- Email: [email protected]
Cognis set to review entire business group
F O C U S Oleochemicals, a Malaysian joint venture of Felda Palm Industries and P&G Chemicals, intends to set up a fatty acid plant at Kuantan, Malaysia, to produce 120,000 tonnes/y of vegetable oil-based fatty acids [Focus on Surfactants, May 2005]. The facility will come onstream in 2006. Among the leading oleochemicals companies is Malaysia-based Cognis Oleochemicals, which generates sales of over €690 M/y. Chemical Week, 5 Apr 2006, (Website: http://www.chemweek.com)
COMPANY RESULTS Huntsman nearly doubles operating income but ends 2005 with a net loss Huntsman Corp almost doubled its operating income in 2005 to $813.9 M, with a 13% increase in revenues to $12.961 bn. Despite the increase in operating income and revenues, the company reported a net loss of $34.6 M in 2005, down from a loss of $227.7 M in 2004. Huntsman faced a difficult 4Q 2005 with a financial fallout of around $140 M due to devastating impact of the Gulf Coast hurricanes and spiralling increases in material and energy costs. The company’s performance products unit reported increases in revenues and EBITDA by 1.7% and 72.9%, respectively. Sales volume has dropped by 28% in 4Q 2005 due to the hurricanes, while some surfactants and glycols sales also logged lower sales volume.
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2006” with underlying growth on the base business of 6% and a better than expected contribution from Boots Healthcare International in its first two months. Underlying growth was driven by the success of initiatives like Vanish Oxi Action Crystal White and Cillit Bang Stain and Drain supported by increasing marketing investment, Becht says. In Europe (54% of net revenues), net revenues grew 16% to £623 M. Underlying growth was 5%. The major contributors to growth were fabric care, surface care and home care. Operating profit increased by 23% to £133 M. In North America and Australia, which together account for 28% of revenues, net sales were up 11% to £326 M while operating profit was 6% higher at £47 M. Developing markets (18% of total revenues) saw 9% growth in sales to £213 M and operating profit up more than 30% to £16 M. At constant exchange rates, Fabric Care net revenues increased 9% to £291 M in 1Q 2006. The major drivers were strong continuing growth for Vanish Oxi Action fabric treatment due to the launch of Vanish Oxi Action Crystal White, and for both Woolite fine fabric and Calgon water softeners. Laundry detergent sales improved. Net revenues for dishwashing products increased 1% to £154 M. Home Care net revenues improved by 12% to £172 M and Surface Care net revenues grew 4% to £232 M. The company is optimistic of reaching its targets for 2006. Press release from: Reckitt Benckiser plc, 103-105 Bath Road, Slough SL1 3UH, UK. Tel: +44 1753 217800. Fax: +44 1753 217899. Website: http://www.reckittbenckiser.com (27 Apr 2006) & Handelsblatt Wirtschafts- und Finanzzeitung, 28 Apr 2006, (83), 16 (in German)
European Paint and Resin News, Mar 2006, 44 (3), 9
Reckitt Benckiser posts strong start in 1Q 2006 Reckitt Benckiser increased its net profits by 14% in 1Q 2006 to £141 M, excluding restructuring charges, and its operating profit for the same period rose by 23% to £196 M. If restructuring charges are included, net income fell 11% to £110 M and operating profit was down 4% at £154 M. Sales in 1Q 2006 were up 18% to £1.16 bn at actual exchange rates. According to CEO Bart Becht, the company “made a strong start to 6
net profits of €186 M. Henkel’s boss is predicting a 10% rise in operating profits and profits per share in 2006. Sales are expected to grow 3-4%. Sales rose 13% in 2005 to almost €12 bn, and operating profits rose 16.7% to almost €1.2 bn. Net profits were up 2.9% at €770 M for the year. Handelsblatt Wirtschafts- und Finanzzeitung, 3 May & 10 Apr 2006, (Website: http://www.handelsblatt.com) (in German)
Godrej Consumer Products: results for 2005-2006 Godrej Consumer Products Ltd has reported a net profit of Rup 301.6 M on sales (net of excise) of Rup 1641.2 M for 4Q ended Mar 2006 (net profit of Rup 288.2 M on sales of Rup 1385 M in 4Q ended Mar 2005). During 4Q 2005-2006, the company recorded sales of Rup 985.4 M from soaps, Rup 430.2 M from hair colours, Rup 143.9 M from toiletries and Rup 44.4 M from liquid detergents businesses (sales of Rup 835.2 M from soaps, Rup 379.5 M from hair colours, Rup 73.5 M from toiletries and Rup 47.7 M from liquid detergents businesses in 4Q 2004-2005). Godrej posted a net profit of Rup 1212 M on sales (net of excise) of Rup 6573.2 M for the year ended Mar 2006 (net profit of Rup 895.9 M on sales of Rup 5626.7 M in the year ended Mar 2005). Business Line, 27 Apr 2006, 13 (116), 7
COMPANY NEWS Cognis set to review entire business group
Henkel posts strongest growth in Asia Henkel has achieved its strongest growth rates at the start of 2006 in Asia/Pacific. The company’s EBIT was up 11.7% at €295 M and net profits 10.1% at €185 M. Growth in Asia was 17%. Group sales were up 11% in 1Q 2006 at €3.05 bn. The consumer adhesives business posted growth of 20.8%, and detergents 5.4% to €1.01 bn. The toiletries division was up 8.1% at €642 M. Analysts had expected 1Q 2006 sales of €2.92 bn and EBIT of €292 M and
Investment funds Permira and GS Capital Partners, the two major shareholders in Cognis, recently engaged the services of Goldman Sachs and J-P Morgan to evaluate various strategic options for the German chemicals group. Although neither shareholder has disclosed further details, the most likely solutions are either the group’s sale or its entry onto the stock exchange. Cognis has a third shareholder, SV Life Sciences, but this company has not announced what it intends to do JUNE 2006
F O C U S with its shares. A decision is anticipated before the end of 2006. Cognis produces a large range of speciality products for the detergents, cosmetics, pharmaceuticals, agrofoodstuffs, textiles, inks and paints industries. Hope at the company is being pinned in particular on the new strategic orientation towards the trend for “wellness and sustainability”, which extends from hair care to detergents. This is Cognis’s largest sector, accounting for 40% of sales and posting growth of 9.3%. The other divisions are showing only slight growth. Indeed, the process chemicals division had sales down 10.4% in 2005. For 2005 the company posted a 3.3% increase in turnover to €3.17 bn, attributed to the gearing up to attractive new markets. Significant improvement in EBIDTA is expected in 2006. The decision by Permira and GS Capital Partners to sell their investment coincides with a major increase in Cognis’ debts which reached €136 M in 2005 (compared with €27 M in 2004) because of a marked depreciation in assets (€61 M), restructuring costs (€34 M) and an increase in supply costs, all of which were only offset in part by an increase in selling prices. Cognis still makes most of its sales in Europe. Germany accounts for 31% of its business and the rest of Europe 26%. Asia (where economic growth is strongest) accounts for only 14% of Cognis’ turnover. If a decision is made to sell, this will involve the entire group including the 50% stake held in Cognis Oleochemicals [Focus on Surfactants, Jan 2006]. The remaining 50% is held by Golden Hope, Malaysia, which has been operating the business since Jan 2006. Output from the joint venture includes plasticizers, lubricants and emulsifiers made from palm oil and other natural sources. Around 1100 staff are employed at the venture’s operations in Europe, Asia, North and South America. In total, the company employs about 8000 people, and operates production sites and service centres in 30 countries. Chimie Pharma Hebdo, 10 Apr 2006, (336), 10 (in French) & Handelsblatt Wirtschafts- und Finanzzeitung, 5 Apr 2006, (Website: http://www.handelsblatt.com) (in German)
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Talk of Procter swoop adds shine to Unilever There may be regulatory stumbling blocks but traders cannot seem to get thoughts of a bid for the household goods and food group Unilever out of their minds. Valued at £16 bn plus £8 bn of debt, Unilever is seen as a perfect target for a break-up bid. It has a high enough free cashflow yield (about 10%) to service the colossal amount of money a consortium would have to borrow. The group can also be easily divided up as it trades in clearly defined units that are easy to sell separately. On 1 Mar 2006, Unilever’s US rival Procter & Gamble was rumoured to be stalking the group with a bid worth 730p a share. Trade was brisk, with 28.8 M Unilever shares changing hands, against an average daily volume for the stock of 13 M. Analysts were quick to point out there would be a significant amount of regulatory hurdles for Procter to overcome, but given the broad range of businesses Unilever is involved in, there should be no shortage of buyers for anything that Procter was forced to sell off. Shares in Unilever rallied 11p to close at 598.5p. In related developments, Unilever announced on 4 May 2006 that the disposal of its frozen foods division is on track and that it would be sending out a full sale memorandum by the end of the month to private equity firms interested in the business. However, first-quarter results announced from the owner of Dove soap, Knorr soups and Sunsilk shampoo clearly disappointed investors. Unilever shares finished the day down nearly 3%. The figures revealed sales growth of just 2.9%, down from 5% in the fourth quarter. Unilever’s profit margin was also in retreat, falling 0.2% to 14.8%, as the company was forced to spend more on advertising and promotions. In Europe, its key market, it is suffering from weak demand. A programme of cost cuts made little difference – they merely offset the effect of higher input prices.
which produces fatty acids used for making detergents, lubricants and personal healthcare products, was progressing well with strong expressions of interest from a number of potential buyers. The sale is expected to fetch between £200 M and £400 M. Germany’s Cognis was thought to be a likely potential bidder and several Asian companies are also believed to have submitted bids. The Independent, 5 May 2006, (Website: http://www.independent.co.uk)
Dow to scale back West Virginia operations Dow Chemical and Bayer MaterialScience have agreed to terminate a services contract covering Dow’s South Charleston site in West Virginia, effective 1 Apr 2009. The move will result in the loss of some 230-330 jobs at the site from the current 913. Dow has approximately 80 workers dedicated to providing services to Bayer under the support agreement, including operations, maintenance and laboratory services; power and wastewater treatment; and professional services. Bayer also has 102 personnel at a polyols production unit and onsite technical centre at Dow’s South Charleston site. Dow will maintain its speciality chemicals operations at the site, particularly the manufacture of Ucon fluids and lubricants and Triton surfactants. Chemical Week, 5 Apr 2006, (Website: http://www.chemweek.com)
Air Products finished Tomah3 buyout
ICI pursues disposal of Uniqema
Air Products has completed its cash purchase of US-based firm Tomah3 Products for around $115 M. This will expand Air Products’ Performance Materials business, complementing its speciality surfactants and amines products, and adding new market channels and product applications. Tomah3 manufactures speciality surfactants and processing aids, mainly for industrial and institutional cleaning products and for mining and oil field applications. Tomah has about 90 employees, and reported sales of $73 M in 2005.
In its latest financial report, ICI said the sale of its Uniqema business,
Chemical Market Reporter, 10 Apr 2006, (Website: http://www.chemicalmarketreporter.com)
The Independent, 2 Mar & 5 May 2006 (Website: http://www.independent.co.uk)
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COMPANY RESULTS Huntsman nearly doubles operating income but ends 2005 with a net loss Huntsman Corp almost doubled its operating income in 2005 to $813.9 M, with a 13% increase in revenues to $12.961 bn. Despite the increase in operating income and revenues, the company reported a net loss of $34.6 M in 2005, down from a loss of $227.7 M in 2004. Huntsman faced a difficult 4Q 2005 with a financial fallout of around $140 M due to devastating impact of the Gulf Coast hurricanes and spiralling increases in material and energy costs. The company’s performance products unit reported increases in revenues and EBITDA by 1.7% and 72.9%, respectively. Sales volume has dropped by 28% in 4Q 2005 due to the hurricanes, while some surfactants and glycols sales also logged lower sales volume.
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2006” with underlying growth on the base business of 6% and a better than expected contribution from Boots Healthcare International in its first two months. Underlying growth was driven by the success of initiatives like Vanish Oxi Action Crystal White and Cillit Bang Stain and Drain supported by increasing marketing investment, Becht says. In Europe (54% of net revenues), net revenues grew 16% to £623 M. Underlying growth was 5%. The major contributors to growth were fabric care, surface care and home care. Operating profit increased by 23% to £133 M. In North America and Australia, which together account for 28% of revenues, net sales were up 11% to £326 M while operating profit was 6% higher at £47 M. Developing markets (18% of total revenues) saw 9% growth in sales to £213 M and operating profit up more than 30% to £16 M. At constant exchange rates, Fabric Care net revenues increased 9% to £291 M in 1Q 2006. The major drivers were strong continuing growth for Vanish Oxi Action fabric treatment due to the launch of Vanish Oxi Action Crystal White, and for both Woolite fine fabric and Calgon water softeners. Laundry detergent sales improved. Net revenues for dishwashing products increased 1% to £154 M. Home Care net revenues improved by 12% to £172 M and Surface Care net revenues grew 4% to £232 M. The company is optimistic of reaching its targets for 2006. Press release from: Reckitt Benckiser plc, 103-105 Bath Road, Slough SL1 3UH, UK. Tel: +44 1753 217800. Fax: +44 1753 217899. Website: http://www.reckittbenckiser.com (27 Apr 2006) & Handelsblatt Wirtschafts- und Finanzzeitung, 28 Apr 2006, (83), 16 (in German)
European Paint and Resin News, Mar 2006, 44 (3), 9
Reckitt Benckiser posts strong start in 1Q 2006 Reckitt Benckiser increased its net profits by 14% in 1Q 2006 to £141 M, excluding restructuring charges, and its operating profit for the same period rose by 23% to £196 M. If restructuring charges are included, net income fell 11% to £110 M and operating profit was down 4% at £154 M. Sales in 1Q 2006 were up 18% to £1.16 bn at actual exchange rates. According to CEO Bart Becht, the company “made a strong start to 6
net profits of €186 M. Henkel’s boss is predicting a 10% rise in operating profits and profits per share in 2006. Sales are expected to grow 3-4%. Sales rose 13% in 2005 to almost €12 bn, and operating profits rose 16.7% to almost €1.2 bn. Net profits were up 2.9% at €770 M for the year. Handelsblatt Wirtschafts- und Finanzzeitung, 3 May & 10 Apr 2006, (Website: http://www.handelsblatt.com) (in German)
Godrej Consumer Products: results for 2005-2006 Godrej Consumer Products Ltd has reported a net profit of Rup 301.6 M on sales (net of excise) of Rup 1641.2 M for 4Q ended Mar 2006 (net profit of Rup 288.2 M on sales of Rup 1385 M in 4Q ended Mar 2005). During 4Q 2005-2006, the company recorded sales of Rup 985.4 M from soaps, Rup 430.2 M from hair colours, Rup 143.9 M from toiletries and Rup 44.4 M from liquid detergents businesses (sales of Rup 835.2 M from soaps, Rup 379.5 M from hair colours, Rup 73.5 M from toiletries and Rup 47.7 M from liquid detergents businesses in 4Q 2004-2005). Godrej posted a net profit of Rup 1212 M on sales (net of excise) of Rup 6573.2 M for the year ended Mar 2006 (net profit of Rup 895.9 M on sales of Rup 5626.7 M in the year ended Mar 2005). Business Line, 27 Apr 2006, 13 (116), 7
COMPANY NEWS Cognis set to review entire business group
Henkel posts strongest growth in Asia Henkel has achieved its strongest growth rates at the start of 2006 in Asia/Pacific. The company’s EBIT was up 11.7% at €295 M and net profits 10.1% at €185 M. Growth in Asia was 17%. Group sales were up 11% in 1Q 2006 at €3.05 bn. The consumer adhesives business posted growth of 20.8%, and detergents 5.4% to €1.01 bn. The toiletries division was up 8.1% at €642 M. Analysts had expected 1Q 2006 sales of €2.92 bn and EBIT of €292 M and
Investment funds Permira and GS Capital Partners, the two major shareholders in Cognis, recently engaged the services of Goldman Sachs and J-P Morgan to evaluate various strategic options for the German chemicals group. Although neither shareholder has disclosed further details, the most likely solutions are either the group’s sale or its entry onto the stock exchange. Cognis has a third shareholder, SV Life Sciences, but this company has not announced what it intends to do JUNE 2006
F O C U S with its shares. A decision is anticipated before the end of 2006. Cognis produces a large range of speciality products for the detergents, cosmetics, pharmaceuticals, agrofoodstuffs, textiles, inks and paints industries. Hope at the company is being pinned in particular on the new strategic orientation towards the trend for “wellness and sustainability”, which extends from hair care to detergents. This is Cognis’s largest sector, accounting for 40% of sales and posting growth of 9.3%. The other divisions are showing only slight growth. Indeed, the process chemicals division had sales down 10.4% in 2005. For 2005 the company posted a 3.3% increase in turnover to €3.17 bn, attributed to the gearing up to attractive new markets. Significant improvement in EBIDTA is expected in 2006. The decision by Permira and GS Capital Partners to sell their investment coincides with a major increase in Cognis’ debts which reached €136 M in 2005 (compared with €27 M in 2004) because of a marked depreciation in assets (€61 M), restructuring costs (€34 M) and an increase in supply costs, all of which were only offset in part by an increase in selling prices. Cognis still makes most of its sales in Europe. Germany accounts for 31% of its business and the rest of Europe 26%. Asia (where economic growth is strongest) accounts for only 14% of Cognis’ turnover. If a decision is made to sell, this will involve the entire group including the 50% stake held in Cognis Oleochemicals [Focus on Surfactants, Jan 2006]. The remaining 50% is held by Golden Hope, Malaysia, which has been operating the business since Jan 2006. Output from the joint venture includes plasticizers, lubricants and emulsifiers made from palm oil and other natural sources. Around 1100 staff are employed at the venture’s operations in Europe, Asia, North and South America. In total, the company employs about 8000 people, and operates production sites and service centres in 30 countries. Chimie Pharma Hebdo, 10 Apr 2006, (336), 10 (in French) & Handelsblatt Wirtschafts- und Finanzzeitung, 5 Apr 2006, (Website: http://www.handelsblatt.com) (in German)
JUNE 2006
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Talk of Procter swoop adds shine to Unilever There may be regulatory stumbling blocks but traders cannot seem to get thoughts of a bid for the household goods and food group Unilever out of their minds. Valued at £16 bn plus £8 bn of debt, Unilever is seen as a perfect target for a break-up bid. It has a high enough free cashflow yield (about 10%) to service the colossal amount of money a consortium would have to borrow. The group can also be easily divided up as it trades in clearly defined units that are easy to sell separately. On 1 Mar 2006, Unilever’s US rival Procter & Gamble was rumoured to be stalking the group with a bid worth 730p a share. Trade was brisk, with 28.8 M Unilever shares changing hands, against an average daily volume for the stock of 13 M. Analysts were quick to point out there would be a significant amount of regulatory hurdles for Procter to overcome, but given the broad range of businesses Unilever is involved in, there should be no shortage of buyers for anything that Procter was forced to sell off. Shares in Unilever rallied 11p to close at 598.5p. In related developments, Unilever announced on 4 May 2006 that the disposal of its frozen foods division is on track and that it would be sending out a full sale memorandum by the end of the month to private equity firms interested in the business. However, first-quarter results announced from the owner of Dove soap, Knorr soups and Sunsilk shampoo clearly disappointed investors. Unilever shares finished the day down nearly 3%. The figures revealed sales growth of just 2.9%, down from 5% in the fourth quarter. Unilever’s profit margin was also in retreat, falling 0.2% to 14.8%, as the company was forced to spend more on advertising and promotions. In Europe, its key market, it is suffering from weak demand. A programme of cost cuts made little difference – they merely offset the effect of higher input prices.
which produces fatty acids used for making detergents, lubricants and personal healthcare products, was progressing well with strong expressions of interest from a number of potential buyers. The sale is expected to fetch between £200 M and £400 M. Germany’s Cognis was thought to be a likely potential bidder and several Asian companies are also believed to have submitted bids. The Independent, 5 May 2006, (Website: http://www.independent.co.uk)
Dow to scale back West Virginia operations Dow Chemical and Bayer MaterialScience have agreed to terminate a services contract covering Dow’s South Charleston site in West Virginia, effective 1 Apr 2009. The move will result in the loss of some 230-330 jobs at the site from the current 913. Dow has approximately 80 workers dedicated to providing services to Bayer under the support agreement, including operations, maintenance and laboratory services; power and wastewater treatment; and professional services. Bayer also has 102 personnel at a polyols production unit and onsite technical centre at Dow’s South Charleston site. Dow will maintain its speciality chemicals operations at the site, particularly the manufacture of Ucon fluids and lubricants and Triton surfactants. Chemical Week, 5 Apr 2006, (Website: http://www.chemweek.com)
Air Products finished Tomah3 buyout
ICI pursues disposal of Uniqema
Air Products has completed its cash purchase of US-based firm Tomah3 Products for around $115 M. This will expand Air Products’ Performance Materials business, complementing its speciality surfactants and amines products, and adding new market channels and product applications. Tomah3 manufactures speciality surfactants and processing aids, mainly for industrial and institutional cleaning products and for mining and oil field applications. Tomah has about 90 employees, and reported sales of $73 M in 2005.
In its latest financial report, ICI said the sale of its Uniqema business,
Chemical Market Reporter, 10 Apr 2006, (Website: http://www.chemicalmarketreporter.com)
The Independent, 2 Mar & 5 May 2006 (Website: http://www.independent.co.uk)
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