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Safety

DuPont’s safety segment is going solo

DuPont’s Sustainable Solutions consulting arm will soon spin off as its own company

by Alexander H. Tullo
March 25, 2019 | APPEARED IN VOLUME 97, ISSUE 12

 

09712-feature4-dupont.jpg
Credit: Transport For London/Ewen Rankin
Work being done on the London Underground's Victoria line at Walthamstow

A single DuPont business counts among its clients General Mills, Danone, Saline Water Conversion Corp. of Saudi Arabia, Cadbury, American Airlines, Aditya Birla Chemicals, and the London Underground.

The business isn’t one of those DuPont manufacturing divisions—like construction materials or electronic chemicals—that touch many facets of society. The business is DuPont Sustainable Solutions (DSS), the firm’s consulting unit.

In July, DSS will leave DuPont to become a stand-alone company. DuPont is selling it to the Swiss private equity firm Gyrus Capital for an undisclosed amount as part of a program to divest 10% of its portfolio.

DuPont executives are jettisoning businesses they don’t see as having high growth potential. Davide Vassallo, DSS’s global managing director, begs to differ. He sees a lot of growth ahead as DSS expands beyond its historical practice and rolls out new technologies.

DSS is surprisingly large. It generated about $170 million in revenues in 2018 and employs 600 consultants, in addition to more than 200 contractors. About 60% of DSS’s practice is risk management, the shoe-leather work of inspecting clients’ facilities and making safety recommendations.

“We try to understand what are the biggest risks and how do they mitigate those risks,” Vassallo says. “Risk awareness is an incredible challenge for some organizations.”

Another 20% of the practice is employee training, usually related to safety. The rest is operations consulting, aimed at efficiency improvements.

Vassallo doesn’t see much distinction between safety and efficiency. “Good safety is good business,” he says. “When you have good safety, that means you have control of your operations. And if you’re in control, of course you can drive business improvement as well.” Additionally, accidents incur direct costs related to injuries, insurance premiums, and disruptions.

Steve Bolton, research director for environment, health, and safety (EHS) at the research firm Verdantix, says DSS is starting life as a stand-alone company at a time when its services should be in demand, as companies are increasingly concerned with how safety issues might affect their reputations. “The EHS function is becoming more recognized across firms in terms of the value it creates,” he says.

DuPont recognized this early. DSS originated in the late 1960s when DuPont decided to sell to third parties the safety knowledge it cultivated for itself. The practice quickly branched out beyond chemical companies; today, the industry accounts for only about a quarter of DSS’s clients.

“The way risks are managed in the chemical industry is a best practice compared with many other industries,” Vassallo says. “We are a successful business because we bring practices from the chemical industry to other industries.”

Indeed, the chemical business is safer than other industries. According to the US Bureau of Labor Statistics, private industry overall recorded a rate of nonfatal workplace injuries and illnesses of 2.8 per 100 full-time workers in 2017. The injury rate was 3.5 in manufacturing but only 2.0 in the chemical sector.

DSS’s clients are far flung in terms of sector and geography, as the many case studies it has published show.

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For instance, in 2005, it worked at Cadbury’s sites in Australia, where the candy maker’s employees “had become accustomed to long-standing work practices without assessing their safety,” a case study says. DSS taught managers and workers to identify hazards in activities like materials handling. As a result, incidents declined to less than a tenth of their original levels.

A 2011 safety program DSS recommended broke General Mills’ habit of instituting safety policies on a plant-by-plant basis rather than company-wide. It yielded a more than 50% decline in injuries. At the London Underground, where workers toil amid moving trains and high-voltage lines, DSS helped institute a program in which senior managers personally conduct safety investigations. Reportable incidents dropped by 66%.

In its operations practice, DSS pushed the Saline Water Conversion Corp. of Saudi Arabia toward a goal of increasing water production from desalination plants by 65% to 5.5 million m3 per day. DSS identified more than 100 initiatives, helping the company mostly meet its target without additional capital spending.

DSS is DuPont’s in-house safety consultancy as well. For example, DuPont initiated a project at the Hopewell, Virginia, site of DuPont Teijin Films in 2016 after a pair of lost-time injuries. Large rolls of polyester film at the plant can cause serious injury.

“Many of our people have been here so long that hazards are like wallpaper to them,” Mark Allen, the site’s manager, said at the time.

Under the terms of its departure, DSS will continue to work for DuPont for seven years. It will be entitled to use the DuPont name for three years and the DuPont logo for 18 months. “We will expand beyond DuPont,” Vassallo says. “That is the reason for the divestiture.”

As an independent company, Vassallo says, DSS will sharpen its focus on behavior.

“The majority of incidents across industries are happening because of the human factor, not because of a technical factor,” he says. You can check equipment, “but how do you check a human being?” In addition to proper training, solutions include monitoring employees’ physical well-being, such as whether they have gotten enough sleep.

Vassallo also wants to make better use of technology. “The safety space has not been very innovative in the past 20 or 30 years,” he says. “We see that there is an opportunity to bring innovation through wearables, smart personal protective equipment, data analytics, and control technologies.”

Verdantix’s Bolton agrees, saying that companies are increasingly interested in deploying technology such as Fitbit-like devices that monitor location or determine whether a worker is perspiring too much, is breathing heavily, or has fallen. “Technology is a perfect tool to enable better data gathering and incident prevention,” he says.

Late last year, DSS branched out further, introducing a practice in innovation management. But expanding beyond its main practice doesn’t mean DSS won’t also be what it always was, according to Vassallo.

“When you think about DSS, you should be thinking about boots on the ground, former plant managers and engineers who go in and solve problems,” he says. “That is what we will continue to do.”

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