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Lanxess begins realignment after subdued start to 2014
FINANCIALS
Segetis receives funding to aid commercialization of non-phthalate plasticizer
U
S green chemistry company Segetis Inc has received a US$325 000 NextGen Energy grant from Minnesota’s Department of Agriculture through the state’s Agricultural Growth, Research and Innovation (AGRI) programme. The company was also recently granted $21.2 million in funding by the Iron Range Resources and Rehabilitation Board (IRRRB), a state economic development agency based in northeastern Minnesota. Segetis says that the NextGen Energy grant will be used to optimize process development capabilities and allow it to expand the development of its bio-based plasticizer platform towards commercialization. The funding will reportedly be used for equipment, capital construction and materials for operation of the company’s pilot plant located in Golden Valley, MN, USA. Segetis has developed a levulinic ketal-based plasticizer using feedstocks derived via a proprietary process from agricultural and forestry wastes [see also ADPO, April 2011]. The IRRRB funding was awarded to Segetis for the construction of a commercial-scale plant at the Laskin Energy Park in Hoyt Lakes, MN, that will produce levulinic acid and convert a portion of that output into plasticizer. The initial facility is expected to have annual levulinic acid production capacity of 22 million pounds (10 million kg), with around 35 million pounds of plasticizer production capacity. According to Segetis VP of Operations Andrew Skinner, who worked with the IRRRB team for several months in the process of developing this proposal, this first commercial project is ‘significant to the future growth of Segetis’. It will also bring sustainable economic benefits to the Iron Range area through job creation and use of Minnesota’s renewable resources, he says. It is estimated that the initial plant will take around 18 months to build once necessary permits and financing are secured allowing construction to start.
Contact: Segetis Inc, Golden Valley, MN, USA. Tel: +1 763 795 7200, Web: www.segetis.com
August 2014
Audia International plans to build new US plant
P
ennsylvania-based polyolefin and masterbatch company Audia International, Inc has announced that it is to construct a new manufacturing facility in the state of Georgia. The company will invest more than US$50 million in the plant, which will be located in the newly developed Walker County Business Park north of LaFayette. The plant is slated to begin operation in the third quarter of 2015. According to Audia’s representative Todd Gummersbach, the company engaged in an extensive search covering six states before taking the decision to build in Walker County. Negotiations between Audia, Walker County Development Authority and other Georgia state bodies occupied some 18 months before reaching a successful conclusion. The development authority has already begun work on the engineering for the new plant site. It is hoped that construction of the plant itself can begin in late summer or early autumn. The new plastics facility will support Audia’s three subsidiaries: Uniform Color Co, Washington Penn Plastic and Southern Polymer, Inc. Uniform Color is a global supplier of masterbatches and recently purchased BASF’s liquid masterbatch business [ADPO, April 2014].
Contact: Uniform Color Co, Holland, MI, USA. Tel: +1 616 394 3800, Web: www.uniformcolor.com
FINANCIALS Lanxess begins realignment after subdued start to 2014
F
or the first quarter of 2014, Germany’s Lanxess posted net income of E25 million, level with 1Q 2013. EBITDA pre-exceptionals increased by 17.8% year on year to E205 million but the company’s net sales of E2 billion were down 2.5% compared to the previous year. Following this modest start to 2014, Lanxess is currently developing measures to realign the company in order to ‘become significantly more competitive and profitable
Additives for Polymers
9
FINANCIALS
again’, says Lanxess’ chairman Matthias Zachert. ‘The focus will therefore be on the business portfolio, our business units, the efficiency of our administration and our production sites’, he continues. Administrative structures are to be optimized and decision-making processes streamlined. Customer and market orientation in the business units are to be improved. The profitability of the sites will be analysed and consideration given to temporary or permanent shutdowns of plants, Zachert reveals. The first quarter was characterized by a persistently challenging market environment for synthetic rubber, he reports, and Lanxess will therefore also explore options to make its rubber activities more competitive and to balance its business portfolio. The personnel adjustments that were initiated last year as part of the ‘Advance’ efficiency programme [ADPO, November 2013] have been completed in line with expectations, the company says. Furthermore, Lanxess’ board of management decided to utilize the existing authorized capital in part and increase the share capital of the company by 10%, excluding the subscription rights of the shareholders. The increase of the share capital by a nominal amount of E8 320 266 was against the issuance of 8 320 266 new, no par-value bearer shares in the company. These were offered immediately to institutional investors by means of a private placement, using an accelerated book-building process. The placement resulted in total proceeds of around E430 million. This corporate action should help finance upcoming restructuring measures and generally strengthen the financial position of the company as well as its investment grade credit ratings, Lanxess explains. Returning to the first-quarter figures, the company reported ‘an encouraging increase in volumes’ in all segments, though this was insufficient to offset the drop in selling prices and negative currency effects, resulting in the 2.5% decline in sales. The improvement in EBITDA preexceptionals was mainly due to positive volume effects in all segments, a lower cost base resulting from the Advance programme and the absence of one-time charges. Earnings were diminished as a result of lower selling prices. The EBITDA margin pre-exceptionals rose to 10.0%, against 8.3% for 1Q 2013. In 1Q 2014, sales in the EMEA region (excluding Germany) were E618 million, nearly level with 1Q 2013, while sales in Germany increased by 3.0% to E381 million. In North America, sales grew by 1.2% to E331 million. However, in both Latin America and the Asia-Pacific region, sales receded, by 11.4% and 6.4% respectively.
10
Additives for Polymers
In the Performance Polymers and Advanced Intermediates segments, sales for 1Q 2014 declined compared to the previous year despite volume growth but EBITDA pre-exceptionals improved somewhat. However, the Performance Chemicals segment grew sales by 5.8% to E550 million, with expanded volumes in all business units. Inorganic pigments and other products used in the construction industry benefited from the good demand attributable to the mild winter in Europe. Compared to 1Q 2013, EBITDA pre-exceptionals for the segment rose by one third this year to E68 million, mainly due to the positive volume development. Looking ahead, Lanxess anticipates that the economic environment will continue to slowly recover during the remainder of the year, with the main impetus expected from the established economic regions. However, the group believes that the challenging competitive environment for its synthetic rubber businesses will continue, with price pressure persisting, and is therefore predicting a continuing subdued development for the Performance Polymers segment in the upcoming quarters. Zachert cautions that ‘the next two to three years won’t be easy’ but remains confident that Lanxess will ‘emerge from the realignment stronger than before’. Contact: Lanxess AG, Cologne, Germany. Tel: +49 221 8885 0, Web: www.lanxess.com
Holland Colours reports increase in annual net profit on par sales
F
or its 2013/2014 financial year (FY) ended 31 March 2014, Dutch masterbatch producer Holland Colours posted sales of E66.0 million, up a marginal 0.1% from E65.9 million the previous year, under ‘persistently challenging’ economic conditions. However, the company’s operating result rose 10% for the year to E 5.4 million while its annual net profit climbed more than 20% to E3.5 million. Looking at the company’s sales performance in more detail, volume growth was about 3% in FY 2013/2014 but this was offset by 2% negative currency effects, largely due to the lower US dollar, while price and mix effects also had a negative effect of nearly 1%. 1H sales decreased almost 1% year on year but sales in the second half were nearly 1% higher. Compared to FY 2012/2013, Holland Colours’ sales in Europe grew by 3% while sales in Americas were on a par
August 2014
Segetis receives funding to aid commercialization of non-phthalate plasticizer
U
S green chemistry company Segetis Inc has received a US$325 000 NextGen Energy grant from Minnesota’s Department of Agriculture through the state’s Agricultural Growth, Research and Innovation (AGRI) programme. The company was also recently granted $21.2 million in funding by the Iron Range Resources and Rehabilitation Board (IRRRB), a state economic development agency based in northeastern Minnesota. Segetis says that the NextGen Energy grant will be used to optimize process development capabilities and allow it to expand the development of its bio-based plasticizer platform towards commercialization. The funding will reportedly be used for equipment, capital construction and materials for operation of the company’s pilot plant located in Golden Valley, MN, USA. Segetis has developed a levulinic ketal-based plasticizer using feedstocks derived via a proprietary process from agricultural and forestry wastes [see also ADPO, April 2011]. The IRRRB funding was awarded to Segetis for the construction of a commercial-scale plant at the Laskin Energy Park in Hoyt Lakes, MN, that will produce levulinic acid and convert a portion of that output into plasticizer. The initial facility is expected to have annual levulinic acid production capacity of 22 million pounds (10 million kg), with around 35 million pounds of plasticizer production capacity. According to Segetis VP of Operations Andrew Skinner, who worked with the IRRRB team for several months in the process of developing this proposal, this first commercial project is ‘significant to the future growth of Segetis’. It will also bring sustainable economic benefits to the Iron Range area through job creation and use of Minnesota’s renewable resources, he says. It is estimated that the initial plant will take around 18 months to build once necessary permits and financing are secured allowing construction to start.
Contact: Segetis Inc, Golden Valley, MN, USA. Tel: +1 763 795 7200, Web: www.segetis.com
August 2014
Audia International plans to build new US plant
P
ennsylvania-based polyolefin and masterbatch company Audia International, Inc has announced that it is to construct a new manufacturing facility in the state of Georgia. The company will invest more than US$50 million in the plant, which will be located in the newly developed Walker County Business Park north of LaFayette. The plant is slated to begin operation in the third quarter of 2015. According to Audia’s representative Todd Gummersbach, the company engaged in an extensive search covering six states before taking the decision to build in Walker County. Negotiations between Audia, Walker County Development Authority and other Georgia state bodies occupied some 18 months before reaching a successful conclusion. The development authority has already begun work on the engineering for the new plant site. It is hoped that construction of the plant itself can begin in late summer or early autumn. The new plastics facility will support Audia’s three subsidiaries: Uniform Color Co, Washington Penn Plastic and Southern Polymer, Inc. Uniform Color is a global supplier of masterbatches and recently purchased BASF’s liquid masterbatch business [ADPO, April 2014].
Contact: Uniform Color Co, Holland, MI, USA. Tel: +1 616 394 3800, Web: www.uniformcolor.com
FINANCIALS Lanxess begins realignment after subdued start to 2014
F
or the first quarter of 2014, Germany’s Lanxess posted net income of E25 million, level with 1Q 2013. EBITDA pre-exceptionals increased by 17.8% year on year to E205 million but the company’s net sales of E2 billion were down 2.5% compared to the previous year. Following this modest start to 2014, Lanxess is currently developing measures to realign the company in order to ‘become significantly more competitive and profitable
Additives for Polymers
9
FINANCIALS
again’, says Lanxess’ chairman Matthias Zachert. ‘The focus will therefore be on the business portfolio, our business units, the efficiency of our administration and our production sites’, he continues. Administrative structures are to be optimized and decision-making processes streamlined. Customer and market orientation in the business units are to be improved. The profitability of the sites will be analysed and consideration given to temporary or permanent shutdowns of plants, Zachert reveals. The first quarter was characterized by a persistently challenging market environment for synthetic rubber, he reports, and Lanxess will therefore also explore options to make its rubber activities more competitive and to balance its business portfolio. The personnel adjustments that were initiated last year as part of the ‘Advance’ efficiency programme [ADPO, November 2013] have been completed in line with expectations, the company says. Furthermore, Lanxess’ board of management decided to utilize the existing authorized capital in part and increase the share capital of the company by 10%, excluding the subscription rights of the shareholders. The increase of the share capital by a nominal amount of E8 320 266 was against the issuance of 8 320 266 new, no par-value bearer shares in the company. These were offered immediately to institutional investors by means of a private placement, using an accelerated book-building process. The placement resulted in total proceeds of around E430 million. This corporate action should help finance upcoming restructuring measures and generally strengthen the financial position of the company as well as its investment grade credit ratings, Lanxess explains. Returning to the first-quarter figures, the company reported ‘an encouraging increase in volumes’ in all segments, though this was insufficient to offset the drop in selling prices and negative currency effects, resulting in the 2.5% decline in sales. The improvement in EBITDA preexceptionals was mainly due to positive volume effects in all segments, a lower cost base resulting from the Advance programme and the absence of one-time charges. Earnings were diminished as a result of lower selling prices. The EBITDA margin pre-exceptionals rose to 10.0%, against 8.3% for 1Q 2013. In 1Q 2014, sales in the EMEA region (excluding Germany) were E618 million, nearly level with 1Q 2013, while sales in Germany increased by 3.0% to E381 million. In North America, sales grew by 1.2% to E331 million. However, in both Latin America and the Asia-Pacific region, sales receded, by 11.4% and 6.4% respectively.
10
Additives for Polymers
In the Performance Polymers and Advanced Intermediates segments, sales for 1Q 2014 declined compared to the previous year despite volume growth but EBITDA pre-exceptionals improved somewhat. However, the Performance Chemicals segment grew sales by 5.8% to E550 million, with expanded volumes in all business units. Inorganic pigments and other products used in the construction industry benefited from the good demand attributable to the mild winter in Europe. Compared to 1Q 2013, EBITDA pre-exceptionals for the segment rose by one third this year to E68 million, mainly due to the positive volume development. Looking ahead, Lanxess anticipates that the economic environment will continue to slowly recover during the remainder of the year, with the main impetus expected from the established economic regions. However, the group believes that the challenging competitive environment for its synthetic rubber businesses will continue, with price pressure persisting, and is therefore predicting a continuing subdued development for the Performance Polymers segment in the upcoming quarters. Zachert cautions that ‘the next two to three years won’t be easy’ but remains confident that Lanxess will ‘emerge from the realignment stronger than before’. Contact: Lanxess AG, Cologne, Germany. Tel: +49 221 8885 0, Web: www.lanxess.com
Holland Colours reports increase in annual net profit on par sales
F
or its 2013/2014 financial year (FY) ended 31 March 2014, Dutch masterbatch producer Holland Colours posted sales of E66.0 million, up a marginal 0.1% from E65.9 million the previous year, under ‘persistently challenging’ economic conditions. However, the company’s operating result rose 10% for the year to E 5.4 million while its annual net profit climbed more than 20% to E3.5 million. Looking at the company’s sales performance in more detail, volume growth was about 3% in FY 2013/2014 but this was offset by 2% negative currency effects, largely due to the lower US dollar, while price and mix effects also had a negative effect of nearly 1%. 1H sales decreased almost 1% year on year but sales in the second half were nearly 1% higher. Compared to FY 2012/2013, Holland Colours’ sales in Europe grew by 3% while sales in Americas were on a par
August 2014