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Clariant achieves steady sales growth in 2007, reports restructuring progress
FINANCIALS
In Cytec’s Performance Chemicals segment, sales volume growth in the quarter was led by Mining Chemicals and Polymer Additives. Sales for the segment increased 9% to $192 million. Overall selling volumes increased by 5%, primarily due to higher mining volumes and the company’s focus on selling more value-added products in Polymer Additives. Selling prices increased by 1% and the impact of exchange rates increased sales by 3%. 4Q operating earnings of $16.2 million were up 8% compared to $11.6 million in the fourth quarter of 2006. The increase was due to improved volumes in Mining Chemicals, and to the increased earnings in the Polymer Additives product line resulting from the higher selling volumes and the favourable benefits of a restructuring initiative taken at the end of 2006 [ADPO, August 2006]. Looking ahead, Cytec expects volume growth to continue in 2008 for the Performance Chemicals segment, with the exception of Polymer Additives due to the recent discontinuation of some mature product lines. Raw material impact should be modest in this sector, and the company says it plans to offset any impact by applying price increases where needed. Full year guidance is for sales to increase in this segment by 4%, which should improve operating earnings by about 10% versus 2007, Cytec says. For the full year ended 31 December 2007, the company’s net earnings were $206.5 million, including special items, on sales of $3.504 billion. Full-year 2006 net earnings were $195.2 million on sales of $3.330 billion. Cytec says it made good progress in 2007 with its operational excellence programmes to improve earnings and in its efforts to create value-added technologies for customers. Contact: Cytec Industries Inc, West Paterson, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Clariant achieves steady sales growth in 2007, reports restructuring progress
F
or full year 2007, Clariant International Ltd, headquartered in Muttenz, Switzerland,
April 2008
posted net sales of CHF8.533 billion (c. 5.2 billion), up 5% in Swiss francs and 4% in local currencies from CHF8.10 billion in 2006. Although sales in the second half of the year were not as strong as in the first half, sales in the fourth quarter recovered after a slower third quarter, the company reports.
Clariant was able to raise its prices by an average of more than 1% in 2007. However, this action was not sufficient to offset a 5% rise in raw material costs, and the company’s gross margin consequently decreased to 29.2% from 30.7% in 2006. Unfavourable currency effects adversely impacted profitability by CHF68 million in 2007, resulting in an operating income before exceptionals of CHF539 million compared to CHF592 million in 2006, and an operating margin of 6.3% down from 7.3% in 2006. Net income (after exceptional items) increased to CHF5 million from a loss of CHF78 million in 2006, due to lower taxes and improved financial results. However, for continuing operations alone, 2007 net income was CHF108 million, down from CHF131 million the previous year. For 4Q 2007, Clariant reported a net loss from continuing operations of CHF21 million, compared to a net income of CHF23 million in 4Q 2006, despite a 3.8% increase in net sales to CHF2.086 billion. Although profitability was affected by higher raw material and energy costs as well as unfavourable currency movements, CEO Jan Secher says that the company ‘progressed in building momentum in operational performance’ and significantly improved cash flow in 2007. Looking ahead, pricing initiatives and ‘active portfolio re-shaping’ are expected to deliver improved profitability, he says. Clariant’s focus on cost reduction and restructuring initiatives [ADPO, January 2007] delivered results. Sales, general & administrative (SG&A) costs expressed as a percentage of sales improved to 20.8% in 2007 from 21.3% in 2006. Restructuring costs for the year reached CHF262 million with a reduction in headcount of some 800 in the past 12 months and the closure of nine smaller sites. The additional closure of three larger sites and a further 600 job cuts have been announced. In addition, more than 20% of the product portfolio has been pruned in order to reduce complexity, and has thus nearly reached the 2010 target of 25%. Due to strong demand in most areas of the business, sales in the Pigments & Additives Division
Additives for Polymers
9
EQUIPMENT
rose by 5% in local currency terms and Swiss Francs in 4Q 2007, to CHF490 million. Sales volumes grew across the board and initiatives aimed at increasing prices due to rising cost of raw materials continued to bear fruit. At the regional level, sales were up a little on the previous year in Europe, and slightly down in the USA. Once again, the division’s main growth markets in this quarter were Asia and Latin America. Despite this positive trend, however, profitability was down on the previous year, due mainly to the rising cost of raw materials and adverse developments on the currency front. The scheduled closure of a major US plant and substantial overhead cost reduction measures resulted in significantly higher restructuring costs during the quarter. The division reported an operating loss of CHF48 million compared to an income of CHF21 million for 4Q 2006. Demand for products in the plastics industry was on a par with the previous year. Within the polymer additives business, sales of antioxidants grew. For the year as a whole, divisional sales were up nearly 5% to CHF2.076 billion but operating income fell to CHF77 million from CHF211 million in 2006. Profitability was stronger in the Masterbatches Division, with annual operating income of CHF102 million and sales of CHF1.38 billion in 2007, compared with operating income of CHF112 million and sales of CHF1.254 billion in 2006. In the fourth quarter, operating income rose to CHF25 million from CHF19 million in 4Q 2006, while sales of CHF315 million were up 6% in local currencies and Swiss francs. Moderate growth in local currency terms was achieved in 4Q 2007 after adjusting for the effects of the acquisition of the Ciba masterbatches business combined with the divestiture in Australia. Weaker sales volumes as well as rising raw material and energy costs during the period were successfully offset by price rises despite strong resistance to price increases in the consumer and retail markets, Clariant says. Regional performance remained good overall with Latin America and Asia in particular continuing to show solid sales growth. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6969, Web: www.clariant.com
10
Additives for Polymers
EQUIPMENT Maguire loading device boosts additive feeder performance
U
S gravimetric blender specialist Maguire Products Inc reports that it has developed an advanced method of loading material into a gravimetric feeder. The loader/feeder combination is claimed to makes it possible to meter colorants or additives into a plastics processing machine with a degree of accuracy far exceeding that achieved with a volumetric feeder.
Even with the addition of an advanced loading system, Maguire® MGF feeders cost no more than comparable volumetric feeders, and a third or more less than competing gravimetric feeders, according to the company’s national sales manager Frank Kavanagh, and they provide the superior precision, consistency and data generation characteristic of gravimetric systems. The ‘enhanced accuracy’ of MGF Series gravimetric feeders enables moulders and extrusion processors to reduce colour and additive consumption, increase control over product quality, and document colour usage for each production run, adds Kavanagh. The feeders are available with throughput capacity of up to 16 kg (35 lbs) per hour and can be mounted directly to the throat of most moulding machines or extruders. Maguire says that the new loading device, a direct successor of the venturi loaders that it has manufactured for many years, transports material to the feeder from a gaylord, drum or other container. Rather than load continuously or intermittently, however, the loader rapidly and completely fills the feeder just once, on receiving a signal from the feeder controller that the level of colour or additive has fallen to precisely 10% of feeder hopper capacity. In this way the loss-inweight measuring function of the feeder, which is what makes a gravimetric system so accurate, continually tracks and adjusts for dosing errors without interference or distortion from the addition of new material. As a result, the feeder maintains dosage within tight tolerances from moulding shot to moulding shot and does so for hours as hopper material levels steadily decrease. The MGF feeders also benefit from vibration management software, which enables adjustment of colour metering to compensate for vibrations on fastcycling moulding presses, as well as a patent-pending
April 2008
In Cytec’s Performance Chemicals segment, sales volume growth in the quarter was led by Mining Chemicals and Polymer Additives. Sales for the segment increased 9% to $192 million. Overall selling volumes increased by 5%, primarily due to higher mining volumes and the company’s focus on selling more value-added products in Polymer Additives. Selling prices increased by 1% and the impact of exchange rates increased sales by 3%. 4Q operating earnings of $16.2 million were up 8% compared to $11.6 million in the fourth quarter of 2006. The increase was due to improved volumes in Mining Chemicals, and to the increased earnings in the Polymer Additives product line resulting from the higher selling volumes and the favourable benefits of a restructuring initiative taken at the end of 2006 [ADPO, August 2006]. Looking ahead, Cytec expects volume growth to continue in 2008 for the Performance Chemicals segment, with the exception of Polymer Additives due to the recent discontinuation of some mature product lines. Raw material impact should be modest in this sector, and the company says it plans to offset any impact by applying price increases where needed. Full year guidance is for sales to increase in this segment by 4%, which should improve operating earnings by about 10% versus 2007, Cytec says. For the full year ended 31 December 2007, the company’s net earnings were $206.5 million, including special items, on sales of $3.504 billion. Full-year 2006 net earnings were $195.2 million on sales of $3.330 billion. Cytec says it made good progress in 2007 with its operational excellence programmes to improve earnings and in its efforts to create value-added technologies for customers. Contact: Cytec Industries Inc, West Paterson, NJ, USA. Tel: +1 973 357 3100, Web: www.cytec.com
Clariant achieves steady sales growth in 2007, reports restructuring progress
F
or full year 2007, Clariant International Ltd, headquartered in Muttenz, Switzerland,
April 2008
posted net sales of CHF8.533 billion (c. 5.2 billion), up 5% in Swiss francs and 4% in local currencies from CHF8.10 billion in 2006. Although sales in the second half of the year were not as strong as in the first half, sales in the fourth quarter recovered after a slower third quarter, the company reports.
Clariant was able to raise its prices by an average of more than 1% in 2007. However, this action was not sufficient to offset a 5% rise in raw material costs, and the company’s gross margin consequently decreased to 29.2% from 30.7% in 2006. Unfavourable currency effects adversely impacted profitability by CHF68 million in 2007, resulting in an operating income before exceptionals of CHF539 million compared to CHF592 million in 2006, and an operating margin of 6.3% down from 7.3% in 2006. Net income (after exceptional items) increased to CHF5 million from a loss of CHF78 million in 2006, due to lower taxes and improved financial results. However, for continuing operations alone, 2007 net income was CHF108 million, down from CHF131 million the previous year. For 4Q 2007, Clariant reported a net loss from continuing operations of CHF21 million, compared to a net income of CHF23 million in 4Q 2006, despite a 3.8% increase in net sales to CHF2.086 billion. Although profitability was affected by higher raw material and energy costs as well as unfavourable currency movements, CEO Jan Secher says that the company ‘progressed in building momentum in operational performance’ and significantly improved cash flow in 2007. Looking ahead, pricing initiatives and ‘active portfolio re-shaping’ are expected to deliver improved profitability, he says. Clariant’s focus on cost reduction and restructuring initiatives [ADPO, January 2007] delivered results. Sales, general & administrative (SG&A) costs expressed as a percentage of sales improved to 20.8% in 2007 from 21.3% in 2006. Restructuring costs for the year reached CHF262 million with a reduction in headcount of some 800 in the past 12 months and the closure of nine smaller sites. The additional closure of three larger sites and a further 600 job cuts have been announced. In addition, more than 20% of the product portfolio has been pruned in order to reduce complexity, and has thus nearly reached the 2010 target of 25%. Due to strong demand in most areas of the business, sales in the Pigments & Additives Division
Additives for Polymers
9
EQUIPMENT
rose by 5% in local currency terms and Swiss Francs in 4Q 2007, to CHF490 million. Sales volumes grew across the board and initiatives aimed at increasing prices due to rising cost of raw materials continued to bear fruit. At the regional level, sales were up a little on the previous year in Europe, and slightly down in the USA. Once again, the division’s main growth markets in this quarter were Asia and Latin America. Despite this positive trend, however, profitability was down on the previous year, due mainly to the rising cost of raw materials and adverse developments on the currency front. The scheduled closure of a major US plant and substantial overhead cost reduction measures resulted in significantly higher restructuring costs during the quarter. The division reported an operating loss of CHF48 million compared to an income of CHF21 million for 4Q 2006. Demand for products in the plastics industry was on a par with the previous year. Within the polymer additives business, sales of antioxidants grew. For the year as a whole, divisional sales were up nearly 5% to CHF2.076 billion but operating income fell to CHF77 million from CHF211 million in 2006. Profitability was stronger in the Masterbatches Division, with annual operating income of CHF102 million and sales of CHF1.38 billion in 2007, compared with operating income of CHF112 million and sales of CHF1.254 billion in 2006. In the fourth quarter, operating income rose to CHF25 million from CHF19 million in 4Q 2006, while sales of CHF315 million were up 6% in local currencies and Swiss francs. Moderate growth in local currency terms was achieved in 4Q 2007 after adjusting for the effects of the acquisition of the Ciba masterbatches business combined with the divestiture in Australia. Weaker sales volumes as well as rising raw material and energy costs during the period were successfully offset by price rises despite strong resistance to price increases in the consumer and retail markets, Clariant says. Regional performance remained good overall with Latin America and Asia in particular continuing to show solid sales growth. Contact: Clariant International Ltd, Muttenz, Switzerland. Tel: +41 61 469 6969, Web: www.clariant.com
10
Additives for Polymers
EQUIPMENT Maguire loading device boosts additive feeder performance
U
S gravimetric blender specialist Maguire Products Inc reports that it has developed an advanced method of loading material into a gravimetric feeder. The loader/feeder combination is claimed to makes it possible to meter colorants or additives into a plastics processing machine with a degree of accuracy far exceeding that achieved with a volumetric feeder.
Even with the addition of an advanced loading system, Maguire® MGF feeders cost no more than comparable volumetric feeders, and a third or more less than competing gravimetric feeders, according to the company’s national sales manager Frank Kavanagh, and they provide the superior precision, consistency and data generation characteristic of gravimetric systems. The ‘enhanced accuracy’ of MGF Series gravimetric feeders enables moulders and extrusion processors to reduce colour and additive consumption, increase control over product quality, and document colour usage for each production run, adds Kavanagh. The feeders are available with throughput capacity of up to 16 kg (35 lbs) per hour and can be mounted directly to the throat of most moulding machines or extruders. Maguire says that the new loading device, a direct successor of the venturi loaders that it has manufactured for many years, transports material to the feeder from a gaylord, drum or other container. Rather than load continuously or intermittently, however, the loader rapidly and completely fills the feeder just once, on receiving a signal from the feeder controller that the level of colour or additive has fallen to precisely 10% of feeder hopper capacity. In this way the loss-inweight measuring function of the feeder, which is what makes a gravimetric system so accurate, continually tracks and adjusts for dosing errors without interference or distortion from the addition of new material. As a result, the feeder maintains dosage within tight tolerances from moulding shot to moulding shot and does so for hours as hopper material levels steadily decrease. The MGF feeders also benefit from vibration management software, which enables adjustment of colour metering to compensate for vibrations on fastcycling moulding presses, as well as a patent-pending
April 2008