- Email: [email protected]
Ciba makes continued progress over nine months
FINANCIALS
In other company news, Evonik Industries has acquired the remaining 50% in its former carbon black joint venture with ECI (Engineered Carbons, Inc). Degussa Engineered Carbons (DEC) will now be a 100% owned subsidiary of Evonik. Financial details of the transaction have not been disclosed. Evonik and ECI formed the joint venture in 2002 to combine their carbon black businesses in North America [ADPO, December 2001]. DEC, part of Evonik’s Advanced Fillers & Pigments business unit, is headquartered in Parsippany, NJ, USA, and produces and markets furnace grade carbon blacks for the rubber and pigment industries in North America and thermal blacks worldwide. According to Evonik, the transaction underlines its commitment to the North American market and will add significant value to the group. Carbon black is a strategic growth areas for Evonik, and one that the company is ‘systematically expanding’, according to company spokesman Dr Klaus Engel. The acquisition is an ‘important step’ in consolidating the company’s position in a key strategic market, Evonik says.
losses are the result of a combination of factors, including a long-term decline in sales prices, persistent increases in production costs and the overcapacity of TiO2 in the world market, MIC says. It is anticipated that losses would continue into the future, and the company has therefore decided to begin the prescribed preliminary processes with a view to closure. MIC says it is committed to assist all employees during this difficult period with support from local management and external consultants. Last summer [ADPO, July 2007], MIC became a wholly-owned subsidiary of Saudi Arabia’s National Titanium Dioxide Co Ltd, otherwise known as Cristal.
Contact: Evonik Industries AG, Rellinghauser Straße 1–11, 45128 Essen, Germany. Tel: +49 201 177-3333, Web: www.evonik.com
Ciba makes continued progress over nine months
Millennium plans closure of French TiO2 plant
T
itanium dioxide producer Millennium Inorganic Chemicals (MIC) has announced plans to close its MIC Le Havre SAS pigment plant in France. The company has started an information and consultation process with employee representatives regarding the proposed closure of the site, which currently employs 287 permanent staff.
MIC purchased the Le Havre site in 1997 and, despite accumulated investment of 91 million, is recording substantial financial losses at the site, cumulatively 157 million. At the end of 2003, the business was declared an impaired asset by the external auditors. Despite the considerable efforts of management and employees, results have continued to deteriorate. In 2006 the losses totalled 35 million and a similar result was expected in 2007. These
8
Additives for Polymers
Contact: Millennium Inorganic Chemicals, Hunt Valley, MD, USA. Tel: +1 410 229 4400, Web: www.millenniumchem.com
FINANCIALS
S
witzerland’s Ciba Inc posted sales of CHF4.946 billion (2.99 billion) for the first nine months of 2007, up 3% in Swiss francs and 2% in local currencies from the same period in 2006. Operating income for the period before restructuring was up 2% at CHF423 million, despite a substantial increase of about 2.5% in raw material costs. However, net income from continuing operations was impacted by an exceptional noncash tax charge of CHF15 million which, together with restructuring charges, reduced the figure to CHF161 million compared with CHF178 million for the first nine months in 2006. Excluding those charges, income from continuing operations was up 14% from 2006 levels to CHF240 million.
Sales in Asia remained strong, with a 6% increase in local currencies overall and double-digit growth in China. NAFTA was weaker in the nine months as a result of the slow automotive and construction industries, but Ciba says regional sales improved considerably in the third quarter. Central and South America showed substantial growth. Overall, the Americas were relatively
January 2008
FINANCIALS
flat – less than 1% lower in local currencies. Nine month sales for Europe were mixed, with good growth in Germany and Eastern Europe. European sales overall increased by 1% in local currencies. There was a positive currency impact of 1% in the nine-month period, with a stronger euro and pound offsetting the weaker dollar. Sales prices, including newly launched products, were 2% higher. The new products included effect pigments and new generations of light stabilizers and flame retardants, which made significant new product contributions, the company reports. Sales volumes were 3% higher. Overall, margin development is being affected by exceptionally high raw material costs and, while action is being taken with firm cost management and sales price increases, there is always a time lag before the increased costs can be recouped, Ciba says. The company continues to withdraw from low-margin product ranges in order to further strengthen margins. For the third quarter, sales increased 4% in Swiss francs and 3% in local currencies to CHF1.638 billion. Operating income before restructuring was CHF150 million compared to CHF154 million in 3Q 2006. Raw material costs eased slightly in the third quarter. Income from continuing operations before restructuring and the one-off tax charge was CHF85 million in 3Q 2007 (CHF93 million in 3Q 2006). Savings from the Operational Agenda programme [ADPO, June 2006] came in as expected, Ciba reports, incurring restructuring charges of CHF28 million in the third quarter and CHF93 million for the year to date. For the full year, the company expects to incur around CHF100 million of restructuring charges relating to the costreduction programme and achieve CHF60–70 million in savings. Nine-month sales for Ciba’s plastic additives segment were 2% higher in Swiss francs at CHF1.623 billion, with strong growth coming from the lubricant additives and personal care businesses. The company says that its polymer businesses also performed well – in line with 2006 – with the discontinuation of the Atmer product range in 2Q 2007 being offset by an acceleration in demand for polymer stabilizers. Operating income before restructuring increased 5% over the period to CHF243 million, with efficiency initiatives delivering good improvements and an increase in the proportion of contribution from newer products. Ciba reports that its new antioxidant plant in Singapore is on track to begin production in March 2008.
January 2008
• Thomas Engelhardt, currently the global head of Ciba’s process & lubricant additives business line and responsible for plastic additives in NAFTA, has been appointed head of the coating effects segment from January. He succeeds Hermann Angerer, who is retiring. Engelhardt will also become a member of Ciba’s group executive committee. Contact: Ciba Inc, Basel, Switzerland. Tel: +41 61 636 4444, Web: www.cibasc.com
Clariant reports further sales growth
C
lariant International of Muttenz, Switzerland, reported a rise in sales for the first nine months of 2007 to CHF6.447 billion (3.90 billion) from CHF6.090 billion a year earlier. This represents growth of 4% in local currencies and 6% in Swiss francs. Operating income before exceptional items declined to CHF417 million from CHF458 million for the period, while net income from continuing operations rose to CHF129 million in 2007 from CHF108 million in the first nine months of 2006. Operating cash flow almost doubled compared to the first nine months of 2006 to reach CHF320 million.
Gross profits were impacted by a 4% raw material cost increase, higher energy costs and unfavourable currency exchange effects, which were only partially offset by a 1% price increase and a decrease in SG&A expenses. The company reported good demand for its products in general, with ‘retreating momentum’ in the third quarter and a differentiated development across businesses. The regional sales split also showed a mixed picture. Europe remained stable, whereas Asia overall showed good growth with some slowdown in the third quarter, particularly in China and India. Sales in the USA were more resilient. Price increase initiatives across all divisions have started bearing fruit, though these efforts had some negative impact on volumes and, apart from in the Masterbatches Division, were insufficient to offset rising raw material and energy costs, Clariant reports.
Additives for Polymers
9
In other company news, Evonik Industries has acquired the remaining 50% in its former carbon black joint venture with ECI (Engineered Carbons, Inc). Degussa Engineered Carbons (DEC) will now be a 100% owned subsidiary of Evonik. Financial details of the transaction have not been disclosed. Evonik and ECI formed the joint venture in 2002 to combine their carbon black businesses in North America [ADPO, December 2001]. DEC, part of Evonik’s Advanced Fillers & Pigments business unit, is headquartered in Parsippany, NJ, USA, and produces and markets furnace grade carbon blacks for the rubber and pigment industries in North America and thermal blacks worldwide. According to Evonik, the transaction underlines its commitment to the North American market and will add significant value to the group. Carbon black is a strategic growth areas for Evonik, and one that the company is ‘systematically expanding’, according to company spokesman Dr Klaus Engel. The acquisition is an ‘important step’ in consolidating the company’s position in a key strategic market, Evonik says.
losses are the result of a combination of factors, including a long-term decline in sales prices, persistent increases in production costs and the overcapacity of TiO2 in the world market, MIC says. It is anticipated that losses would continue into the future, and the company has therefore decided to begin the prescribed preliminary processes with a view to closure. MIC says it is committed to assist all employees during this difficult period with support from local management and external consultants. Last summer [ADPO, July 2007], MIC became a wholly-owned subsidiary of Saudi Arabia’s National Titanium Dioxide Co Ltd, otherwise known as Cristal.
Contact: Evonik Industries AG, Rellinghauser Straße 1–11, 45128 Essen, Germany. Tel: +49 201 177-3333, Web: www.evonik.com
Ciba makes continued progress over nine months
Millennium plans closure of French TiO2 plant
T
itanium dioxide producer Millennium Inorganic Chemicals (MIC) has announced plans to close its MIC Le Havre SAS pigment plant in France. The company has started an information and consultation process with employee representatives regarding the proposed closure of the site, which currently employs 287 permanent staff.
MIC purchased the Le Havre site in 1997 and, despite accumulated investment of 91 million, is recording substantial financial losses at the site, cumulatively 157 million. At the end of 2003, the business was declared an impaired asset by the external auditors. Despite the considerable efforts of management and employees, results have continued to deteriorate. In 2006 the losses totalled 35 million and a similar result was expected in 2007. These
8
Additives for Polymers
Contact: Millennium Inorganic Chemicals, Hunt Valley, MD, USA. Tel: +1 410 229 4400, Web: www.millenniumchem.com
FINANCIALS
S
witzerland’s Ciba Inc posted sales of CHF4.946 billion (2.99 billion) for the first nine months of 2007, up 3% in Swiss francs and 2% in local currencies from the same period in 2006. Operating income for the period before restructuring was up 2% at CHF423 million, despite a substantial increase of about 2.5% in raw material costs. However, net income from continuing operations was impacted by an exceptional noncash tax charge of CHF15 million which, together with restructuring charges, reduced the figure to CHF161 million compared with CHF178 million for the first nine months in 2006. Excluding those charges, income from continuing operations was up 14% from 2006 levels to CHF240 million.
Sales in Asia remained strong, with a 6% increase in local currencies overall and double-digit growth in China. NAFTA was weaker in the nine months as a result of the slow automotive and construction industries, but Ciba says regional sales improved considerably in the third quarter. Central and South America showed substantial growth. Overall, the Americas were relatively
January 2008
FINANCIALS
flat – less than 1% lower in local currencies. Nine month sales for Europe were mixed, with good growth in Germany and Eastern Europe. European sales overall increased by 1% in local currencies. There was a positive currency impact of 1% in the nine-month period, with a stronger euro and pound offsetting the weaker dollar. Sales prices, including newly launched products, were 2% higher. The new products included effect pigments and new generations of light stabilizers and flame retardants, which made significant new product contributions, the company reports. Sales volumes were 3% higher. Overall, margin development is being affected by exceptionally high raw material costs and, while action is being taken with firm cost management and sales price increases, there is always a time lag before the increased costs can be recouped, Ciba says. The company continues to withdraw from low-margin product ranges in order to further strengthen margins. For the third quarter, sales increased 4% in Swiss francs and 3% in local currencies to CHF1.638 billion. Operating income before restructuring was CHF150 million compared to CHF154 million in 3Q 2006. Raw material costs eased slightly in the third quarter. Income from continuing operations before restructuring and the one-off tax charge was CHF85 million in 3Q 2007 (CHF93 million in 3Q 2006). Savings from the Operational Agenda programme [ADPO, June 2006] came in as expected, Ciba reports, incurring restructuring charges of CHF28 million in the third quarter and CHF93 million for the year to date. For the full year, the company expects to incur around CHF100 million of restructuring charges relating to the costreduction programme and achieve CHF60–70 million in savings. Nine-month sales for Ciba’s plastic additives segment were 2% higher in Swiss francs at CHF1.623 billion, with strong growth coming from the lubricant additives and personal care businesses. The company says that its polymer businesses also performed well – in line with 2006 – with the discontinuation of the Atmer product range in 2Q 2007 being offset by an acceleration in demand for polymer stabilizers. Operating income before restructuring increased 5% over the period to CHF243 million, with efficiency initiatives delivering good improvements and an increase in the proportion of contribution from newer products. Ciba reports that its new antioxidant plant in Singapore is on track to begin production in March 2008.
January 2008
• Thomas Engelhardt, currently the global head of Ciba’s process & lubricant additives business line and responsible for plastic additives in NAFTA, has been appointed head of the coating effects segment from January. He succeeds Hermann Angerer, who is retiring. Engelhardt will also become a member of Ciba’s group executive committee. Contact: Ciba Inc, Basel, Switzerland. Tel: +41 61 636 4444, Web: www.cibasc.com
Clariant reports further sales growth
C
lariant International of Muttenz, Switzerland, reported a rise in sales for the first nine months of 2007 to CHF6.447 billion (3.90 billion) from CHF6.090 billion a year earlier. This represents growth of 4% in local currencies and 6% in Swiss francs. Operating income before exceptional items declined to CHF417 million from CHF458 million for the period, while net income from continuing operations rose to CHF129 million in 2007 from CHF108 million in the first nine months of 2006. Operating cash flow almost doubled compared to the first nine months of 2006 to reach CHF320 million.
Gross profits were impacted by a 4% raw material cost increase, higher energy costs and unfavourable currency exchange effects, which were only partially offset by a 1% price increase and a decrease in SG&A expenses. The company reported good demand for its products in general, with ‘retreating momentum’ in the third quarter and a differentiated development across businesses. The regional sales split also showed a mixed picture. Europe remained stable, whereas Asia overall showed good growth with some slowdown in the third quarter, particularly in China and India. Sales in the USA were more resilient. Price increase initiatives across all divisions have started bearing fruit, though these efforts had some negative impact on volumes and, apart from in the Masterbatches Division, were insufficient to offset rising raw material and energy costs, Clariant reports.
Additives for Polymers
9