M. Rifki Widya Hariadi (PAMA)ASrMP Batch 1 - 2015E.I. du Pont de Nemours and Co. : Titanium DioxideE.I. du Pont de Nemours and Co. is a 17th largest manufacturing corporation in the US in 1971 with reported earnings of $357 million on sales of $4.4 billion which diversified its product as manufacturers of fibers, plastics, industrial chemicals and other specialty chemical products. Du Pont organized in to 10 industrial departments of which pigment department was the second smallest department with sales of approximately $180 million in 1971 and was responsible for Titanium Dioxide (TiO2)TiO2 is a white chemical agent used in the manufacturing of paints, paper, synthetic fibers, plastics, ink and synthetic rubber. Acts as a whitening and opacifying agent and has no commercially satisfactory substitute.Between 1970 and 1971, a sudden shortage of rutile ore is occurring made the price rose from AUD 65 per ton in 1960 to AUD 110 per ton in 1972. The economics of high-chloride technology were altered radically. While it happening sulfate process plant were force to make a major expenditures to comply with newly enacted environmental protection legislation in the same period.TiO2 is produced from either ilmenite, rutile ortitanium slag. Titanium pigment is extracted by using either sulphuric acid (sulphate process) orchlorine (chloride route). The sulphate process employs simpler technology than the chloride route and can use lower grade, cheaper ores. However, it generally has higher production costs and with acid treatment is more expensive to build than a chloride plant. But the latter may require the construction of a chlor alkali unit.Excess demand created capacity expansion opportunities for TiO2 producers. The competitors had two alternative for expansion: upgrading marginally profitable sulfate and rutile chloride plants or building ilmenite chloride plants. This alternative require large scale facilities and extensive experience to be made economically viable. The risk is rising up while competitors might simultaneously chose to add capacity and flood market even though competitors only assumed risk of technical failure, delayed startup are usual. The strength of du Pont compared to others are easy access to ilmenite ore, possessed operational knowledge of ilmenite chloride process making production economically viable, exorbitant price hike in rutile ore had negligible impact on Du Pont, other players were forced either to shut down or move to chloride ilmenite process due to the transition in TiO2 market. So in my opinions in the matter of leading, what supposed du Pont do are:1. Expansion of capacity was premature and designed to exclude competitors from expansion.2. The expansion was designed to capture all the projected growth in demand, foreclosing any opportunities for competitors.3. Exploitation of its cost Easy access to ilmenite ore advantage to keep prices low so competitors couldnt expand.But will the business sustain? If accepted the TiO2 growth strategy will make Du Pont come up with massive capital expenditure program that reach half billion USD by 1985. But the economic is growing (at the moment), the rise of infrastructure business, and the need of quality papers made the need of titanium dioxide might sustain. So if Du Pont managed to lead the market, it will seize the moment.s