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Chemical merger and acquisition activity accelerates
FOCUS programme, the SME introduced improvements resulting in a 15% drop in emissions; installation of heat exchangers, insulation and other initiatives also brought energy savings. CEFIC Responsible Care, Dec 2009, (20082009), 18-19 (European Council Industry Council, Avenue E van Nieuwenhuyse 4, B-1160 Brussels, Belgium, tel: +32 2 676 7211; fax: +32 2 676 7300; website: http://www.cefic.org)
MARKETS Aerospace coatings market beginning to recover The US aerospace coatings market continues to be affected by tough economic conditions, but the market is now starting to pick up on the back of rising demand for chrome-free coatings and a flourishing military aviation segment. Figures from Chemark Consulting showed that the US aerospace coatings market was worth roughly $140 M in 2008. The commercial aircraft segment dominated the market with a 73.5% of market share, followed by the military segment with 22.5% and general aviation with 5%. Demand for both original equipment (OE) and maintenance coatings in the commercial and general aviation segments remains weak because of continued economic pressure. The military segment, in contrast, is experiencing robust growth as a result of higher defence spending. The aerospace coatings market is also being driven forward by demand for greener products that can reduce total costs by cutting cycle times, and enhancing performance and durability. Leading the qualification of chrome-free primers and the search for an alternative to chrome pretreatment is the military segment. Deft’s zerochrome system, including pretreatment and primer, is being tested for the US Airforces’ F-15 and the Norwegian Air Force’s F-16. Like Deft, AkzoNobel is also working to make all its 6
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products chrome-free. The company recently introduced the Aerowave range of waterborne structural coatings, which includes a corrosion inhibiting primer, topcoat and composite primer. All products in the Aerowave series are approved by Airbus and contain VOC of below 250 grams/litre. Sherwin-Williams Aerospace Coatings also launched a full line of chromefree primers without lead hazards. Coatings World, Aug 2010, 15 (8), 28-31
Exploring key markets: aerospace coatings and high performance pigments Figures compiled by Chemark Consulting showed that the aerospace coatings market was worth roughly $140 M in 2008. The commercial aircraft segment dominated the market with a 73.5% market share, followed by the military segment with a 22.5% share and the general aviation segment with a 5% share. Some of the major players in the aerospace coatings market are AkzoNobel, Deft and SherwinWilliams. The market for high performance pigments (HPPs) and special effects pigments, meanwhile, is starting to recover after being hit hard by the recent economic recession, deteriorating housing starts in the USA and the automobile crisis. Demand for HPPs is rising in emerging regions such as China, where there is growth in consumer goods manufacture and consumption. Data from Sinostar indicated that China’s coatings production and sales value climbed 3.6% and 3.2% year on year, respectively, to RMB Yuan 78.142 bn ($11.5 bn) and RMB Yuan 76.05 ($11.2 bn) in 1H 2009. Coatings World, Aug 2010, 15 (8), 6
Chemical earnings bounce back: 2Q 2010: companies make up ground lost during the recession The chemical industry is upbeat as financial results for 2Q 2010
C OAT I N G S start to come in. DuPont posted double-digit top-line growth for the quarter across all its business segments and regions. Earnings soared 92.1% to $1.1 bn from the year-ago level and were at par with pre-recession figures in 2Q 2008. Business was notably solid for the company’s electronics segment. Higher sales volumes mainly fuelled profit gains for the quarter. Meantime, demand recovery for electronics raw materials proved beneficial for industrial gas companies Air Products & Chemicals and Praxair. DuPont’s agriculture business recorded a 16% growth in sales on robust sales of seeds and its new Rynaxypyr insecticide. Fertilizer producer Mosaic reported a 166.4% increase in earnings, with a more than two-fold gain in profit margin on increased prices. Speciality chemicals maker Albemarle saw its earnings shoot up 113.2% year on year. Sales rose significantly in all three of the company’s businesses: catalysts, polymers, and fine chemicals. Paint and chemicals producer PPG Industries, meanwhile, maintains a positive business outlook even as demand continues to remain below prerecession levels. A table presents 2Q 2010 chemical results of select companies. Chemical and Engineering News, 2 Aug 2010, 88 (31), 13 (Website: http://www.cenonline.org)
Chemical merger and acquisition activity accelerates The global chemical market sees 2010 as a year of solid comeback for mergers and acquisitions (M&As) and expects more M&A activity in 2011. Young & Partners reports that in 1H 2010, $29 bn (€22 bn) worth of deals over $25 M in size were closed, compared with a total of $25 bn for the whole 2009 period. An uptrend was also observed in the number of these deals per quarter, with 32 deals finalized through 1H 2010 against 11 in 1H 2009. Notable deals include Honam OCTOBER 2010
FOCUS Petrochemical’s acquisition of a 72.2% stake in polyethylene maker Titan Chemicals for Malaysian Ringgit $2.94 bn ($910 M). The South Korean company plans to fully acquire Titan by Nov 2010, for an aggregate investment of $1.30 bn. In the area of specialities, Germany’s BASF purchased compatriot Cognis for €3.10 bn ($4 bn). US company Solutia made a €240 M ($314 M) outlay to acquire ethyl vinyl acetate solar encapsulants producer Etimex Solar, and another $73 M to take over Singaporean window films manufacturer Novomatrix. Eastman Chemical’s announcement in Jun 2010 that it is evaluating the divestment of its polyethylene terephthalate business may have triggered a ripple effect. Invista announced in Jul 2010 that it is pondering the sale of its polymer and resin assets in North America. Hexion Speciality Chemicals’ ink resins business has also been put up for sale. Similar deals and related activities in the chemicals market are further discussed. Two bar graphs present acquisitions of global chemical companies in 1999-1H 2010, based on equity value and on the number of deals. Another bar graph illustrates the financial buyer acquisitions of global chemical firms in 1999-1H 2010. ICIS Chemical Business, 16 Aug 2010, (Website: http://icischemicalbusiness.com)
BASF experts at Husum WindEnergy 2010 For the first time, BASF is to showcase its current portfolio for manufacturers of wind energy plants at the Husum WindEnergy trade show. Rotor blades need to be extremely sturdy and weatherresistant to endure 20 years of operation. BASF provides 2component epoxy resin and hardener systems that offer highly beneficial properties under its Baxxodur brand. These systems can speed up rotor blade OCTOBER 2010
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manufacturing processes by up to 30%. BASF also offers polyurethane foams, additives for PVC foams and polyurethanebased adhesives for enhanced rotor blade stability. Suitable coatings make rotor blades more resistant to environmental exposure. BASF offers RELIUS Processcoat, a groundcoat applied as a particularly thin film. Oldodur Blade Finish HS is a high-class, environmentally friendly finish that offers significantly enhanced resistance to any type of erosion. BASF offers special grouting materials for any kind of foundation. These products guarantee high long-term tower and foundation stability even in conditions of severe vibration caused by rotor blades and extreme weathering. In offshore plants in particular, the new MASTERFLOW 9500 type of speciality mortar offers benefits in terms of extremely high fatigue life and outstanding resistance to wind, weathering and the multitude of load changes that occur. Press release from: BASF SE, D-67056 Ludwigshafen, Germany, tel: +49 (0) 621 600, website: http://www.basf.com (24 Aug 2010)
Chemrez revenues surge 27% to Philippine Peso 3 bn in 1H 2010 Chemrez Technologies Inc (the Philippines’ top biodiesel, resins and oleochemicals producer) said a huge improvement in its exports drove revenues up 27% in 1H 2010 to Philippine Peso 3 bn (compared with Philippine Peso 2.4 bn in 1H 2009).The company said improved economic activities during the period also boosted its consolidated sales. The green technology producer said sales volume was up compared to 1H 2009, a sign that the economy is starting to recover from the global financial crisis. 50% of the revenue increase was attributed to higher exports which grew 15%, driven by the high demand for amides and esters used in the detergent, soap and cosmetic sectors in
C OAT I N G S overseas markets. On the other hand, the firm’s various resin products registered mixed volume results. Its revenue mix consists of 57% oleochemicals (with biodiesel remaining the main revenue driver); 39% resins; and 4% powder coatings. ChemrezTech said it has been able to maintain a leading market share in these industries. Based on unaudited financial results, cost of goods sold as a percentage of sales for 1H 2010 inched up 4% on higher raw materials costs. Higher cost of sales resulted in lower gross profit margin of 13% (down from 17%); selling and marketing expenses increased 12% from Philippine Peso 42.4 M in 2009 to Philippine Peso 47.7 M in 1H 2010 due mostly to the significant increase in delivery expenses which, in turn, resulted from the increase in sales volume; administrative expenses also increased 12% from Philippine Peso 37.9 M in 2009 to Philippine Peso 42.5 M in 2010, also directly attributed to the increase in sales; and tax expense increased as a result of the growing sales from segments which do not enjoy tax incentives. Because of the significantly higher raw material costs and higher tax expense, unaudited net profit decreased 15% to Philippine Peso 262.9 M in 1H 2010 from the Philippine Peso 308.5 M registered in 1H 2009. As a result, net profit margin decreased to 9% (down from 13%). Share earnings for the period decreased to Philippine Peso 0.20/share (compared with Philippine Peso 0.23/share for 1H 2009). This notwithstanding, ChemrezTech is optimistic it will continue to dominate the industries it operates in. ChemrezTech said the company maintains a strong position in the supply of resins for coatings, plastics, and construction and that its powder coating business is looking to increase further its market share by introducing new products and increasing promotions on unique product 7
MARKETS Aerospace coatings market beginning to recover The US aerospace coatings market continues to be affected by tough economic conditions, but the market is now starting to pick up on the back of rising demand for chrome-free coatings and a flourishing military aviation segment. Figures from Chemark Consulting showed that the US aerospace coatings market was worth roughly $140 M in 2008. The commercial aircraft segment dominated the market with a 73.5% of market share, followed by the military segment with 22.5% and general aviation with 5%. Demand for both original equipment (OE) and maintenance coatings in the commercial and general aviation segments remains weak because of continued economic pressure. The military segment, in contrast, is experiencing robust growth as a result of higher defence spending. The aerospace coatings market is also being driven forward by demand for greener products that can reduce total costs by cutting cycle times, and enhancing performance and durability. Leading the qualification of chrome-free primers and the search for an alternative to chrome pretreatment is the military segment. Deft’s zerochrome system, including pretreatment and primer, is being tested for the US Airforces’ F-15 and the Norwegian Air Force’s F-16. Like Deft, AkzoNobel is also working to make all its 6
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products chrome-free. The company recently introduced the Aerowave range of waterborne structural coatings, which includes a corrosion inhibiting primer, topcoat and composite primer. All products in the Aerowave series are approved by Airbus and contain VOC of below 250 grams/litre. Sherwin-Williams Aerospace Coatings also launched a full line of chromefree primers without lead hazards. Coatings World, Aug 2010, 15 (8), 28-31
Exploring key markets: aerospace coatings and high performance pigments Figures compiled by Chemark Consulting showed that the aerospace coatings market was worth roughly $140 M in 2008. The commercial aircraft segment dominated the market with a 73.5% market share, followed by the military segment with a 22.5% share and the general aviation segment with a 5% share. Some of the major players in the aerospace coatings market are AkzoNobel, Deft and SherwinWilliams. The market for high performance pigments (HPPs) and special effects pigments, meanwhile, is starting to recover after being hit hard by the recent economic recession, deteriorating housing starts in the USA and the automobile crisis. Demand for HPPs is rising in emerging regions such as China, where there is growth in consumer goods manufacture and consumption. Data from Sinostar indicated that China’s coatings production and sales value climbed 3.6% and 3.2% year on year, respectively, to RMB Yuan 78.142 bn ($11.5 bn) and RMB Yuan 76.05 ($11.2 bn) in 1H 2009. Coatings World, Aug 2010, 15 (8), 6
Chemical earnings bounce back: 2Q 2010: companies make up ground lost during the recession The chemical industry is upbeat as financial results for 2Q 2010
C OAT I N G S start to come in. DuPont posted double-digit top-line growth for the quarter across all its business segments and regions. Earnings soared 92.1% to $1.1 bn from the year-ago level and were at par with pre-recession figures in 2Q 2008. Business was notably solid for the company’s electronics segment. Higher sales volumes mainly fuelled profit gains for the quarter. Meantime, demand recovery for electronics raw materials proved beneficial for industrial gas companies Air Products & Chemicals and Praxair. DuPont’s agriculture business recorded a 16% growth in sales on robust sales of seeds and its new Rynaxypyr insecticide. Fertilizer producer Mosaic reported a 166.4% increase in earnings, with a more than two-fold gain in profit margin on increased prices. Speciality chemicals maker Albemarle saw its earnings shoot up 113.2% year on year. Sales rose significantly in all three of the company’s businesses: catalysts, polymers, and fine chemicals. Paint and chemicals producer PPG Industries, meanwhile, maintains a positive business outlook even as demand continues to remain below prerecession levels. A table presents 2Q 2010 chemical results of select companies. Chemical and Engineering News, 2 Aug 2010, 88 (31), 13 (Website: http://www.cenonline.org)
Chemical merger and acquisition activity accelerates The global chemical market sees 2010 as a year of solid comeback for mergers and acquisitions (M&As) and expects more M&A activity in 2011. Young & Partners reports that in 1H 2010, $29 bn (€22 bn) worth of deals over $25 M in size were closed, compared with a total of $25 bn for the whole 2009 period. An uptrend was also observed in the number of these deals per quarter, with 32 deals finalized through 1H 2010 against 11 in 1H 2009. Notable deals include Honam OCTOBER 2010
FOCUS Petrochemical’s acquisition of a 72.2% stake in polyethylene maker Titan Chemicals for Malaysian Ringgit $2.94 bn ($910 M). The South Korean company plans to fully acquire Titan by Nov 2010, for an aggregate investment of $1.30 bn. In the area of specialities, Germany’s BASF purchased compatriot Cognis for €3.10 bn ($4 bn). US company Solutia made a €240 M ($314 M) outlay to acquire ethyl vinyl acetate solar encapsulants producer Etimex Solar, and another $73 M to take over Singaporean window films manufacturer Novomatrix. Eastman Chemical’s announcement in Jun 2010 that it is evaluating the divestment of its polyethylene terephthalate business may have triggered a ripple effect. Invista announced in Jul 2010 that it is pondering the sale of its polymer and resin assets in North America. Hexion Speciality Chemicals’ ink resins business has also been put up for sale. Similar deals and related activities in the chemicals market are further discussed. Two bar graphs present acquisitions of global chemical companies in 1999-1H 2010, based on equity value and on the number of deals. Another bar graph illustrates the financial buyer acquisitions of global chemical firms in 1999-1H 2010. ICIS Chemical Business, 16 Aug 2010, (Website: http://icischemicalbusiness.com)
BASF experts at Husum WindEnergy 2010 For the first time, BASF is to showcase its current portfolio for manufacturers of wind energy plants at the Husum WindEnergy trade show. Rotor blades need to be extremely sturdy and weatherresistant to endure 20 years of operation. BASF provides 2component epoxy resin and hardener systems that offer highly beneficial properties under its Baxxodur brand. These systems can speed up rotor blade OCTOBER 2010
ON
POWDER
manufacturing processes by up to 30%. BASF also offers polyurethane foams, additives for PVC foams and polyurethanebased adhesives for enhanced rotor blade stability. Suitable coatings make rotor blades more resistant to environmental exposure. BASF offers RELIUS Processcoat, a groundcoat applied as a particularly thin film. Oldodur Blade Finish HS is a high-class, environmentally friendly finish that offers significantly enhanced resistance to any type of erosion. BASF offers special grouting materials for any kind of foundation. These products guarantee high long-term tower and foundation stability even in conditions of severe vibration caused by rotor blades and extreme weathering. In offshore plants in particular, the new MASTERFLOW 9500 type of speciality mortar offers benefits in terms of extremely high fatigue life and outstanding resistance to wind, weathering and the multitude of load changes that occur. Press release from: BASF SE, D-67056 Ludwigshafen, Germany, tel: +49 (0) 621 600, website: http://www.basf.com (24 Aug 2010)
Chemrez revenues surge 27% to Philippine Peso 3 bn in 1H 2010 Chemrez Technologies Inc (the Philippines’ top biodiesel, resins and oleochemicals producer) said a huge improvement in its exports drove revenues up 27% in 1H 2010 to Philippine Peso 3 bn (compared with Philippine Peso 2.4 bn in 1H 2009).The company said improved economic activities during the period also boosted its consolidated sales. The green technology producer said sales volume was up compared to 1H 2009, a sign that the economy is starting to recover from the global financial crisis. 50% of the revenue increase was attributed to higher exports which grew 15%, driven by the high demand for amides and esters used in the detergent, soap and cosmetic sectors in
C OAT I N G S overseas markets. On the other hand, the firm’s various resin products registered mixed volume results. Its revenue mix consists of 57% oleochemicals (with biodiesel remaining the main revenue driver); 39% resins; and 4% powder coatings. ChemrezTech said it has been able to maintain a leading market share in these industries. Based on unaudited financial results, cost of goods sold as a percentage of sales for 1H 2010 inched up 4% on higher raw materials costs. Higher cost of sales resulted in lower gross profit margin of 13% (down from 17%); selling and marketing expenses increased 12% from Philippine Peso 42.4 M in 2009 to Philippine Peso 47.7 M in 1H 2010 due mostly to the significant increase in delivery expenses which, in turn, resulted from the increase in sales volume; administrative expenses also increased 12% from Philippine Peso 37.9 M in 2009 to Philippine Peso 42.5 M in 2010, also directly attributed to the increase in sales; and tax expense increased as a result of the growing sales from segments which do not enjoy tax incentives. Because of the significantly higher raw material costs and higher tax expense, unaudited net profit decreased 15% to Philippine Peso 262.9 M in 1H 2010 from the Philippine Peso 308.5 M registered in 1H 2009. As a result, net profit margin decreased to 9% (down from 13%). Share earnings for the period decreased to Philippine Peso 0.20/share (compared with Philippine Peso 0.23/share for 1H 2009). This notwithstanding, ChemrezTech is optimistic it will continue to dominate the industries it operates in. ChemrezTech said the company maintains a strong position in the supply of resins for coatings, plastics, and construction and that its powder coating business is looking to increase further its market share by introducing new products and increasing promotions on unique product 7