Chemical industry weekly news roundup, 11 April
10:47 AM MDT | April 11, 2014 | By LINDSAY FROST
This Week in CW:
Several companies reported first quarter earnings this week as the season begins. Givaudan (Geneva) recorded sales of 1.09 billion Swiss francs ($1.24 billion). The results are down 0.2% in Swiss franc terms compared with figures reported in the first quarter of last year. Leading potash producer Uralkali (Berezniki, Russia) says its 2013 net profit dropped 58%, to $666 million on revenue down 20%, to $2.7 billion. Uralkali's Ebitda declined 31% in 2013, to $1.6 billion. Quarterly figures were not disclosed. A. Schulman reported net income of $7 million for the fiscal quarter ended 28 February, down 41% year-on-year (YOY), but adjusted results topped estimates. Schulman says income from continuing operations excluding certain items was $11.3 million, a 39% improvement over the prior-year quarter.
Paints and coatings makers are feeling increasingly optimistic about business prospects for 2014, as the rebounding construction market drives demand for architectural coatings and raw material costs look stable, attendees and exhibitors said at this year's American Coatings Show (ACS), held this week in Atlanta. Meanwhile, the manufacturing comeback in the US is opening up new opportunities for industrial coatings makers, while the automotive industry is expected to remain robust. Research and development (R&D) in the paints and coatings industry is being driven by a variety of issues, chief among energy efficiency and the development of new substrates in some coatings end markets, say attendees and exhibitors. The continued push for low volatile-organic compound (VOC) paint is another driver for innovation, industry experts say.
Koch Industries and the private equity arm of Goldman Sachs have agreed to acquire printing inks maker Flint Group (Luxembourg) from CVC Capital Partners (London). Flint is the second-largest global producer of printing inks after DIC (Tokyo). Flint revenues for 2013 were €2.2 billion ($2.9 billion). Terms of the sale and expected ownership split between Goldman and Koch were not immediately available. The sale should be completed by the second half of 2014, Flint says. CVC acquired privately held Flint Ink (Ann Arbor, MI) in 2005 and merged it with XSYS Print Solutions (Stuttgart, Germany) to create the Flint Group. CVC formed XSYS in 2004 after acquiring the printing ink operations of BASF and ANI Printing Ink.
Both Petronas Chemicals and PotashCorp named new CEOs this week. Petronas says it has appointed Sazali bin Hamzah as CEO, effective 1 May. Current CEO Abdul Hapiz bin Abdullah will step down from his position on 30 April, at the end of his employment contract with the company, Petronas Chemicals says. PotashCorp says that its board of directors has appointed Jochen Tilk as president and CEO, effective 1 July. Bill Doyle, after 27 years of service, during which PotashCorp grew to become the world’s largest crop nutrient company, will step down as president and CEO but remain employed with the company as a senior adviser through June 2015, PotashCorp says. Tilk comes to PotashCorp after a 30-year career in the mining industry, most recently serving as president and CEO of Inmet Mining (Toronto).
Around the Web:
Faced with ominous scientific warnings on global warming caused by the burning of fossil fuels like coal, oil and natural gas, two energy giants —ExxonMobil and Shell—have sent diametrically opposing signals in recent weeks, according to Mashable. Exxon, for its part, told its shareholders on 30 March that the company does not think that policies to address manmade global warming constitute a risk to the company’s profitability, because global policy makers are not going to enact strict emissions limits before 2040. Instead, the company plans to exploit all of its remaining oil and gas reserves, as well as new discoveries, through 2040. Shell, on the other hand, decided to join more than 70 other companies, including Adidas and Unilever, by signing onto a non-binding document known as the “Trillion Tonne Communiqué.” The communiqué is a project sponsored by the Prince of Wales’s Corporate Leaders Group, which brings together business leaders to address climate change.
Stanford University scientists have found a new, highly efficient way to produce liquid ethanol from carbon monoxide gas. This promising discovery could provide an eco-friendly alternative to conventional ethanol production from corn and other crops, say the scientists, according to Phys.org. The new technique developed by Matthew Kanan, an assistant professor of chemistry at Stanford and Stanford graduate student Christina Li requires no fermentation and, if scaled up, could help address many of the land- and water-use issues surrounding ethanol production today. They discovered the first metal catalyst that can produce appreciable amounts of ethanol from carbon monoxide at room temperature and pressure—a notoriously difficult electrochemical reaction.
InstitutionalInvestor.com has ranked the 10 most and least effective stock buyback programs among the companies in the S&P 500 that bought back at least 4% or $1 billion of their shares from 31 December 2011-31 December 2013, according to their return on investment. As calculated by Fortuna Advisors, buyback return on investment measures the overall rate of return of these companies’ buybacks, based on the internal rate of return of the cash flows associated with them. Buyback strategy tracks the performance of the underlying stock in terms of annualized total shareholder return. Once Fortuna determines buyback return on investment and buyback strategy, buyback effectiveness can then be calculated as simply the difference between the two, determined as compounded return.