DuPont 2005 Annual Report Download - page 31

Part II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations–Continued
Technology will continue to play an important role for Agriculture & Nutrition. Pioneer will build on their global product
offerings with the addition of 20 new soybean varieties and 90 new Pioneer brand corn hybrids. In late February, 2006,
DuPont announced an agreement with Syngenta to acquire certain crop protection product rights and to sell an exclusive
license to technology, on which a gain is expected to be recognized in the first half of 2006.
Segment
Sales PTOI
(Dollars in billions) (Dollars in millions)
2005 $6.2 $564
2004 6.0 718
2003 5.5 735
Coatings & Color Technologies is one of the world’s leading automotive coatings suppliers and the world’s largest manufacturer
of titanium dioxide white pigments. Products offered include high performance liquid and powder coatings for automotive
OEMs, the automotive aftermarket (known as refinish), and general industrial applications, such as coatings for bridges,
windmills, heavy equipment, pipes and appliances. The company markets its refinish products using the DuPont, Standox,
Spies Hecker, and Nason brand names. Standox and Spies Hecker are focused on the high-end refinish markets, while
Nason is primarily focused on economy coating applications. The segment’s broad line of DuPont Ti-Pure titanium dioxide
products, in both slurry and powder form, serve the coatings, plastic, and paper industries. The segment also offers specialty
products for ink jet digital printing including pigment and dye based inks and the DuPont Artistri printing systems for
textiles. Specialty products include adhesive bonding and electrical insulation.
The key markets in which Coatings & Color Technologies operates continued to grow in 2005, with more significant growth in
the Latin America and Asia Pacific regions. A key driver of the segment’s sales growth in 2005 was the successful implementa-
tion of global price increases, most notably, for titanium dioxide white pigment and refinish products. Global demand for
titanium dioxide white pigment remained consistent with 2004 levels. Sales volumes for major global producers of titanium
dioxide white pigment declined by approximately 4 to 6 percent, while volumes increased for small producers in China, India,
and Eastern Europe which generally provide lower performance and lower price products. During the first half of the year, the
company’s market share grew slightly; however, share in the second half declined as a result of hurricane damage to the
company’s DeLisle plant.
Sales for refinish products grew in all regions, most notably in the U.S., Europe, and Latin America. While the OEM market
realized growth in Latin America, it was more than offset by declines in the U.S., Europe, and Asia Pacific. This reflects flat or
lower North American and European builds of automobiles and light trucks. Powder coatings remained flat in Europe, while the
demand in the U.S. and Latin America showed improvement. Worldwide sales in the specialty coatings, electrical insulation
and metal coatings markets continued to improve, while adhesives remained flat.
2005 versus 2004 Sales of $6.2 billion were up 3 percent, reflecting 6 percent higher USD selling prices, partly offset by
3 percent lower volumes. Higher selling prices reflect concerted efforts within the segment to increase prices for the majority
of its products as part of its efforts to offset the impact of higher raw material costs. Sales volumes were lower due to the
DeLisle plant outage and the impact of lower global OEM automotive volumes. During the year approximately 360 new products
and product applications were introduced.
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COATINGS & COLOR TECHNOLOGIES