Invista’s Seaford Nylon Plant Has Potential to Gro

Seaford, DE, Mar. 24--As the DuPont Co. prepares to close a deal to sell its fibers unit to Koch Industries Inc., the future of its Seaford nylon plant is again in question, according to the News Journal. Indications are that the plant in Seaford - which gave the city the nickname "The Nylon Capital of the World" - will survive. Seaford's biggest customers - carpet makers - expect business to boom as the economic recovery accelerates. Koch has said nylon is vital to its plans for improving economies of scale at Invista, the world's largest man-made fibers company. DuPont's earlier job cuts, Koch's job offers to Seaford employees and new hires at the plant suggest that Koch believes the operation is productive. Still, the Seaford site faces challenges. DuPont has never overhauled the 65-year-old factory, and Seaford's nylon-producing rivals are hundreds of miles closer to customers in the carpet and textile industries. Invista spokeswoman Cheryl Parker said Koch hasn't explained its operating expectations for Seaford, which employs 650 people - down from 4,600 two decades ago. "Even if we had that context, it would be very inappropriate to comment," she said. Koch spokeswoman Mary Beth Jarvis wouldn't comment specifically on the prospects for Seaford. But in a Nov. 17 announcement of the deal, Koch cited Invista's carpet fibers as a key addition to its own KoSa polyester business, which makes fibers for seat belts and tires and resins for plastic bottles. In addition, DuPont disclosed in a regulatory filing earlier this month that Koch did not agree to buy all Invista properties that had been bundled for sale to the Wichita, Kan.-based company. DuPont provided few details, but Jarvis cited a fibers plant in Argentina. In other words, she said, Seaford and all other Invista properties that Koch is buying are valuable to the company. Koch and DuPont expect the sale to close April 30, though they have publicly announced a June 30 deadline. In 1939, DuPont first began spinning nylon commercially in Seaford, the crucible of the artificial fibers industry. In recent years, however, the industry DuPont created has burned its bottom line. Last year, Invista earned $13 million on sales of $6.9 billion, after taxes and excluding one-time charges. Overall, DuPont earned $973 million on sales of $27 billion. The price of oil and natural gas, needed to make as well as ship fibers, cut 38 cents out of every DuPont profit dollar last year and probably won't ease in 2004, Chief Executive Charles O. Holliday Jr. told analysts earlier this month. A year ago, DuPont also told regulators it believes there is too much nylon-making capacity worldwide, another factor that has been driving down prices. Seaford's million square feet of floor space alone could fit six standard-sized Wal-Marts. And foreign rivals, especially in China, continue to undersell Invista with cheaper labor. But Koch, the nation's second-largest privately held company behind grain merchant Cargill Corp., doesn't have to answer to Wall Street, making it more likely to ride out the volatility in the fibers industry. "Koch's private status positions it to weather the cycles of the man-made fibers and resins businesses and respond quickly to market developments," the company said in November. Koch's ability to wait for the next upturn might help Seaford more than anything else, as the industry anticipates more demand for nylon carpet. Demand is expected to increase when the commercial real estate industry - one of the most recession-scarred sectors - comes to, said Werner Braun of the Carpet and Rug Institute in Georgia. Hotels and offices prefer nylon carpet for its durability and cost. "There is so much pent-up demand, especially in the hospitality industry and the corporate sector," he said.