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Clariant enjoys a good start to 2016; reveals new tailored strategy for Greater China
FINANCIALS
The new speciality silicones facility is being constructed at the Multi-User-Site (MUSC) in the Shanghai Chemical Industry Park. The expanded production capacity will allow the company to meet rising demand for these materials in Asia with local production, explains Evonik’s chairman Klaus Engel. ‘With this investment, we are strengthening our position as market and technology leader’, he says. The company reports that the project is also part of a global investment initiative in speciality silicones, following the commissioning of an expanded production plant in Essen, Germany, in late 2014. Evonik claims to be a world leader in the provision of organically modified speciality silicones. The group’s global production facilities, research and development centres, and local application laboratories ‘offer technical advisement, customized products and local on-site service’ to customers, it says. Markets for speciality silicones, which serve a wide range of applications in numerous industries, have ‘grown substantially’ in recent years, according to Evonik. As additives for plastics, they are responsible for comfortable furniture, car seats and ergonomic mattresses, the company says. Speciality silicones also play an important role within the formulation of polymeric foams for building insulation, and act as defoaming agents in the processing of plastics, textiles and construction materials. In addition, they are used in coatings and inks. ‘Based on our successful business operations in Shanghai for more than 15 years, we want to continue to support the success and growth of our customers in Asia and beyond as a reliable partner’, comments Dr Hans Josef Ritzert, member of the board of Evonik Nutrition & Care GmbH. Contact: Evonik Industries AG, Essen, Germany. Tel: +49 201 177 3333, Web: www.evonik.com
FINANCIALS Clariant enjoys a good start to 2016; reveals new tailored strategy for Greater China
F
or the first quarter of 2016, Swiss speciality chemicals major Clariant International reported sales from continuing operations of CHF1.478 billion (c. €1.36 billion), up 1% compared to sales
10
Additives for Polymers
of CHF1.465 billion in 1Q 2015. However, this corresponds to sales growth of 3% in local currencies, driven by higher volumes. EBITDA before exceptional items from continuing operations reached CHF229 million in 1Q 2016, up 16% in local currencies year on year. The EBITDA margin before exceptionals increased to 15.5%, well above the previous year’s level of 14.1%, Clariant reports. By region, growth in the Americas was good, with sales in local currencies up 11% in Latin America and 4% in North America. In Europe, sales were up 1% in local currencies, while in the Middle East & Africa local currency sales grew by 5%. Lower growth came from the Asian region, where sales in local currencies decreased by 1%, affected by a weak demand in China that could not be compensated by the stronger demand from the region’s smaller economies, Clariant says. Looking at the company’s different Business Areas, the improved sales came primarily from higher growth in Care Chemicals and Plastics & Coatings, up 7% and 4% respectively in local currencies. Sales in Catalysis declined by 4% in local currencies, primarily due to declines in Asia (mainly in China) and Europe, while sales in Natural Resources fell 2% in local currencies despite good growth in Latin America and Asia. Sales in Clariant’s Plastics & Coatings Business Area totalled CHF639 million in 1Q 2016, up 3% (4% in local currencies) from CHF619 million a year earlier. The sales increase was experienced across all regions, but was primarily driven by emerging markets, the company reports. Latin America achieved double-digit sales growth in local currencies, while Europe, Asia, North America and the Middle East & Africa had single-digit growth. In Pigments, sales grew across all regions, with Asia driven by a stable business in China and very strong growth in India. In addition, year-on-year growth in Coatings and in Special Applications contributed to the positive development. In Masterbatches, sales also grew across all regions, with North America, Latin America and the Middle East & Africa contributing most. Across the segments there was particular growth in Packaging, Consumer Goods and Medical Specialties. Additives sales were stable versus a good first quarter in 2015. Positive development was primarily experienced in the Americas and Europe, while Chinese demand in the Electronics segment remained weak. Polymer Additives & Waxes remained strong with some market weakness still seen in Flame Retardants,
June 2016
FINANCIALS
Clariant reports. Plastics & Coatings’ EBITDA before exceptional items grew significantly by 26% in local currencies to CHF105 million, up from CHF84 million in 1Q 2015. This was the result of a better mix effect as well as the effect of the differentiated business steering in the Business Area since the beginning of January 2016, Clariant says. The associated margin also jumped from 13.6% in 1Q 2015 to 16.4% in the same quarter this year and was a major contributor to the company’s overall improved EBITDA margin for the quarter. In other news, Clariant has announced that it is taking ‘decisive measures’ to manage its Greater China market differently. To this end, it has formulated a tailored strategic framework for the region – which includes mainland China, Taiwan and South Korea – focusing on five local components (5Ls): Local Insight, Competitiveness, Empowerment, Innovation and Partnership. This 5Ls strategy aims to bring the region into more focus and progress Clariant’s commitment to becoming a true ‘China Insider’, the company says. The region accounted for 11% of Clariant’s global sales in 2015. Among the steps the company is taking in pursuit of its new regional strategy is the relocation of executive committee member Christian Kohlpaintner to China in order to strengthen local decision-making. As he explains, China is ‘a decisive market’ for Clariant with growth of about 7%/ year expected in its speciality chemicals sector. ‘There is a clear trend for more consumption-driven growth, with increasing consumer demands and a shift towards innovative products and service offerings. We are convinced that it is of utmost importance to understand China better and to become a China Insider in order to succeed in this important market’, Kohlpaintner says. Other measures include a new integrated facility for Shanghai to strengthen capabilities in the region and step up local innovation. The so-called One Clariant Campus will feature the company’s new Greater China regional HQ and a new regional Innovation Centre. Ground-breaking is scheduled to take place at the end of 2016. Enhancing local competitiveness is to be addressed by even more aggressive investment, with 40% of Clariant’s global
June 2016
investments in 2017 set to happen in China. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6742, Web: www.clariant.com
PolyOne reports earnings growth in 1Q 2016
I
n the quarter ended 31 March 2016, PolyOne Corp achieved net income attributable to the company’s shareholders of US$39.1 million on revenue of $847 million. This compares to net income of $30.2 million and revenue of $873 million in 1Q 2015. According to CEO Robert M. Patterson, underlying growth of 4% plus revenue from the acquired Magenta colorants [ADPO, February 2016] and Kraton TPE businesses led to an increased sales volume of 5% in 1Q 2016. The company increased its sales force by nearly 10% in 2015 and further invested in technology to ‘better serve’ its customers, and Patterson attributed the sales gains primarily to these measures, as well as the company’s ‘commitment to specialization’. However, the gains were more than offset by lower selling prices in Distribution, Performance Products and Solutions, and Designed Structures and Solutions, due to lower hydrocarbon-based raw material costs. In addition, a weaker euro impacted Color, Additives and Inks, and Engineered Materials. The Color, Additives and Inks segment posted sales of $204.9 million in 1Q 2016, down about 2% from sales of $208.5 million the previous year. Operating income increased by 3.3% to $34.9 million from $33.8 million in 1Q 2015. PolyOne expects the segment to ‘show momentum’ throughout the year as the increased commercial resources added last year gain traction. Contact: PolyOne Corp, Avon Lake, OH, USA. Tel: +1 440 930 1000, Web: www.polyone.com
Additives for Polymers
11
The new speciality silicones facility is being constructed at the Multi-User-Site (MUSC) in the Shanghai Chemical Industry Park. The expanded production capacity will allow the company to meet rising demand for these materials in Asia with local production, explains Evonik’s chairman Klaus Engel. ‘With this investment, we are strengthening our position as market and technology leader’, he says. The company reports that the project is also part of a global investment initiative in speciality silicones, following the commissioning of an expanded production plant in Essen, Germany, in late 2014. Evonik claims to be a world leader in the provision of organically modified speciality silicones. The group’s global production facilities, research and development centres, and local application laboratories ‘offer technical advisement, customized products and local on-site service’ to customers, it says. Markets for speciality silicones, which serve a wide range of applications in numerous industries, have ‘grown substantially’ in recent years, according to Evonik. As additives for plastics, they are responsible for comfortable furniture, car seats and ergonomic mattresses, the company says. Speciality silicones also play an important role within the formulation of polymeric foams for building insulation, and act as defoaming agents in the processing of plastics, textiles and construction materials. In addition, they are used in coatings and inks. ‘Based on our successful business operations in Shanghai for more than 15 years, we want to continue to support the success and growth of our customers in Asia and beyond as a reliable partner’, comments Dr Hans Josef Ritzert, member of the board of Evonik Nutrition & Care GmbH. Contact: Evonik Industries AG, Essen, Germany. Tel: +49 201 177 3333, Web: www.evonik.com
FINANCIALS Clariant enjoys a good start to 2016; reveals new tailored strategy for Greater China
F
or the first quarter of 2016, Swiss speciality chemicals major Clariant International reported sales from continuing operations of CHF1.478 billion (c. €1.36 billion), up 1% compared to sales
10
Additives for Polymers
of CHF1.465 billion in 1Q 2015. However, this corresponds to sales growth of 3% in local currencies, driven by higher volumes. EBITDA before exceptional items from continuing operations reached CHF229 million in 1Q 2016, up 16% in local currencies year on year. The EBITDA margin before exceptionals increased to 15.5%, well above the previous year’s level of 14.1%, Clariant reports. By region, growth in the Americas was good, with sales in local currencies up 11% in Latin America and 4% in North America. In Europe, sales were up 1% in local currencies, while in the Middle East & Africa local currency sales grew by 5%. Lower growth came from the Asian region, where sales in local currencies decreased by 1%, affected by a weak demand in China that could not be compensated by the stronger demand from the region’s smaller economies, Clariant says. Looking at the company’s different Business Areas, the improved sales came primarily from higher growth in Care Chemicals and Plastics & Coatings, up 7% and 4% respectively in local currencies. Sales in Catalysis declined by 4% in local currencies, primarily due to declines in Asia (mainly in China) and Europe, while sales in Natural Resources fell 2% in local currencies despite good growth in Latin America and Asia. Sales in Clariant’s Plastics & Coatings Business Area totalled CHF639 million in 1Q 2016, up 3% (4% in local currencies) from CHF619 million a year earlier. The sales increase was experienced across all regions, but was primarily driven by emerging markets, the company reports. Latin America achieved double-digit sales growth in local currencies, while Europe, Asia, North America and the Middle East & Africa had single-digit growth. In Pigments, sales grew across all regions, with Asia driven by a stable business in China and very strong growth in India. In addition, year-on-year growth in Coatings and in Special Applications contributed to the positive development. In Masterbatches, sales also grew across all regions, with North America, Latin America and the Middle East & Africa contributing most. Across the segments there was particular growth in Packaging, Consumer Goods and Medical Specialties. Additives sales were stable versus a good first quarter in 2015. Positive development was primarily experienced in the Americas and Europe, while Chinese demand in the Electronics segment remained weak. Polymer Additives & Waxes remained strong with some market weakness still seen in Flame Retardants,
June 2016
FINANCIALS
Clariant reports. Plastics & Coatings’ EBITDA before exceptional items grew significantly by 26% in local currencies to CHF105 million, up from CHF84 million in 1Q 2015. This was the result of a better mix effect as well as the effect of the differentiated business steering in the Business Area since the beginning of January 2016, Clariant says. The associated margin also jumped from 13.6% in 1Q 2015 to 16.4% in the same quarter this year and was a major contributor to the company’s overall improved EBITDA margin for the quarter. In other news, Clariant has announced that it is taking ‘decisive measures’ to manage its Greater China market differently. To this end, it has formulated a tailored strategic framework for the region – which includes mainland China, Taiwan and South Korea – focusing on five local components (5Ls): Local Insight, Competitiveness, Empowerment, Innovation and Partnership. This 5Ls strategy aims to bring the region into more focus and progress Clariant’s commitment to becoming a true ‘China Insider’, the company says. The region accounted for 11% of Clariant’s global sales in 2015. Among the steps the company is taking in pursuit of its new regional strategy is the relocation of executive committee member Christian Kohlpaintner to China in order to strengthen local decision-making. As he explains, China is ‘a decisive market’ for Clariant with growth of about 7%/ year expected in its speciality chemicals sector. ‘There is a clear trend for more consumption-driven growth, with increasing consumer demands and a shift towards innovative products and service offerings. We are convinced that it is of utmost importance to understand China better and to become a China Insider in order to succeed in this important market’, Kohlpaintner says. Other measures include a new integrated facility for Shanghai to strengthen capabilities in the region and step up local innovation. The so-called One Clariant Campus will feature the company’s new Greater China regional HQ and a new regional Innovation Centre. Ground-breaking is scheduled to take place at the end of 2016. Enhancing local competitiveness is to be addressed by even more aggressive investment, with 40% of Clariant’s global
June 2016
investments in 2017 set to happen in China. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6742, Web: www.clariant.com
PolyOne reports earnings growth in 1Q 2016
I
n the quarter ended 31 March 2016, PolyOne Corp achieved net income attributable to the company’s shareholders of US$39.1 million on revenue of $847 million. This compares to net income of $30.2 million and revenue of $873 million in 1Q 2015. According to CEO Robert M. Patterson, underlying growth of 4% plus revenue from the acquired Magenta colorants [ADPO, February 2016] and Kraton TPE businesses led to an increased sales volume of 5% in 1Q 2016. The company increased its sales force by nearly 10% in 2015 and further invested in technology to ‘better serve’ its customers, and Patterson attributed the sales gains primarily to these measures, as well as the company’s ‘commitment to specialization’. However, the gains were more than offset by lower selling prices in Distribution, Performance Products and Solutions, and Designed Structures and Solutions, due to lower hydrocarbon-based raw material costs. In addition, a weaker euro impacted Color, Additives and Inks, and Engineered Materials. The Color, Additives and Inks segment posted sales of $204.9 million in 1Q 2016, down about 2% from sales of $208.5 million the previous year. Operating income increased by 3.3% to $34.9 million from $33.8 million in 1Q 2015. PolyOne expects the segment to ‘show momentum’ throughout the year as the increased commercial resources added last year gain traction. Contact: PolyOne Corp, Avon Lake, OH, USA. Tel: +1 440 930 1000, Web: www.polyone.com
Additives for Polymers
11