- Email: [email protected]
Ciba Specialty Chemicals resists challenging first half
Additives for Polymers
November 2003
Degussa currently employs more than 1000 people in China, with production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. In 2002, the group generated sales of about 240 million in China.
which has headquarters in Straelen, Germany. PPM companies have approximately 280 employees globally and produce masterbatches and compounds for different individual applications.
Contact: Degussa AG, Karl-Arnold-Platz 1a, D40474 Düsseldorf, Germany; tel: +49-21165041-0; fax: +49-211-65041-555; URL: www.degussa-fp.com
Contact: Alex Rom-Roginski, Colortech, Inc, 5712 Commerce Blvd, Morristown, TN 37814, USA; tel: +1-423-318-8526; e-mail: [email protected]; URL: www.colortech.com Eastman Chemical Company, 100 North Eastman Road, PO Box 511, Kingsport, TN 37662-5075, USA; tel: +1-423-229-2000; URL: www.eastman.com
Colortech buys Eastman’s polyethylene colour masterbatch business Colortech, Inc has purchased Eastman Chemical Co’s polyethylene colour masterbatch (concentrates) business. Terms of the sale, which was effective 1 October 2003, were not disclosed. Major end-use markets for polyethylene colour concentrates are flexible packaging and consumer goods such as plastic bags and containers. Eastman has manufactured polyethylene colour masterbatches at its Kingsport plant for many years but the business, a niche market as far as the company is concerned, no longer met its profit margin expectations. Colortech’s business, however, focuses on this particular market, producing polyolefin-based masterbatches at compounding plants in Morristown, TN, USA, and Brampton, Ontario, Canada. Commenting on the purchase, Alex Rom-Roginski, president of Colortech, says, “We have enjoyed a long relationship with Eastman, and we look forward to the opportunity of serving their customers with the same level of quality and service that we provide to our current customers”. Colortech offers a broad range of polymer masterbatches to meet high-performance polyolefin applications, including blown film, geomembrane, extrusion coating, injection moulding, blow moulding, sheet and profile extrusion, and synthetic fibres. It provides more than 1000 standard colours backed up by extensive colour matching and formulation services to its customers. Colortech also offers a full line of standard and custom formulations containing antioxidants, UV stabilizers, process stabilizers, process aids, photodegradants, antistats, slips and antiblocks. Since 1996, it has been a subsidiary of Polyplast Müller GmbH (PPM),
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FINANCIALS Ciba Specialty Chemicals resists challenging first half Ciba Specialty Chemicals increased sales, operating income and EBITDA during the first half of 2003 in local currencies, each by 2%, compared to the same period last year. Four of its five business segments equalled or increased sales in local currencies compared to the first half of 2002. On average, volumes were up 5%, offset by a 3% fall in prices. These results were achieved despite the expected continued adverse environment in global markets. Both the Swiss franc and the Euro strengthened considerably against most major trading currencies during the first half, particularly against the weakening US dollar. This led to lower first half results in Swiss francs for sales (CHF3.379 billion, c. 2.18 billion, down 8% from CHF3.68 billion), operating income (CHF327 million, 23%) and EBITDA (CHF507 million, -19%). Net income reached CHF193 million compared to CHF224 million for the first six months last year. The results for the first half of 2002 were particularly high. Geographically, first half sales in Asia-Pacific rose by 6% in local currencies (-5% in Swiss francs) with particular strength seen in China and Japan; in Europe, sales were 1% higher (+1% in Swiss francs); and in the Americas, sales were 1% lower (-20% in Swiss francs). Compared to the second quarter of 2002, sales
November 2003
were 9% lower in Swiss francs, but they were up 1% from the first quarter in Asia and Europe. Despite successful cost-cutting programmes and further productivity improvements, profits in the first half of 2003 were adversely affected by increases in raw material prices in certain segments, unfavourable currency exchange rates and pressure on sales prices. Raw material price increases were seen primarily in the Plastic Additives and Water & Paper Treatment business segments. The company’s selling, general and administrative expenses were reduced by 8% in Swiss francs in the first half. The company introduced temporary plant shutdowns when customer destocking trends in some US and UK markets became visible towards the end of the second quarter, thus countering inventory build-ups. Ciba is focusing on initiatives that strengthen its future positioning, accelerating the implementation of growth projects as well as investing in an increased presence in the Middle East, Eastern Europe and Asia. Additionally, annual funding for the Research Fund is being increased by 50% to CHF15 million and a new Expert Services business unit will be established. The Plastic Additives business segment, together with Water & Paper Treatment, enjoyed reasonable volume growth in the first six months of 2003. Price erosion was heaviest among the semi-speciality product ranges, while the speciality product ranges fared more favourably, Ciba reports. Both segments announced selected price increases in May, which are beginning to show a positive influence. Looking ahead, the company says that a variety of factors are currently making it difficult to predict short-term economic trends. Market conditions and customer order patterns remain very volatile and macroeconomic trends are unclear. There are still no clear signals of an economic recovery in the second half of 2003, which had been a key assumption of past forecasts. Ciba nonetheless continues to expect local currency sales above last year’s level for the full year 2003. Contact: Ciba Specialty Chemicals, Klybeckstrasse 141, CH-4002 Basel, Switzerland; tel: +41-61-636-4444; fax: +4161-636-3019; URL: www.cibasc.com
Additives for Polymers
Millennium Chemicals posts second quarter loss, updates outlook… In the second quarter of 2003, Millennium Chemical reported a net loss of US$9 million compared to net income of $2 million in the second quarter last year. Sales from majorityowned businesses were $416 million in second quarter 2003 compared to $405 million in the second quarter of 2002. The titanium dioxide (TiO2) segment, the company’s largest business, performed well in the second quarter, reporting operating income of $23 million, compared to $15 million in the second quarter of 2002 and $21 million in the first quarter of 2003. In local currencies, average second quarter prices increased 7% from the second quarter of 2002 and were comparable to the first quarter of 2003. In US dollar terms, the second quarter worldwide average selling prices increased 15% from the second quarter of 2002 and increased 2% from the first quarter of 2003. The 2Q TiO2 sales volume of 145 000 tonnes represented a decrease of 15% from the second quarter of 2002 and was equal to the first quarter of 2003. The sales volume showed a downward trend each month during the quarter and was lower than expected due to the weak global economy and adverse weather, primarily in North America. The TiO2 operating rate for the three months was 96% of annual nameplate capacity of 690 000 tonnes compared to 89% and 88%, respectively, for 2Q 2002 and 1Q 2003. In a recent update on its earnings outlook, Millennium announced that its earnings for the third quarter of 2003 are expected to be significantly lower than the second quarter results. For the TiO2 business, operating income in the third quarter is now expected to be in the range of $6 to $9 million, compared to $23 million in the second quarter of 2003. The earnings decline is due in part to expected higher manufacturing costs per tonne due to planned slowdowns, because of a softer demand outlook, and unscheduled operating disruptions. The average global selling price is expected to be down about 3% in US dollars in the third quarter of 2003 compared to the second quarter, reflecting mix, local competitive pricing issues and the strengthening US dollar. Global
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November 2003
Degussa currently employs more than 1000 people in China, with production facilities in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Hong Kong. In 2002, the group generated sales of about 240 million in China.
which has headquarters in Straelen, Germany. PPM companies have approximately 280 employees globally and produce masterbatches and compounds for different individual applications.
Contact: Degussa AG, Karl-Arnold-Platz 1a, D40474 Düsseldorf, Germany; tel: +49-21165041-0; fax: +49-211-65041-555; URL: www.degussa-fp.com
Contact: Alex Rom-Roginski, Colortech, Inc, 5712 Commerce Blvd, Morristown, TN 37814, USA; tel: +1-423-318-8526; e-mail: [email protected]; URL: www.colortech.com Eastman Chemical Company, 100 North Eastman Road, PO Box 511, Kingsport, TN 37662-5075, USA; tel: +1-423-229-2000; URL: www.eastman.com
Colortech buys Eastman’s polyethylene colour masterbatch business Colortech, Inc has purchased Eastman Chemical Co’s polyethylene colour masterbatch (concentrates) business. Terms of the sale, which was effective 1 October 2003, were not disclosed. Major end-use markets for polyethylene colour concentrates are flexible packaging and consumer goods such as plastic bags and containers. Eastman has manufactured polyethylene colour masterbatches at its Kingsport plant for many years but the business, a niche market as far as the company is concerned, no longer met its profit margin expectations. Colortech’s business, however, focuses on this particular market, producing polyolefin-based masterbatches at compounding plants in Morristown, TN, USA, and Brampton, Ontario, Canada. Commenting on the purchase, Alex Rom-Roginski, president of Colortech, says, “We have enjoyed a long relationship with Eastman, and we look forward to the opportunity of serving their customers with the same level of quality and service that we provide to our current customers”. Colortech offers a broad range of polymer masterbatches to meet high-performance polyolefin applications, including blown film, geomembrane, extrusion coating, injection moulding, blow moulding, sheet and profile extrusion, and synthetic fibres. It provides more than 1000 standard colours backed up by extensive colour matching and formulation services to its customers. Colortech also offers a full line of standard and custom formulations containing antioxidants, UV stabilizers, process stabilizers, process aids, photodegradants, antistats, slips and antiblocks. Since 1996, it has been a subsidiary of Polyplast Müller GmbH (PPM),
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FINANCIALS Ciba Specialty Chemicals resists challenging first half Ciba Specialty Chemicals increased sales, operating income and EBITDA during the first half of 2003 in local currencies, each by 2%, compared to the same period last year. Four of its five business segments equalled or increased sales in local currencies compared to the first half of 2002. On average, volumes were up 5%, offset by a 3% fall in prices. These results were achieved despite the expected continued adverse environment in global markets. Both the Swiss franc and the Euro strengthened considerably against most major trading currencies during the first half, particularly against the weakening US dollar. This led to lower first half results in Swiss francs for sales (CHF3.379 billion, c. 2.18 billion, down 8% from CHF3.68 billion), operating income (CHF327 million, 23%) and EBITDA (CHF507 million, -19%). Net income reached CHF193 million compared to CHF224 million for the first six months last year. The results for the first half of 2002 were particularly high. Geographically, first half sales in Asia-Pacific rose by 6% in local currencies (-5% in Swiss francs) with particular strength seen in China and Japan; in Europe, sales were 1% higher (+1% in Swiss francs); and in the Americas, sales were 1% lower (-20% in Swiss francs). Compared to the second quarter of 2002, sales
November 2003
were 9% lower in Swiss francs, but they were up 1% from the first quarter in Asia and Europe. Despite successful cost-cutting programmes and further productivity improvements, profits in the first half of 2003 were adversely affected by increases in raw material prices in certain segments, unfavourable currency exchange rates and pressure on sales prices. Raw material price increases were seen primarily in the Plastic Additives and Water & Paper Treatment business segments. The company’s selling, general and administrative expenses were reduced by 8% in Swiss francs in the first half. The company introduced temporary plant shutdowns when customer destocking trends in some US and UK markets became visible towards the end of the second quarter, thus countering inventory build-ups. Ciba is focusing on initiatives that strengthen its future positioning, accelerating the implementation of growth projects as well as investing in an increased presence in the Middle East, Eastern Europe and Asia. Additionally, annual funding for the Research Fund is being increased by 50% to CHF15 million and a new Expert Services business unit will be established. The Plastic Additives business segment, together with Water & Paper Treatment, enjoyed reasonable volume growth in the first six months of 2003. Price erosion was heaviest among the semi-speciality product ranges, while the speciality product ranges fared more favourably, Ciba reports. Both segments announced selected price increases in May, which are beginning to show a positive influence. Looking ahead, the company says that a variety of factors are currently making it difficult to predict short-term economic trends. Market conditions and customer order patterns remain very volatile and macroeconomic trends are unclear. There are still no clear signals of an economic recovery in the second half of 2003, which had been a key assumption of past forecasts. Ciba nonetheless continues to expect local currency sales above last year’s level for the full year 2003. Contact: Ciba Specialty Chemicals, Klybeckstrasse 141, CH-4002 Basel, Switzerland; tel: +41-61-636-4444; fax: +4161-636-3019; URL: www.cibasc.com
Additives for Polymers
Millennium Chemicals posts second quarter loss, updates outlook… In the second quarter of 2003, Millennium Chemical reported a net loss of US$9 million compared to net income of $2 million in the second quarter last year. Sales from majorityowned businesses were $416 million in second quarter 2003 compared to $405 million in the second quarter of 2002. The titanium dioxide (TiO2) segment, the company’s largest business, performed well in the second quarter, reporting operating income of $23 million, compared to $15 million in the second quarter of 2002 and $21 million in the first quarter of 2003. In local currencies, average second quarter prices increased 7% from the second quarter of 2002 and were comparable to the first quarter of 2003. In US dollar terms, the second quarter worldwide average selling prices increased 15% from the second quarter of 2002 and increased 2% from the first quarter of 2003. The 2Q TiO2 sales volume of 145 000 tonnes represented a decrease of 15% from the second quarter of 2002 and was equal to the first quarter of 2003. The sales volume showed a downward trend each month during the quarter and was lower than expected due to the weak global economy and adverse weather, primarily in North America. The TiO2 operating rate for the three months was 96% of annual nameplate capacity of 690 000 tonnes compared to 89% and 88%, respectively, for 2Q 2002 and 1Q 2003. In a recent update on its earnings outlook, Millennium announced that its earnings for the third quarter of 2003 are expected to be significantly lower than the second quarter results. For the TiO2 business, operating income in the third quarter is now expected to be in the range of $6 to $9 million, compared to $23 million in the second quarter of 2003. The earnings decline is due in part to expected higher manufacturing costs per tonne due to planned slowdowns, because of a softer demand outlook, and unscheduled operating disruptions. The average global selling price is expected to be down about 3% in US dollars in the third quarter of 2003 compared to the second quarter, reflecting mix, local competitive pricing issues and the strengthening US dollar. Global
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