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Bill Would Block DuPont Foreign Rival

01 August 2003

The DuPont Co. would become the military's only source of Kevlar fiber for bullet-resistant helmets and vests under US House legislation to boost U.S.-made products.

A provision in the bill would repeal a 1999 law that allowed the Pentagon to buy from foreign competitors, such as Teijin Twaron BV, a Netherlands-based maker of aramid fiber. DuPont said the law is outdated. Teijin said the repeal would lead to higher prices for U.S. taxpayers.

The one-sentence provision is in the ""Buy American"" section of a $400 billion House military bill. The Senate bill excluded the provision. The House and Senate are negotiating a compromise.

Fibers by DuPont and Teijin are distributed to U.S. companies that make helmets and protective vests for U.S. troops. DuPont doesn't disclose revenues for individual products, but Kevlar is a mainstay of the company's safety and protection business, which last year accounted for $3.5 billion of DuPont's $24 billion in net sales.

Limiting purchases to U.S. companies is ""inconsistent"" with a policy to spur competition, the Pentagon told a Senate committee in opposing the repeal. ""These products save lives, and they should not be subject to more requirements that serve to delay their delivery to those in harm's way only to benefit the interests of a sole source,"" the Pentagon said.

DuPont said the 1999 law is now obsolete and unfair because Honeywell International Inc. makes Spectra Shield thermoplastic fibers that provide the backing for ceramic chest and back plates of the vests. ""We do have competitors to the DuPont Kevlar product in the marketplace,"" said Alexa Dembek, global business manager for DuPont's life protection products and services business, based in Richmond, Va.

Dembek said the provision also is unfair because the Defense Production Act essentially requires DuPont to produce Kevlar on demand. ""These provisions are not enforceable on foreign companies,"" she said. Sen. Zell Miller, a Democrat from Georgia, where Teijin Twaron has a distribution center, is campaigning to retain the McCain provision.

""This repeal seems unjustified,"" Miller wrote last month to Senate Armed Services Committee Chairman John Warner, R.-Va. ""Once the market was opened allowing several firms to offer competitively priced para-aramid fibers, the result was over a $6 per pound drop in the price.""

The Marine Corps has selected Twaron for the primary material in a new class of protective helmets because of its lighter weight and cost, said James Mackiewicz, manager of Marine Corps products for the Army Soldier Center. ""You don't want to be a slave to DuPont,"" he said. ""We love working with DuPont, and both DuPont and Honeywell materials are great. But one product or two products shouldn't dictate what's available to U.S. forces. You need all three companies.""






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