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Unilever returns to profitability in 4Q 2005
F O C U S volume of deals made dropped around 14% to 73. A strong M & A market had been forecast for 2006, but already public companies are causing a record level of movements. The rate may continue, with completed deals forecast to be at 7080 and total value in the $30 bn range. However, the amount of M & A may be bigger for some bankers. In the first six weeks of 2006, around $24.6 bn in chemical deals have already been revealed. This includes BASF’s acquisition of Degussa’s construction chemicals business, Linde’s planned acquisition of BOC and Texas Petrochemical’s acquisition of Huntsman’s butadiene and methyl tert-butyl ether business. Major deals expected to complete in the coming 12 months include the sale of Sasol’s Condea olefins and surfactants business and ICI’s plan to sell its Uniquema oleochemicals and surfactants unit. Aside from US and European buyers, a new group of buyers is appearing in the chemical industry made up of Asian, Indian and Middle Eastern companies. Most Indian companies are targeting fine chemical firms while Chinese buyers are mostly looking for animal nutrition and petrochemical manufacturers. Chemical Week, 15 Mar 2006, (Website: http://www.chemweek.com)
Niche uses help lift demand Speciality surfactants demand in the USA is projected to climb 3.1%/y, to 1.9 bn lbs worth $3.4 bn in 2009, according to a report from The Freedonia Group (Specialty Surfactants; Study no 2032). The rate is lower than the 5.5%/y registered in 1999-2004, due to the maturity of cleaning and personal care product markets. The most rapid gains will be seen in personal care products. The most sluggish growth is likely to be seen in cleaning products. High demand for surfactants for industrial applications, including food and beverages, paints and coatings, and plastics will compensate for the low demand from the textiles and agricultural markets. Cationic surfactants will expand 4%/y to $1.16 bn driven by growth in the personal care market. Nonionics demand will increase 3.5%/y to $750 M, while that 6
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of anionics will rise 4.4%/y to $755 M. Silicone demand will climb 3.8%/y, to $410 M. Chemical Week, 29 Mar 2006 (Website: http://www.chemweek.com) & ICIS Chemical Business, 13 Mar 2006 (Website: http://www.icischemicalbusiness.com)
SRMs in cosmetics and toiletries on the rise in China Demand for speciality raw materials (SRMs) used in China in cosmetics and toiletries is growing at 10%/y and is put at $270 M. Conditioning polymers account for 30% of the market, rheology modifiers and antimicrobials 20% each, and speciality surfactants and emollients 10% each. Use of SRMs in China’s C&T sector is put at 40,000 tons. Chemical Market Reporter, 20 Mar 2006 (Website: http://www.chemicalmarketreporter.com)
Recovery in French chemical industry in 2005 The French chemical industry showed encouraging signs of a recovery in 2005. Overall production volume increased by 3.2% (+3% excluding pharmaceuticals). The soap, perfume and household product sector improved most (+7.8% after a contraction of 2.5% in 2004). Organic chemicals had a 4.7% rise in production (+6.6% in 1Q 2005, -3% in 2Q 2005). Speciality chemical production fell by 2.4% and the inorganic chemical sector by 3.7% in 2005. Exports (chemicals + pharmaceuticals) were up by 5.3% to €58.4 bn. Imports were up by 7.8% to €48.3 bn. Investments rose by 8.7% to €3.2 bn. Chimie Pharma Hebdo, 27 Mar 2006, (334), 15-16 (in French)
German chemical industry: exports catalyse solid growth The German chemical industry had sales up 7% in 2005 at €152 bn. Domestic sales were up 6% at €70.5 bn, and foreign sales up 8% at €81.5 bn. Exports were up 7.5% at €103.7 bn and imports 10% at €73.2 bn. Production of detergents and toiletries was up 3.5%. Chemische Rundschau, 21 Mar 2006, (3), 20 (in German)
COMPANY RESULTS Unilever returns to profitability in 4Q 2005 Anglo-Dutch consumer-products giant Unilever reported one of its strongest quarters of the past few years in 4Q 2005, with acceleration in sales growth and a return to profitability. The 4Q pre-tax profit was €916 M compared to a pre-tax loss of €398 M in the year-ago quarter, which was hurt by a write-off of SlimFast assets and a provision for Brazilian sales tax. Net profit from continuing operations was €726 M in 4Q 2005 compared to a loss of €124 M in 4Q 2004. All three of its regions – Europe, the Americas and Asia/Africa – sported operating profits during the quarter, and revenues rose 3% to €10.08 bn. For the year as a whole, turnover was €39.67 bn; underlying sales rose 3.1%, helped by an additional €500 M in advertising and promotions. Net profit from continuing operations was up 21% to €3.50 bn from €2.89 bn in 2004. According to chief executive Patrick Cescau, Unilever successfully stabilized its market shares and improved growth through the year. The organization has been simplified and refocused, with savings programmes ‘delivering well’ he says. ‘We have seen a return to strong growth in personal care and in developing and emerging markets. Performance in Europe improved compared with last year. There was some pick up in the fourth quarter, but there is still work to do to return Europe to full competitiveness and growth,’ says Cescau. Central and Eastern Europe performed well, notably in Russia which was ahead by nearly 20% compared to 2004. In Western Europe, weak consumer demand continued: business grew in the Netherlands and Spain, but declined by around 2% in France and Germany and by nearly 4% in the UK. The company reported a disappointing year for its Home and Personal Care sector in Europe, losing market share particularly in the UK. In the Americas, underlying sales grew by 4% for the year. Consumer demand in the US showed a sustained recovery, with sales there up 3.2% and a gain in MAY 2006
F O C U S market share. New launches in the US included Dove ‘Cool Moisture’ range and ‘All Small and Mighty’ laundry detergent. In Brazil and Mexico, a strong first half was followed by relatively weaker demand in the second half of the year. In the Asia/ Africa region, underlying sales grew by 9% in 2005 in a competitive environment. The growth, mainly from volume, was broad-based in terms of both categories and geographies, with a strong recovery in India, and significant contributions from China, which was up by over 20%, and from South East Asia, Turkey and Arabia. Japan returned to growth while Australia improved in the second half of the year. Unilever sold its fragrances business in 2005 and is now planning to sell most of its European frozenfoods business. The company says it enters 2006 in much better shape, with increased competitiveness and growth. Unilever expects to improve its 2005 operating margin of 13.4% in 2006 and reiterated that it expects €700 M in cost savings from the ‘One Unilever’ programme this year and another €300 M in 2007. Press release from: Unilever plc, PO Box 68, Unilever House, Blackfriars, London, EC4P 4BQ, UK. Tel: +44 20 7822 5252. Fax: +44 20 7822 5951. Website: http://www.unilever.com (9 Feb 2006)
COMPANY NEWS Sasol aims to finalize the sale of its Olefins and Surfactants division The S African group Sasol aims to finalize the sale of its olefins and surfactants division in Sep 2006. The Rand 18 bn/y ($2.9 bn/y) former Condea business has attracted more than 40 potential buyers, of which 20 have their own activities in these fields. Final bids are scheduled in Jul 2006. Sasol’s plan to sell the O and S division and its Safol detergent alcohols facility in South Africa was announced in Aug 2005 [Focus on Surfactants, Oct 2005]. The division came out of the red in Jul-Dec 2005, with Rand 290 M operating profit (Rand 136 M loss in Jul-Dec 2004). For the business as a whole, Sasol Ltd reported earnings of Rand 7.3 bn for the first half of its 2005-2006 fiscal MAY 2006
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year ended Dec 2005, up from Rand 3.9 bn in 1H ended Dec 2004. Turnover was Rand 40.256 bn for 1H 2005-2006 (Rand 33.806 bn in 1H 2004-2005). Chimie Pharma Hebdo, 13 Mar 2006, (333), 11 (in French), Chemical Week, 22 Mar 2006, (Website: http://www.chemweek.com) & Sasol Ltd 1H 20052006 results, 6 Mar 2006, (Sasol Ltd, 1 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa Tel: +27 11 441 3218. Fax: +27 11 441 3189. Website: http://www.sasol.com)
Focused on growth: Akzo Nobel Chemicals Akzo Nobel’s Chemicals business is making solid progress following 2005’s strategic realignment. By Feb 2005, five strategic growth platforms had been identified while 14 businesses (which had combined sales of €700 M in 2004) were disentangled and placed in a specially created divestment unit by Apr 2005. Around half of these businesses have now either been sold or agreements have been signed, with the company aiming to divest the remainder during 1H 2006. The biggest divestment in terms of financial impact with be that of the Flexsys joint venture with Solutia, and while no deal has been finalized yet, it should be closed within 1H 2006. The main focus now switches to accelerating the growth plans for each of the five strategic platforms which were identified as a result of the portfolio review: Pulp and Paper Chemicals, Surfactants, Polymer Chemicals, Base Chemicals and Functional Chemicals. The company has fairly aggressive growth plans in place for each of the five platforms. The emerging markets, Asia in particular, will be one of the key areas where it will be looking to invest. It has a foothold in China in some businesses but is in the process of reviewing the possibility of making step moves into the region in other activities, notably within Functional Chemicals. In 2005, three investments were initiated in Sweden and two in China which, when added to an ongoing expansion programme in the Netherlands and the newly opened Pulp and Paper facility serving the Veracel mill in Brazil, adds up to a total investment of around €300 M. Press release from: Akzo Nobel nv, PO Box 9300, 6800 SB Arnhem, The Netherlands. Tel: +31 26 366 5760. Fax: +31 26 366 5850. Website: http://www.akzonobel.com) (10 Mar 2006)
Tomah3 names DoveChemCentral Distribution as new distributor US-based company Tomah3 has contracted DoveChemCentral Distribution to distribute its cationic, nonionic and amphoteric surfactants in its markets in Taiwan, the Philippines, Japan, South Korea and Vietnam. DoveChemCentral Distribution will also serve Tomah3’s customers in Thailand, Singapore, Indonesia, Malaysia and China. Tomah3’s product offerings include Tomadol alcohol ethoxylates, amine oxides, amphoterics, personal care products, thickeners and tomadynes. These products have applications in agriculture, chemical compoundingreactive intermediates, coatings, household and cleaning compounds, among others. DoveChemCentral Distribution is a jv between Dovechem Holdings and CHEMCENTRAL. Chemical Business (India), Feb 2006, 20 (2), 83
ChemChina looks overseas China National Chemical Corp (ChemChina) has established its position as one of China’s key chemical industry players. The diverse corporation was formed in 2004 as a result of the amalgamation of state-owned chemical firms China National BlueStar Corp and China National Haohua Chemical Corp. ChemChina’s business activities include oil refining, petrochemical production, and manufacture of various chemicals such as agchems, water treatment chemicals, and chemicals for the country’s defence sector, as well as industrial cleaning and detergents. The company posts sales of over RMB Yuan 61 bn/y ($7.6 bn), with assets valued at approximately RMB Yuan 75 bn and employees totalling about 150,000. ChemChina aims to grow its annual sales and asset value to RMB Yuan 100 bn within 3-5 years. A core element in the company’s plans is to form 10 industrial bases and 30 regional entities throughout China that will specialize in distinct product types. ChemChina’s growth plan involves acquisition of interests and assets, and construction of facilities in China and overseas. Chemical Week, 15 Mar 2006, (Website: http://www.chemweek.com)
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Niche uses help lift demand Speciality surfactants demand in the USA is projected to climb 3.1%/y, to 1.9 bn lbs worth $3.4 bn in 2009, according to a report from The Freedonia Group (Specialty Surfactants; Study no 2032). The rate is lower than the 5.5%/y registered in 1999-2004, due to the maturity of cleaning and personal care product markets. The most rapid gains will be seen in personal care products. The most sluggish growth is likely to be seen in cleaning products. High demand for surfactants for industrial applications, including food and beverages, paints and coatings, and plastics will compensate for the low demand from the textiles and agricultural markets. Cationic surfactants will expand 4%/y to $1.16 bn driven by growth in the personal care market. Nonionics demand will increase 3.5%/y to $750 M, while that 6
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of anionics will rise 4.4%/y to $755 M. Silicone demand will climb 3.8%/y, to $410 M. Chemical Week, 29 Mar 2006 (Website: http://www.chemweek.com) & ICIS Chemical Business, 13 Mar 2006 (Website: http://www.icischemicalbusiness.com)
SRMs in cosmetics and toiletries on the rise in China Demand for speciality raw materials (SRMs) used in China in cosmetics and toiletries is growing at 10%/y and is put at $270 M. Conditioning polymers account for 30% of the market, rheology modifiers and antimicrobials 20% each, and speciality surfactants and emollients 10% each. Use of SRMs in China’s C&T sector is put at 40,000 tons. Chemical Market Reporter, 20 Mar 2006 (Website: http://www.chemicalmarketreporter.com)
Recovery in French chemical industry in 2005 The French chemical industry showed encouraging signs of a recovery in 2005. Overall production volume increased by 3.2% (+3% excluding pharmaceuticals). The soap, perfume and household product sector improved most (+7.8% after a contraction of 2.5% in 2004). Organic chemicals had a 4.7% rise in production (+6.6% in 1Q 2005, -3% in 2Q 2005). Speciality chemical production fell by 2.4% and the inorganic chemical sector by 3.7% in 2005. Exports (chemicals + pharmaceuticals) were up by 5.3% to €58.4 bn. Imports were up by 7.8% to €48.3 bn. Investments rose by 8.7% to €3.2 bn. Chimie Pharma Hebdo, 27 Mar 2006, (334), 15-16 (in French)
German chemical industry: exports catalyse solid growth The German chemical industry had sales up 7% in 2005 at €152 bn. Domestic sales were up 6% at €70.5 bn, and foreign sales up 8% at €81.5 bn. Exports were up 7.5% at €103.7 bn and imports 10% at €73.2 bn. Production of detergents and toiletries was up 3.5%. Chemische Rundschau, 21 Mar 2006, (3), 20 (in German)
COMPANY RESULTS Unilever returns to profitability in 4Q 2005 Anglo-Dutch consumer-products giant Unilever reported one of its strongest quarters of the past few years in 4Q 2005, with acceleration in sales growth and a return to profitability. The 4Q pre-tax profit was €916 M compared to a pre-tax loss of €398 M in the year-ago quarter, which was hurt by a write-off of SlimFast assets and a provision for Brazilian sales tax. Net profit from continuing operations was €726 M in 4Q 2005 compared to a loss of €124 M in 4Q 2004. All three of its regions – Europe, the Americas and Asia/Africa – sported operating profits during the quarter, and revenues rose 3% to €10.08 bn. For the year as a whole, turnover was €39.67 bn; underlying sales rose 3.1%, helped by an additional €500 M in advertising and promotions. Net profit from continuing operations was up 21% to €3.50 bn from €2.89 bn in 2004. According to chief executive Patrick Cescau, Unilever successfully stabilized its market shares and improved growth through the year. The organization has been simplified and refocused, with savings programmes ‘delivering well’ he says. ‘We have seen a return to strong growth in personal care and in developing and emerging markets. Performance in Europe improved compared with last year. There was some pick up in the fourth quarter, but there is still work to do to return Europe to full competitiveness and growth,’ says Cescau. Central and Eastern Europe performed well, notably in Russia which was ahead by nearly 20% compared to 2004. In Western Europe, weak consumer demand continued: business grew in the Netherlands and Spain, but declined by around 2% in France and Germany and by nearly 4% in the UK. The company reported a disappointing year for its Home and Personal Care sector in Europe, losing market share particularly in the UK. In the Americas, underlying sales grew by 4% for the year. Consumer demand in the US showed a sustained recovery, with sales there up 3.2% and a gain in MAY 2006
F O C U S market share. New launches in the US included Dove ‘Cool Moisture’ range and ‘All Small and Mighty’ laundry detergent. In Brazil and Mexico, a strong first half was followed by relatively weaker demand in the second half of the year. In the Asia/ Africa region, underlying sales grew by 9% in 2005 in a competitive environment. The growth, mainly from volume, was broad-based in terms of both categories and geographies, with a strong recovery in India, and significant contributions from China, which was up by over 20%, and from South East Asia, Turkey and Arabia. Japan returned to growth while Australia improved in the second half of the year. Unilever sold its fragrances business in 2005 and is now planning to sell most of its European frozenfoods business. The company says it enters 2006 in much better shape, with increased competitiveness and growth. Unilever expects to improve its 2005 operating margin of 13.4% in 2006 and reiterated that it expects €700 M in cost savings from the ‘One Unilever’ programme this year and another €300 M in 2007. Press release from: Unilever plc, PO Box 68, Unilever House, Blackfriars, London, EC4P 4BQ, UK. Tel: +44 20 7822 5252. Fax: +44 20 7822 5951. Website: http://www.unilever.com (9 Feb 2006)
COMPANY NEWS Sasol aims to finalize the sale of its Olefins and Surfactants division The S African group Sasol aims to finalize the sale of its olefins and surfactants division in Sep 2006. The Rand 18 bn/y ($2.9 bn/y) former Condea business has attracted more than 40 potential buyers, of which 20 have their own activities in these fields. Final bids are scheduled in Jul 2006. Sasol’s plan to sell the O and S division and its Safol detergent alcohols facility in South Africa was announced in Aug 2005 [Focus on Surfactants, Oct 2005]. The division came out of the red in Jul-Dec 2005, with Rand 290 M operating profit (Rand 136 M loss in Jul-Dec 2004). For the business as a whole, Sasol Ltd reported earnings of Rand 7.3 bn for the first half of its 2005-2006 fiscal MAY 2006
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year ended Dec 2005, up from Rand 3.9 bn in 1H ended Dec 2004. Turnover was Rand 40.256 bn for 1H 2005-2006 (Rand 33.806 bn in 1H 2004-2005). Chimie Pharma Hebdo, 13 Mar 2006, (333), 11 (in French), Chemical Week, 22 Mar 2006, (Website: http://www.chemweek.com) & Sasol Ltd 1H 20052006 results, 6 Mar 2006, (Sasol Ltd, 1 Sturdee Avenue, Rosebank, Johannesburg 2196, South Africa Tel: +27 11 441 3218. Fax: +27 11 441 3189. Website: http://www.sasol.com)
Focused on growth: Akzo Nobel Chemicals Akzo Nobel’s Chemicals business is making solid progress following 2005’s strategic realignment. By Feb 2005, five strategic growth platforms had been identified while 14 businesses (which had combined sales of €700 M in 2004) were disentangled and placed in a specially created divestment unit by Apr 2005. Around half of these businesses have now either been sold or agreements have been signed, with the company aiming to divest the remainder during 1H 2006. The biggest divestment in terms of financial impact with be that of the Flexsys joint venture with Solutia, and while no deal has been finalized yet, it should be closed within 1H 2006. The main focus now switches to accelerating the growth plans for each of the five strategic platforms which were identified as a result of the portfolio review: Pulp and Paper Chemicals, Surfactants, Polymer Chemicals, Base Chemicals and Functional Chemicals. The company has fairly aggressive growth plans in place for each of the five platforms. The emerging markets, Asia in particular, will be one of the key areas where it will be looking to invest. It has a foothold in China in some businesses but is in the process of reviewing the possibility of making step moves into the region in other activities, notably within Functional Chemicals. In 2005, three investments were initiated in Sweden and two in China which, when added to an ongoing expansion programme in the Netherlands and the newly opened Pulp and Paper facility serving the Veracel mill in Brazil, adds up to a total investment of around €300 M. Press release from: Akzo Nobel nv, PO Box 9300, 6800 SB Arnhem, The Netherlands. Tel: +31 26 366 5760. Fax: +31 26 366 5850. Website: http://www.akzonobel.com) (10 Mar 2006)
Tomah3 names DoveChemCentral Distribution as new distributor US-based company Tomah3 has contracted DoveChemCentral Distribution to distribute its cationic, nonionic and amphoteric surfactants in its markets in Taiwan, the Philippines, Japan, South Korea and Vietnam. DoveChemCentral Distribution will also serve Tomah3’s customers in Thailand, Singapore, Indonesia, Malaysia and China. Tomah3’s product offerings include Tomadol alcohol ethoxylates, amine oxides, amphoterics, personal care products, thickeners and tomadynes. These products have applications in agriculture, chemical compoundingreactive intermediates, coatings, household and cleaning compounds, among others. DoveChemCentral Distribution is a jv between Dovechem Holdings and CHEMCENTRAL. Chemical Business (India), Feb 2006, 20 (2), 83
ChemChina looks overseas China National Chemical Corp (ChemChina) has established its position as one of China’s key chemical industry players. The diverse corporation was formed in 2004 as a result of the amalgamation of state-owned chemical firms China National BlueStar Corp and China National Haohua Chemical Corp. ChemChina’s business activities include oil refining, petrochemical production, and manufacture of various chemicals such as agchems, water treatment chemicals, and chemicals for the country’s defence sector, as well as industrial cleaning and detergents. The company posts sales of over RMB Yuan 61 bn/y ($7.6 bn), with assets valued at approximately RMB Yuan 75 bn and employees totalling about 150,000. ChemChina aims to grow its annual sales and asset value to RMB Yuan 100 bn within 3-5 years. A core element in the company’s plans is to form 10 industrial bases and 30 regional entities throughout China that will specialize in distinct product types. ChemChina’s growth plan involves acquisition of interests and assets, and construction of facilities in China and overseas. Chemical Week, 15 Mar 2006, (Website: http://www.chemweek.com)
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