstrated in part by the installation of the constructing a new fluoroproducts facility company’s first PV-based power system in to produce PTFE fine powders and dispersions Wilmington, Delaware. DuPont is also driving at its multi-product complex in China. the technology that will make fuel cells a commercial reality. In fluoroproducts, DuPont introduced a new product line of easy-to-use, non-ozone- Semiconductors are the foundation of electronics depleting retrofit refrigerants. Through the — and DuPont Electronic & Communication acquisition of the ISCEON® hydrofluorocarbon Technologies offers a growing portfolio of (HFC) refrigerant blends business from Rhodia, innovative materials for semiconductor DuPont is bringing even more sustainable fabrication, packaging and circuit applications. solutions to its global customer base. DuPont connects science and technology from across the company, spanning polymers, fibers, Buried Capacitance® is a registered trademark of Sanmina-SCI. photopolymers, dispersions, coatings and film to Photos: (Facing Page) Materials from DuPont enable advanced semiconductor manufacturing. Electronic & Communication Technologies help Another advance in electronics, DuPont™ photovoltaic cells create electricity from the sun’s rays. (Left) Non-ozone-depleting retrofit refrigerants Interra® HK polyimide laminates, is now offer globally sustainable solutions. (Right) licensed for widespread use with Innovative materials from DuPont are key to the Sanmina-SCI’s patented Buried Capacitance® manufacture of today’s electronics. technology. Interra® embedded passive materials are instrumental in the manufacture of smaller, more reliable electronic devices. Core Markets: Semiconductors; Printed Circuit Boards and Components; Communications; Displays and Imaging; Industrial Markets. 2005 Sales: $3.5 Billion DuPont 2005 Annual Review 15 14
  10. 10. DuPont Performance Materials Sustainable growth takes many forms. Advances in plastics technology can help sustain human life in an auto crash. Developments in polyester additives can improve the environmental efficacy of oil and gas piping. Advanced resins can give mobile phones the durability to survive the bumps and bangs of daily living. In short, when products are built to perform, they are built to endure. The market for car sunroofs grows at 10 to under the DuPont™ Pipelon® brand. Pipelon® 15 percent a year. And in the luxury car market represents an advancement in wear and especially, the growth has been driven by permeation properties of flexible on and so-called “panoramic” sunroofs, which can, offshore piping material. In addition, in some cases, stretch over the entire length benefits of Pipelon® include potential of a car’s roof. That certainly creates a capability to produce deeper operating pipe dramatic environment. But it also gives rise systems as well as environmental benefits to significant safety issues, especially in the through reduced permeation. event of a crash, as well as concerns about DuPont also enjoyed a substantial increase in weight. Neither single-layer tempered glass its business with mobile phone giant Nokia in nor standard laminated glass, the previous 2005, building on the ability of DuPont™ Zytel® benchmarks for sunroof technology, are ideal HTN to provide the improved durability and to accommodate larger designs. But DuPont™ performance needed for the next generation Spallshield® can. A composite of PVB and PET, of cell phones, with their larger screens and which is then applied to a single, standard increased requirement for damage resistance. layer of glass, Spallshield® provides all the DuPont became a true design and benefits of standard laminated glass, yet is development partner for Nokia, working closely five to eight times stronger and 25-30 percent with the company’s entire global supply chain lighter. The German company Webasto is in design, molding, testing and processing already using Spallshield® with its ProTec® support. Nokia’s embrace of HTN also led to glass, which debuted in 2005 on the new sales of DuPont™ Hytrel® and DuPont™ S and R class models from Mercedes-Benz. Delrin® polymers. The totality of the work As worldwide demand for oil and natural gas resulted in a DuPont Marketing & Sales increases dramatically, the petroleum industry Excellence Award in 2005. will need to invest billions more in exploration ProTec® is a trademark of Webasto AG. to meet global consumption estimated to rise to Photos: (Facing Page) DuPont Performance 100 million barrels per day by 2020. This Materials is driving for increased levels of safety increase in exploration requires high in auto sunroofs. (Left) Avon looks to DuPont for aesthetic and durable packaging solutions. (Right) performing, economical solutions for oil A water spacer jacket of DuPont™ Zytel® makes the and gas piping. DuPont has responded by Lexus V-6 engine about 1 percent more fuel-efficient. introducing a family of polymers and additives Core Markets: Automotive; Packaging; Construction; Consumer Durables; Electrical and Electronics. 2005 Sales: $6.8 Billion DuPont 2005 Annual Review 17 16
  11. 11. DuPont Safety & Protection Challenges to human health and safety are all around us. New diseases poised to sweep the globe. Infections make already vulnerable hospital patients even more vulnerable. Natural disasters threaten to sweep away the very fabric of our lives. Sustaining people in times of danger, and anticipating new threats, is the everyday work of DuPont Safety & Protection. The possibility of an avian flu pandemic was The DuPont product most associated with perhaps the major health-related news story safety and protection, DuPont™ Kevlar®, marked in 2005, as the disease has the potential to its 40th anniversary in 2005. And as proof that threaten human life and to disrupt the global the market for Kevlar® continues to grow as the food supply. DuPont Safety & Protection fiber enters its fifth decade, it can now be found fought back with a comprehensive approach in the world’s largest commercial jetliner, the to biosecurity featuring an integrated systems Airbus A380. In combination with its sister methodology: protective apparel; chemicals fiber, DuPont™ Nomex®, as well as a host of to clean and disinfect; and safety management other DuPont products, Kevlar® makes the A380 solutions. This multi-pronged approach to lighter, stronger and more durable. advancing food safety and quality was one DuPont Safety & Protection also enabled safer of the reasons DuPont was honored in 2005 lives in 2005 by joining more than 25 other with the prestigious Black Pearl Award by the International Association for Food Protection. major companies in committing to the DuPont-inspired World Safety Declaration, the To protect both patients and medical first-ever agreement by industry to the personnel from infections in the operating global improvement of workplace safety. room, DuPont Safety & Protection added DuPont’s pre-eminent position in safety was DuPont™ Suprel® to its arsenal of products. further demonstrated by its sponsorship of In addition to providing enhanced infection the World Congress on Safety and Health, protection, this innovative, high technology held in the United States for the first time in fabric offers a substantial advance in comfort 2005. Worldwide leadership on safety has under the high stress conditions of surgery. helped drive the growth of DuPont Safety DuPont Safety & Protection also made Resources as well, making it the premier significant inroads into the construction industry safety management consulting organization. with its new building innovations offering. Photos: (Facing Page) Firefighters and other first With increasing energy costs and the need responders count on DuPont Safety & Protection for for improved structural integrity (proven by high performance protective gear. (Left) DuPont™ the 2005 hurricane season in the United Building Innovations™ provides environmentally States), DuPont is providing answers with sustainable building solutions. (Right) DuPont™ products and integrated systems that define Kevlar® Comfort XLT™ enables vests to be 25 percent a building’s structural, environmental and lighter than existing aramid body armor. safety performance. Core Markets: Construction; Manufacturing; Consumer; Government; Health Care; First Responders. 2005 Sales: $5.2 Billion DuPont 2005 Annual Review 19 18