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Crompton reports 4Q loss on increased sales
April 2004
Ferro sees sales rise but income fall For the fourth quarter of 2003, Ferro Corp reported income from continuing operations of US$2.8 million on sales up 11.3% to $407.4 million. This compares 4Q 2002 income of $7.1 million on sales of $366.2 million. During the fourth quarter, favourable foreign currency exchange rates, improved macro economic conditions in North America and stronger demand in several key end markets helped to offset the impact of continued sluggish economic conditions in Europe. Revenue from continuing operations for full-year 2003 increased 6.1% to $1.62 billion from $1.528 billion in 2002 due mainly to favourable foreign currency exchange rates. Income was $17.4 million for 2003 – impacted by after-tax charges of $10.9 million and higher raw material costs in some segments – compared with $33.7 million the previous year. Chairman and CEO Hector R. Ortino says that the fourth quarter provided positive signs of strengthening macro economic conditions. Overall demand in North America improved in many key end markets in the fourth quarter while market conditions in the Asia-Pacific region were robust through most of the year. Ferro took action in the final quarter to further improve cost structure and implemented some price increases to help offset higher raw material costs, Ortino says. Sales for the Performance Chemicals segment were $133.2 million in the fourth quarter compared with $125.9 million for the same period in 2002, a 5.8% increase. Segment income was $3.9 million, compared with $2.5 million a year ago. The revenue increase was driven by favourable foreign currency exchange rates and improved demand for speciality plastics from the appliance and packaging end markets, the company says. However, the polymer additives and speciality plastics businesses were negatively affected by raw material cost increases. For full-year 2003, segment sales increased 1.6% to $550.6 million, but income fell to $26.4 million, compared with $34.6 million in 2002. The decrease in segment income reflects lower volumes and higher raw material costs in the
Additives for Polymers
polymer additives and speciality plastics businesses over the year. The company is cautiously optimistic about prospects for 2004 but believes recovery in key end markets in Europe will lag behind North America. Contact: Ferro Corp, 1000 Lakeside Avenue, Cleveland, OH 44114-7000, USA; tel: +1-216641-8580; URL: www.ferro.com
Crompton reports 4Q loss on increased sales Crompton Corp reported a fourth quarter net loss of US$12.8 million, compared to net earnings of $2.4 million in the fourth quarter of 2002, which included OSi earnings of $17.3 million. Sales for 4Q 2003 of $561.0 million were up 17% on the previous year’s final quarter, with 8% attributable to the acquisition of the GE Specialty Chemicals business in July 2003, 4% due to the favourable impact of foreign currency translation and 5% due to improved unit volume over slightly lower selling prices. Sales for 2003 of $2.19 billion were 5% above the previous year while net earnings of $64.1 million compared to a net loss of $283.5 million for full-year 2002. Within the Polymer Products segment, fourth quarter sales of polymer additives rose 20% to $324.7 million in 2003, from $270.9 million the previous year. Of this, 13% was attributable to the acquisition of GE’s Specialty Chemicals business and the remainder due to 4% increases in both unit volume and currency translation, offset in part by lower selling prices of 1%. Plastic additives sales were up 38% due primarily to the acquisition. Rubber additives sales were down 3% and urethane additives sales declined 1%. The polymer additives business posted an operating loss of $0.9 million for the quarter compared to income of $17.5 million in the fourth quarter of 2002 mainly as a result of higher costs, an unfavourable sales mix and lower selling prices, Crompton says. The increase in costs was mainly due to higher raw material/energy costs, reduced plant throughput and increased legal expenses, offset in part by the impact of cost saving initiatives.
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Additives for Polymers
New Crompton president/CEO Bob Wood says the chief short-term priority to return the company to sustained profitability is to offset continuing cost increases for raw materials and energy with improved pricing discipline. Contact: Crompton Corp, 199 Benson Road, Middlebury, CT 06749, USA; tel: +1-203-5732000; URL: www.cromptoncorp.com
Lacklustre TiO2 performance affects Millennium Millennium Chemicals reported a net loss for 4Q 2003 of US$120 million on sales of $425 million. For the corresponding quarter of 2002, Millennium reported a net loss of $2 million on sales of $387 million. The decline in 4Q 2003 operating income was largely due to lower profits in the titanium dioxide (TiO2) segment, caused primarily by higher manufacturing costs. Robert E. Lee, president and CEO, says that, while the beginning of recovery in volumes for the TiO2 business is pleasing, the low profit in this segment is very disappointing. “We are reviewing all options to improve margins”, he says. For full-year 2003, the company’s net loss was $184 million compared to a net loss of $333 million in 2002. Full year 2003 sales were $1.687 billion compared to $1.554 billion in 2002. Millennium’s TiO2 segment reported a 4Q 2003 operating loss of $102 million, compared to operating income of $17 million in 4Q 2002 and $7 million in 3Q 2003. In local currencies, average 4Q prices decreased 1% both from last year’s fourth quarter and from the third quarter of 2003. In US dollar terms, the average global fourth quarter price was up 5% from 4Q 2002 and up 1% from 3Q 2003. The 4Q TiO2 sales volume of 152 000 tonnes increased 7% from the same quarter in 2002 and 2% from 3Q 2003. Full-year 2003 volume of 591 000 tonnes was 6% lower than in 2002. Operating rate for TiO2 production was down at 88% for the quarter compared to 96% in last year’s fourth quarter. The lower operating rate, combined with unfavourable currency
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April 2004
exchange rates and higher energy costs, resulted in a 16% increase in the manufacturing cost per tonne of TiO2 for 4Q 2003 compared to the previous year. Seasonally higher TiO2 sales and operating income are expected in 1Q 2004 but at levels well below those in 1Q 2003. Contact: Millennium Chemicals Inc, 20 Wight Avenue, Suite 100, Hunt Valley, MD 21030, USA; tel: +1-410-229-4400; fax: +1-410-2295003; URL: www.millenniumchem.com
NEWS AND VIEWS Citrate plasticizer gets EU green light for toys The European Commission’s scientific committee on toxicity, ecotoxicity and the environment (CSTEE) has ruled not only that the use of acetyl tributyl citrate (ATBC) as a plasticizer in children’s toys is safe, but also that current risk assessment models are reliable. European Union scientists concluded that the 2003 standard measurement of ATBC’s potential to leach into human saliva performed by Toxicology/Regulatory Services Inc of Charlotteville, USA is “of good quality”. A committee report says that the CSTEE is of the opinion “that the risk assessment has provided sufficient evidence to show that toys plasticized by ATBC can be safely mouthed by children”. These conclusions will help the EU develop toy safety policies, which have so far focused on phthalates. Currently 90% of the plasticizers used in Western Europe are phthalates.
Altair process under evaluation for Vietnam project Mineral Development Company No. 6 (Lidisaco), a subsidiary of the Vietnam Mineral Resource Department, has recently received approval from the Vietnamese government for a US$25 million project to exploit, process and export TiO2 pigment for the first time. The approval includes seeking investment capital through the formation of a
Ferro sees sales rise but income fall For the fourth quarter of 2003, Ferro Corp reported income from continuing operations of US$2.8 million on sales up 11.3% to $407.4 million. This compares 4Q 2002 income of $7.1 million on sales of $366.2 million. During the fourth quarter, favourable foreign currency exchange rates, improved macro economic conditions in North America and stronger demand in several key end markets helped to offset the impact of continued sluggish economic conditions in Europe. Revenue from continuing operations for full-year 2003 increased 6.1% to $1.62 billion from $1.528 billion in 2002 due mainly to favourable foreign currency exchange rates. Income was $17.4 million for 2003 – impacted by after-tax charges of $10.9 million and higher raw material costs in some segments – compared with $33.7 million the previous year. Chairman and CEO Hector R. Ortino says that the fourth quarter provided positive signs of strengthening macro economic conditions. Overall demand in North America improved in many key end markets in the fourth quarter while market conditions in the Asia-Pacific region were robust through most of the year. Ferro took action in the final quarter to further improve cost structure and implemented some price increases to help offset higher raw material costs, Ortino says. Sales for the Performance Chemicals segment were $133.2 million in the fourth quarter compared with $125.9 million for the same period in 2002, a 5.8% increase. Segment income was $3.9 million, compared with $2.5 million a year ago. The revenue increase was driven by favourable foreign currency exchange rates and improved demand for speciality plastics from the appliance and packaging end markets, the company says. However, the polymer additives and speciality plastics businesses were negatively affected by raw material cost increases. For full-year 2003, segment sales increased 1.6% to $550.6 million, but income fell to $26.4 million, compared with $34.6 million in 2002. The decrease in segment income reflects lower volumes and higher raw material costs in the
Additives for Polymers
polymer additives and speciality plastics businesses over the year. The company is cautiously optimistic about prospects for 2004 but believes recovery in key end markets in Europe will lag behind North America. Contact: Ferro Corp, 1000 Lakeside Avenue, Cleveland, OH 44114-7000, USA; tel: +1-216641-8580; URL: www.ferro.com
Crompton reports 4Q loss on increased sales Crompton Corp reported a fourth quarter net loss of US$12.8 million, compared to net earnings of $2.4 million in the fourth quarter of 2002, which included OSi earnings of $17.3 million. Sales for 4Q 2003 of $561.0 million were up 17% on the previous year’s final quarter, with 8% attributable to the acquisition of the GE Specialty Chemicals business in July 2003, 4% due to the favourable impact of foreign currency translation and 5% due to improved unit volume over slightly lower selling prices. Sales for 2003 of $2.19 billion were 5% above the previous year while net earnings of $64.1 million compared to a net loss of $283.5 million for full-year 2002. Within the Polymer Products segment, fourth quarter sales of polymer additives rose 20% to $324.7 million in 2003, from $270.9 million the previous year. Of this, 13% was attributable to the acquisition of GE’s Specialty Chemicals business and the remainder due to 4% increases in both unit volume and currency translation, offset in part by lower selling prices of 1%. Plastic additives sales were up 38% due primarily to the acquisition. Rubber additives sales were down 3% and urethane additives sales declined 1%. The polymer additives business posted an operating loss of $0.9 million for the quarter compared to income of $17.5 million in the fourth quarter of 2002 mainly as a result of higher costs, an unfavourable sales mix and lower selling prices, Crompton says. The increase in costs was mainly due to higher raw material/energy costs, reduced plant throughput and increased legal expenses, offset in part by the impact of cost saving initiatives.
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Additives for Polymers
New Crompton president/CEO Bob Wood says the chief short-term priority to return the company to sustained profitability is to offset continuing cost increases for raw materials and energy with improved pricing discipline. Contact: Crompton Corp, 199 Benson Road, Middlebury, CT 06749, USA; tel: +1-203-5732000; URL: www.cromptoncorp.com
Lacklustre TiO2 performance affects Millennium Millennium Chemicals reported a net loss for 4Q 2003 of US$120 million on sales of $425 million. For the corresponding quarter of 2002, Millennium reported a net loss of $2 million on sales of $387 million. The decline in 4Q 2003 operating income was largely due to lower profits in the titanium dioxide (TiO2) segment, caused primarily by higher manufacturing costs. Robert E. Lee, president and CEO, says that, while the beginning of recovery in volumes for the TiO2 business is pleasing, the low profit in this segment is very disappointing. “We are reviewing all options to improve margins”, he says. For full-year 2003, the company’s net loss was $184 million compared to a net loss of $333 million in 2002. Full year 2003 sales were $1.687 billion compared to $1.554 billion in 2002. Millennium’s TiO2 segment reported a 4Q 2003 operating loss of $102 million, compared to operating income of $17 million in 4Q 2002 and $7 million in 3Q 2003. In local currencies, average 4Q prices decreased 1% both from last year’s fourth quarter and from the third quarter of 2003. In US dollar terms, the average global fourth quarter price was up 5% from 4Q 2002 and up 1% from 3Q 2003. The 4Q TiO2 sales volume of 152 000 tonnes increased 7% from the same quarter in 2002 and 2% from 3Q 2003. Full-year 2003 volume of 591 000 tonnes was 6% lower than in 2002. Operating rate for TiO2 production was down at 88% for the quarter compared to 96% in last year’s fourth quarter. The lower operating rate, combined with unfavourable currency
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April 2004
exchange rates and higher energy costs, resulted in a 16% increase in the manufacturing cost per tonne of TiO2 for 4Q 2003 compared to the previous year. Seasonally higher TiO2 sales and operating income are expected in 1Q 2004 but at levels well below those in 1Q 2003. Contact: Millennium Chemicals Inc, 20 Wight Avenue, Suite 100, Hunt Valley, MD 21030, USA; tel: +1-410-229-4400; fax: +1-410-2295003; URL: www.millenniumchem.com
NEWS AND VIEWS Citrate plasticizer gets EU green light for toys The European Commission’s scientific committee on toxicity, ecotoxicity and the environment (CSTEE) has ruled not only that the use of acetyl tributyl citrate (ATBC) as a plasticizer in children’s toys is safe, but also that current risk assessment models are reliable. European Union scientists concluded that the 2003 standard measurement of ATBC’s potential to leach into human saliva performed by Toxicology/Regulatory Services Inc of Charlotteville, USA is “of good quality”. A committee report says that the CSTEE is of the opinion “that the risk assessment has provided sufficient evidence to show that toys plasticized by ATBC can be safely mouthed by children”. These conclusions will help the EU develop toy safety policies, which have so far focused on phthalates. Currently 90% of the plasticizers used in Western Europe are phthalates.
Altair process under evaluation for Vietnam project Mineral Development Company No. 6 (Lidisaco), a subsidiary of the Vietnam Mineral Resource Department, has recently received approval from the Vietnamese government for a US$25 million project to exploit, process and export TiO2 pigment for the first time. The approval includes seeking investment capital through the formation of a