R&D will be a key strength of the new DuPont, but projects will need to have strong business cases to survive, Ed Breen, current CEO of DowDuPont and future executive chairman of DuPont, told an audience in New York City last week.
At a March 7 event organized by the Chemical Marketing & Economics Group of the American Chemical Society, Breen outlined the role research will play at the future DuPont, which is set to separate from DowDuPont on June 1 along with agricultural chemical maker Corteva Agriscience. Dow will reemerge as an independent company on April 1.
The new DuPont will have businesses in advanced polymers, electronics, construction, and nutrition and biosciences. In all, it will spend about $900 million annually on R&D, Breen said.
Breen has been outspoken about his aversion to “moonshot” R&D projects, which he has said are costly and uncertain to succeed commercially. Instead, he favors more modest R&D initiatives driven by customer needs.
The executive elaborated on his position at the event. “I am not against the long-term project at all,” he insisted. “What I was against was when I got to DuPont, we were spending $220 million in an organization called Central R&D that had no P&L”—profit and loss responsibility—“wasn’t tied to a business, and wasn’t tied to an industry,” he said.
Breen moved to close Central R&D at the end of 2015 and push R&D closer to the firm’s business segments. “I don’t want to just have everyone playing in the sandbox and doing the moonshots,” he said. “And that $220 million, I’d rather embed it in a business.”
The new DuPont will be disciplined in how it spends money in R&D and will track project progress “maniacally,” Breen said. “Not every project is going to work. That’s fine. Maybe 20% don’t work, but you need to learn when to kill them.”
Some projects don’t die, he warned. “Even when you think you killed it, 20 people go off in a corner and they keep working on it for five more years.”