French emigre Eleuthere Irenee du Pont de Nemours failed to achieve his family's dream of developing a new French colony in North America; instead, he started DuPont in 1802. The company grew steadily over the years, thanks to government contracts, several innovations in consumer goods, and diversification into new industries. One such industry was energy, which DuPont took by storm when it acquired Conoco in 1981. It also moved into pharmaceuticals by establishing a joint venture with Merck.

Today, DuPont is the largest chemical company in the U.S. and one of the world's largest diversified industrial concerns, with facilities in more than 40 different countries. Its vast product line includes Teflon resins, carpeting and textile fibers, Mylar film, and a wide range of industrial chemicals. With more than 80 separate research and development facilities, DuPont is at the forefront of technological innovation.

Recent difficulties

DuPont's financial figures reflect the enormity of its operations. Sales in fiscal 1997 were over $45 billion (before adjustments). But recent history has been marked by turmoil for the Delaware giant. Net income for the year was down from $3.6 billion to $2.4 billion. The trend continued in the second quarter of the following year, as the company failed to post record earnings for the first time in 16 consecutive quarters. Results were even bleaker in the third quarter, when DuPont posted a $605 million loss.

The poor results were attributable to a number of factors, including low oil prices and increasing competition in the agricultural chemical business. But far more important, the period exposed DuPont's vulnerability to the collapse of foreign markets. The Asian financial crisis crippled the firm, as prices and sales plummeted, currency devalued, and Russian customers defaulted on payments. Rather than panic, however, new CEO Charles O. "Chad" Holliday took action, deploying a team of executives to Asia to investigate the problem and to come up with possible solutions. To weather the crisis, he took measures to improve productivity in the region, made new investments, and shored up relations with customers.

Holliday's efforts appear to have been successful; revenues and net income levels both recovered in fiscal 1999. However, the gains were not without cost; DuPont terminated nearly 7,000 jobs in departments that included the struggling polyster and crop protection units.

Taking care of business

Back on the home front, DuPont has made news with several important moves. In October 1998 it purchased the paints and coatings business of Herberts from Hoechst for $1.89 billion. It also paid $2.6 billion for Merck's 50 percent stake in DuPont Merck Pharmaceutical Co. The venture accounted for $1.3 billion in 1997 sales; the now wholly-owned subsidiary is expected to have a major impact on DuPont's fortunes in the future. One year later, DuPont acquired Pioneer Hi-Bred International Inc., and it invested $220 million in WebMD.

Expansion in life sciences

DuPont is banking a great deal of its future on the growth of its life sciences (food and pharmaceutical development) division. Now dubbed DuPont Pharmaceuticals, the unit is the centerpiece of an effort intended to increase life sciences to 35 percent or more of total sales. It functions under the guidance of new president Nicholas L. Teti. Among the unit's extensive catalog of drugs are anticoagulant Coumadin, Parkinson's disease treatment Sinemet/CR, and hypertension medications Cozaar and Hyzaar. The company moved further toward its goal in September 1998, when the FDA approved its one dose-per-day AIDS treatment, Sustiva. Within months, most states added Sustiva to their Medicaid and AIDS Drug Assistance Program (ADAP) formularies.

Cashing in

October 1998 saw DuPont make a $4.4 billion public offering of a 30 percent portion of Conoco. The next summer, DuPont completed a spin-off of the company, an act that infused DuPont with a considerable amount of cash. After the deal, DuPont formed joint ventures with General Mills, and with the Internet Capital Group. Insiders expect that the company will further seek to expand its life sciences and its chemicals and materials business.

Some legal headaches