Obbligazioni societarie Monitor bond Chimica Europa
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lorenzo63
Age quod Agis
BASF Announces Deep Restructuring of Former Ciba Assets
BASF announces 3,700 job cuts, mainly at Ciba unit
The German chemical giant BASF announced on Monday 3,700 job cuts by 2013 under a deep restructuring plan that follows its takeover of the Swiss group Ciba
The restructuring plans include a reduction of approximately 3,700 positions by 2013, most of which will be eliminated by the end of 2010," a BASF statement said.
Of the cuts announced on Monday, 500 were planned at BASF and 3,200 at Ciba, more than one fourth of its workforce, a BASF spokesman told AFP.
Ciba employs 12,500 people worldwide, according to its Internet site, while BASF staff totalled around 97,000 at the end of 2008.
The chemicals sector has been hit hard by the global economic downturn, and BASF warned in late April of painful choices to come.
The German group was mulling the reorganisation, sale or closure of 23 of Ciba's 55 former production sites, and planned to make a decision by early 2010, it said.
"In certain areas, Ciba can be better organised," the spokesman added.
BASF, which acquired Ciba in April for 3.8 billion euros (5.3 billion dollars), hopes to save 300 million euros by the end of next year and has estimated the benefits of the acquisition at around 400 million euros a year starting in 2012.
It put the cost of integrating Ciba into its operations at 550 million euros, of which 150 million would be booked this year.
In April, BASF said it would get rid of at least 2,000 posts by the end of the year.
Several activities were to be maintained around Ciba's base in Basel however, including BASF's new paper chemicals division and a research centre, the statement said.
A strategy for Ciba's water treatment business would be developed by next year, it added.
Chairman Juergen Hambrecht said the combined BASF and Ciba businesses "can be successful in the long term only if we optimise them and exploit the full potential for synergies."
Talks with workers' representatives were underway, and Hambrecht pledged to make job cuts "in a fair and transparent way."
BASF is a global leader in the chemical sector, including plastics and agricultural products, and is also active in the exploration and sale of oil and gas.
BASF shares added 0.18 percent to 27.71 euros in afternoon trading in Frankfurt, while the DAX index of German blue-chips was 1.38 percent lower overall.
"It was not a huge surprise," Merck Finck analyst Carsten Kunold told Dow Jones Newswires. He added that the integration costs were roughly in line with estimates.
BASF has already set about restructuring its own units, and said in late June that it would shut down a plastics plant in southern Germany because of weak demand.
The resulting decrease of about 15 percent in polystyrene output capacity was not expected to lead to job cuts, however.
Around 4,800 BASF workers have also been affected by technical layoffs, including nearly 4,000 in Germany, a BASF spokeswoman said.
BASF announces 3,700 job cuts, mainly at Ciba unit
The German chemical giant BASF announced on Monday 3,700 job cuts by 2013 under a deep restructuring plan that follows its takeover of the Swiss group Ciba
The restructuring plans include a reduction of approximately 3,700 positions by 2013, most of which will be eliminated by the end of 2010," a BASF statement said.
Of the cuts announced on Monday, 500 were planned at BASF and 3,200 at Ciba, more than one fourth of its workforce, a BASF spokesman told AFP.
Ciba employs 12,500 people worldwide, according to its Internet site, while BASF staff totalled around 97,000 at the end of 2008.
The chemicals sector has been hit hard by the global economic downturn, and BASF warned in late April of painful choices to come.
The German group was mulling the reorganisation, sale or closure of 23 of Ciba's 55 former production sites, and planned to make a decision by early 2010, it said.
"In certain areas, Ciba can be better organised," the spokesman added.
BASF, which acquired Ciba in April for 3.8 billion euros (5.3 billion dollars), hopes to save 300 million euros by the end of next year and has estimated the benefits of the acquisition at around 400 million euros a year starting in 2012.
It put the cost of integrating Ciba into its operations at 550 million euros, of which 150 million would be booked this year.
In April, BASF said it would get rid of at least 2,000 posts by the end of the year.
Several activities were to be maintained around Ciba's base in Basel however, including BASF's new paper chemicals division and a research centre, the statement said.
A strategy for Ciba's water treatment business would be developed by next year, it added.
Chairman Juergen Hambrecht said the combined BASF and Ciba businesses "can be successful in the long term only if we optimise them and exploit the full potential for synergies."
Talks with workers' representatives were underway, and Hambrecht pledged to make job cuts "in a fair and transparent way."
BASF is a global leader in the chemical sector, including plastics and agricultural products, and is also active in the exploration and sale of oil and gas.
BASF shares added 0.18 percent to 27.71 euros in afternoon trading in Frankfurt, while the DAX index of German blue-chips was 1.38 percent lower overall.
"It was not a huge surprise," Merck Finck analyst Carsten Kunold told Dow Jones Newswires. He added that the integration costs were roughly in line with estimates.
BASF has already set about restructuring its own units, and said in late June that it would shut down a plastics plant in southern Germany because of weak demand.
The resulting decrease of about 15 percent in polystyrene output capacity was not expected to lead to job cuts, however.
Around 4,800 BASF workers have also been affected by technical layoffs, including nearly 4,000 in Germany, a BASF spokeswoman said.
lorenzo63
Age quod Agis
BASF: Chinese Govt Approves Expansion Of Nanjing JV Site
FRANKFURT (Dow Jones)--German chemical company BASF SE (BAS.XE) said Tuesday Chinese authorities have approved the expansion of its Nanjing joint venture chemical site, with joint investment of $1.4 billion.
The Chinese central government has approved the Joint Feasibility Study Report submitted by BASF and SINOPEC for the expansion of their joint venture, BASF-YPC Co., Ltd. (BYC), in Nanjing, China, as of July 1, 2009. BASF and Sinopec will jointly invest approximately $1.4 billion in state-of-the-art technologies to produce downstream specialty chemicals for the Chinese market, serving multiple industries such as construction, electronics, pharmaceutical, automotive and chemical manufacturing.
The investment, which includes the expansion of the existing steam cracker, the construction of 10 new chemical plants, and the expansion of three existing plants, will strengthen the market competitiveness of the joint venture by broadening the product scope and further leveraging the advantages of the integration.
FRANKFURT (Dow Jones)--German chemical company BASF SE (BAS.XE) said Tuesday Chinese authorities have approved the expansion of its Nanjing joint venture chemical site, with joint investment of $1.4 billion.
The Chinese central government has approved the Joint Feasibility Study Report submitted by BASF and SINOPEC for the expansion of their joint venture, BASF-YPC Co., Ltd. (BYC), in Nanjing, China, as of July 1, 2009. BASF and Sinopec will jointly invest approximately $1.4 billion in state-of-the-art technologies to produce downstream specialty chemicals for the Chinese market, serving multiple industries such as construction, electronics, pharmaceutical, automotive and chemical manufacturing.
The investment, which includes the expansion of the existing steam cracker, the construction of 10 new chemical plants, and the expansion of three existing plants, will strengthen the market competitiveness of the joint venture by broadening the product scope and further leveraging the advantages of the integration.
lorenzo63
Age quod Agis
Dsm
Lonza, DSM Reinforce Partnership For Nutritional Products
ZURICH (Dow Jones)--Lonza Holding AG (LONN.VX) said Monday it has strengthened an existing collaboration pact with Dutch DSM MV (DSM.AE), without disclosing financial details.
DSM Nutritional Products Ltd and Lonza Ltd announce the early renewal and extension of their long-time collaboration in the production facilities in Visp and Lalden, Wallis, Switzerland. Lonza has for decades been a critical supplier for the services and raw materials for the vitamins, carotenoids, and aroma chemicals produced by DSM Nutritional Products. Within the framework of this new contract, the parties are reviewing the organizational setup for the 147 Lonza employees working at the Lalden site of DSM Nutritional Products.
In today's environment it becomes of increasing importance to intensify partnerships in order to be able to innovate, deliver the highest quality, and secure future growth at competitive conditions. All these elements are intrinsically part of the partnership between Lonza and DSM Nutritional Products.
We are very pleased to continue our partnership with DSM. The common utilization of the infrastructure is benefiting both partners. The extended partnership is also a promising commitment to the production sites of Visp and Lalden, showing that they are able to deliver high quality products at competitive costs", comments Lonza Chief Executive Stefan Borgas.
We have many interests in common here in Visp and Lalden and the collaboration between Lonza and DSM is very close. We are excited about the extension of the existing partnership by many years", adds Leendert Staal, President and CEO of DSM Nutritional Products.
The collaboration between the companies dates back to 1965, when the predecessor company Teranol AG was founded to produce vitamin A and E. As Lonza commissioned at that same time its cracker, which could supply the necessary raw materials acetylene and hydrogen, the decision was made to locate the new Teranol production site in Lalden next to existing Lonza infrastructure.
Lonza, DSM Reinforce Partnership For Nutritional Products
ZURICH (Dow Jones)--Lonza Holding AG (LONN.VX) said Monday it has strengthened an existing collaboration pact with Dutch DSM MV (DSM.AE), without disclosing financial details.
DSM Nutritional Products Ltd and Lonza Ltd announce the early renewal and extension of their long-time collaboration in the production facilities in Visp and Lalden, Wallis, Switzerland. Lonza has for decades been a critical supplier for the services and raw materials for the vitamins, carotenoids, and aroma chemicals produced by DSM Nutritional Products. Within the framework of this new contract, the parties are reviewing the organizational setup for the 147 Lonza employees working at the Lalden site of DSM Nutritional Products.
In today's environment it becomes of increasing importance to intensify partnerships in order to be able to innovate, deliver the highest quality, and secure future growth at competitive conditions. All these elements are intrinsically part of the partnership between Lonza and DSM Nutritional Products.
We are very pleased to continue our partnership with DSM. The common utilization of the infrastructure is benefiting both partners. The extended partnership is also a promising commitment to the production sites of Visp and Lalden, showing that they are able to deliver high quality products at competitive costs", comments Lonza Chief Executive Stefan Borgas.
We have many interests in common here in Visp and Lalden and the collaboration between Lonza and DSM is very close. We are excited about the extension of the existing partnership by many years", adds Leendert Staal, President and CEO of DSM Nutritional Products.
The collaboration between the companies dates back to 1965, when the predecessor company Teranol AG was founded to produce vitamin A and E. As Lonza commissioned at that same time its cracker, which could supply the necessary raw materials acetylene and hydrogen, the decision was made to locate the new Teranol production site in Lalden next to existing Lonza infrastructure.
lorenzo63
Age quod Agis
Chemical Makers Poised to Gain In New Cap-and-Trade System .
With legislation pending in Congress that could put a price on greenhouse-gas emissions, the energy-gulping chemical industry is trying to position itself to emerge as an unlikely winner.
Chemical makers are one of the biggest energy users among manufacturers, expelling about 5% of U.S. carbon dioxide emissions, according to government data. They face heavy costs under a proposed system to cap emissions that would require the industry to purchase permits to pollute.
But a so-called cap-and-trade system would also boost demand for some chemical companies' products, from insulation to solar-panel components, because those products would help others cut back on the energy use.
"This is really our sweet spot," said Calvin Dooley, chief executive of the American Chemistry Council, an industry trade group.
The fate of the climate-change bill is still undecided -- after approval from a key congressional panel last month, it is expected to come up for a vote by the House later this summer -- but the current version proposed by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.) will increase costs for many companies and potentially force some to go overseas, said Mr. Dooley.
The chemical industry provides virtually all basic materials for other manufacturers, many of which would be forced to cut emissions or buy pollution permits under cap-and-trade.
Success for a chemical company in a cap-and-trade system could boil down to the energy-saving value of the products it sells -- not just how much energy it consumes.
To be sure, some companies may have trouble finding that balance, said Michael Arne, assistant director at SRI Consulting, a research firm that calculates CO2 emissions from chemical processes. A potential carbon tax "could significantly erode the margins," of companies that use very energy-intensive processes, he warned.
Chemical companies sell a variety of energy-saving materials, including industrial gases used as an insulator between glass panes in energy-efficient windows, foams used in the blades of electricity-generating windmills, and light-weight plastics used in car parts that help vehicles consume less energy.
Some chemical companies report that demand for their energy-saving products is strong already, even in the midst of the economic recession.
DuPont Co. expects that by 2015 its sales from renewable materials that displace fossil fuels will nearly double to $8 billion. That could include sales of ethanol made from corn cobs and switchgrass that the company is developing in a joint venture with food-ingredient company Danisco AS.
German chemical maker BASF SE sees big business opportunities in the weatherproofing of residential homes, which typically contain an average $17,000 worth of chemical products, according to the chemistry council. There's room to raise that to up to $30,000 per house, says BASF. Among its weatherizing products: tiny wax-filled capsules that can be embedded in plaster, wall board and insulation. The wax absorbs heat when it melts and releases it when it solidifies.
Other chemical companies are installing projects that will lower their own energy bill and potentially generate pollution credits to help offset their emissions. Dow Chemical Co., for example, uses methane from a landfill to power a plant in Dalton, Ga., where it makes carpet backing.
"Whether your inspiration is cap-and-trade or the prospect of $140-a-barrel oil, you need to be strategically involved in this space," said Rich Wells, vice president of energy for Dow
With legislation pending in Congress that could put a price on greenhouse-gas emissions, the energy-gulping chemical industry is trying to position itself to emerge as an unlikely winner.
Chemical makers are one of the biggest energy users among manufacturers, expelling about 5% of U.S. carbon dioxide emissions, according to government data. They face heavy costs under a proposed system to cap emissions that would require the industry to purchase permits to pollute.
But a so-called cap-and-trade system would also boost demand for some chemical companies' products, from insulation to solar-panel components, because those products would help others cut back on the energy use.
"This is really our sweet spot," said Calvin Dooley, chief executive of the American Chemistry Council, an industry trade group.
The fate of the climate-change bill is still undecided -- after approval from a key congressional panel last month, it is expected to come up for a vote by the House later this summer -- but the current version proposed by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.) will increase costs for many companies and potentially force some to go overseas, said Mr. Dooley.
The chemical industry provides virtually all basic materials for other manufacturers, many of which would be forced to cut emissions or buy pollution permits under cap-and-trade.
Success for a chemical company in a cap-and-trade system could boil down to the energy-saving value of the products it sells -- not just how much energy it consumes.
To be sure, some companies may have trouble finding that balance, said Michael Arne, assistant director at SRI Consulting, a research firm that calculates CO2 emissions from chemical processes. A potential carbon tax "could significantly erode the margins," of companies that use very energy-intensive processes, he warned.
Chemical companies sell a variety of energy-saving materials, including industrial gases used as an insulator between glass panes in energy-efficient windows, foams used in the blades of electricity-generating windmills, and light-weight plastics used in car parts that help vehicles consume less energy.
Some chemical companies report that demand for their energy-saving products is strong already, even in the midst of the economic recession.
DuPont Co. expects that by 2015 its sales from renewable materials that displace fossil fuels will nearly double to $8 billion. That could include sales of ethanol made from corn cobs and switchgrass that the company is developing in a joint venture with food-ingredient company Danisco AS.
German chemical maker BASF SE sees big business opportunities in the weatherproofing of residential homes, which typically contain an average $17,000 worth of chemical products, according to the chemistry council. There's room to raise that to up to $30,000 per house, says BASF. Among its weatherizing products: tiny wax-filled capsules that can be embedded in plaster, wall board and insulation. The wax absorbs heat when it melts and releases it when it solidifies.
Other chemical companies are installing projects that will lower their own energy bill and potentially generate pollution credits to help offset their emissions. Dow Chemical Co., for example, uses methane from a landfill to power a plant in Dalton, Ga., where it makes carpet backing.
"Whether your inspiration is cap-and-trade or the prospect of $140-a-barrel oil, you need to be strategically involved in this space," said Rich Wells, vice president of energy for Dow
lorenzo63
Age quod Agis
LANXESS Underpins BRIC Strategy With Two Acquisitions In Asia
PRESS RELEASE: LANXESS Underpins BRIC Strategy With Two Acquisitions In Asia
Leverkusen/Mumbai/Shanghai - Specialty chemicals group LANXESS AG is
underpinning its long-term growth strategy in the BRIC countries with two
acquisitions in Asia.
LANXESS subsidiary LANXESS India Private Ltd. will acquire the chemical
businesses and assets of stock market listed Indian company Gwalior
Chemical Industries Ltd. for EUR 82.4 million, including debt.
A corresponding agreement was reached with the company. The transaction is
subject to formal approval by Gwalior's shareholders and clearance by the
relevant antitrust authorities. Closing is expected at the end of the third
quarter of 2009.
LANXESS will also acquire the business and production assets of
Chinese-based Jiangsu Polyols Chemical Co. Ltd. Both parties have agreed
not to disclose the purchase price. Closing of this transaction is expected
in the third quarter of 2009. The medium-sized company, which was founded
in 2006, is located in Liyang, west of Shanghai.
Founded in 1978, the Gwalior's company's headquarter is based in Mumbai and
employs about 400 permanent staff. In the first nine months of its business
year 2008/2009, the Indian company achieved sales of approximately EUR 45.7
million and an above-peer EBITDA margin of approximately 18%.
Gwalior is one of the largest Indian producers of benzyl products and one
of the leading global producers of sulphur chlorides for the agrochemicals
and pharmaceuticals as well as for the flavor & fragrance industries. Its
production sites are in Nagda, Madhya Pradesh state, and in Ankleshwar,
Gujarat state. In the future, production will be concentrated at the modern
Nagda site, which is currently expanding capacities.
LANXESS will acquire Gwalior's chemical businesses which will complement
the portfolio of the Basic Chemicals business unit and strengthen LANXESS
production base in the Indian market.
The acquisition will be financed out of existing liquidity. The transaction
is expected to be EPS accretive as of 2010.
Jiangsu Polyols achieved sales of about EUR 10 million in 2008 and
currently employs some 170 staff at a facility with competitive technology.
It mainly produces trimethylolpropane (TMP) that is used in lubricants,
paints and coatings. LANXESS's business unit Basic Chemicals is already a
major supplier of TMP in China and will integrate Jiangsu into its global
operations.
The Basic Chemicals business unit belongs to the Advanced Intermediates
segment, which achieved total sales in 2008 of EUR 1.3 billion. The segment
has proven to be one of LANXESS' more stable businesses in the economic
crisis due to its exposure to the agrochemical industry.
Leverkusen, June 8, 2009
Forward-Looking Statements
This news release contains forward-looking statements based on current
assumptions and forecasts made by LANXESS AG management. Various known and
unknown risks, uncertainties and other factors could lead to material
differences between the actual future results, financial situation,
development or performance of the company and the estimates given here. The
company assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.
PRESS RELEASE: LANXESS Underpins BRIC Strategy With Two Acquisitions In Asia
Leverkusen/Mumbai/Shanghai - Specialty chemicals group LANXESS AG is
underpinning its long-term growth strategy in the BRIC countries with two
acquisitions in Asia.
LANXESS subsidiary LANXESS India Private Ltd. will acquire the chemical
businesses and assets of stock market listed Indian company Gwalior
Chemical Industries Ltd. for EUR 82.4 million, including debt.
A corresponding agreement was reached with the company. The transaction is
subject to formal approval by Gwalior's shareholders and clearance by the
relevant antitrust authorities. Closing is expected at the end of the third
quarter of 2009.
LANXESS will also acquire the business and production assets of
Chinese-based Jiangsu Polyols Chemical Co. Ltd. Both parties have agreed
not to disclose the purchase price. Closing of this transaction is expected
in the third quarter of 2009. The medium-sized company, which was founded
in 2006, is located in Liyang, west of Shanghai.
Founded in 1978, the Gwalior's company's headquarter is based in Mumbai and
employs about 400 permanent staff. In the first nine months of its business
year 2008/2009, the Indian company achieved sales of approximately EUR 45.7
million and an above-peer EBITDA margin of approximately 18%.
Gwalior is one of the largest Indian producers of benzyl products and one
of the leading global producers of sulphur chlorides for the agrochemicals
and pharmaceuticals as well as for the flavor & fragrance industries. Its
production sites are in Nagda, Madhya Pradesh state, and in Ankleshwar,
Gujarat state. In the future, production will be concentrated at the modern
Nagda site, which is currently expanding capacities.
LANXESS will acquire Gwalior's chemical businesses which will complement
the portfolio of the Basic Chemicals business unit and strengthen LANXESS
production base in the Indian market.
The acquisition will be financed out of existing liquidity. The transaction
is expected to be EPS accretive as of 2010.
Jiangsu Polyols achieved sales of about EUR 10 million in 2008 and
currently employs some 170 staff at a facility with competitive technology.
It mainly produces trimethylolpropane (TMP) that is used in lubricants,
paints and coatings. LANXESS's business unit Basic Chemicals is already a
major supplier of TMP in China and will integrate Jiangsu into its global
operations.
The Basic Chemicals business unit belongs to the Advanced Intermediates
segment, which achieved total sales in 2008 of EUR 1.3 billion. The segment
has proven to be one of LANXESS' more stable businesses in the economic
crisis due to its exposure to the agrochemical industry.
Leverkusen, June 8, 2009
Forward-Looking Statements
This news release contains forward-looking statements based on current
assumptions and forecasts made by LANXESS AG management. Various known and
unknown risks, uncertainties and other factors could lead to material
differences between the actual future results, financial situation,
development or performance of the company and the estimates given here. The
company assumes no liability whatsoever to update these forward-looking
statements or to conform them to future events or developments.
lorenzo63
Age quod Agis
Rhodia's Ops In Emerging Mkts At Yr Ago Levels -CEO
PARIS (Dow Jones)--French chemicals specialist Rhodia SA's (RHA.FR) activities in emerging economies have returned to pre-crisis levels, but even if the worst is over in Europe and North America there is sill no clear trend there, Chief Executive Jean-Pierre Clamadieu said in an interview with Dow Jones Newswires.
"At the end of the first half we are back where we were a year ago (in emerging countries). In America and Western Europe, the worst is behind us, but we are in a situation where we don't see clear trends that recovery is here yet," Clamadieu said.
He noted that in Asia, recovery in activity levels are being seen in China and Korea, while Japan is not showing the same signs. The other key emerging markets for Rhodia are in Latin America, most notably Brazil.
Rhodia, which operates in automotive, electronics, consumer goods and industrial markets, saw its revenues slide in the fourth quarter of 2008 and the first quarter of 2009 on a collapse in demand and as its customers deferred purchasing, opting instead to use up their inventories. Revenue in the first quarter totaled EUR920 million versus EUR1.19 billion for the same period in 2008.
Turning to Europe Clamadieu said, "we saw a gradual improvement from January to March in demand. Since March the situation (in Europe) is stable with some qualitative signs of improvement. This is mostly customers telling us they are coming to the end of destocking, but this has not materialized yet in a significant demand increase in orders or sales.
"I expect that in the third quarter we will see the actual impact of (the end of) destocking in the form of higher volumes," Clamadieu said. Still, he's cautious about the third quarter as it is not yet clear if Rhodia's customers will adjust their normal plant stoppages during the summer recess.
Europe and North America accounted for 57% of Rhodia's EUR4.76 billion total sales in 2008.
As for the fourth quarter, Clamadieu said the key question globally is whether there will be a significant recovery in consumption, but for the moment it is too early to say.
Due to poor visibility, chemical companies have been shy to give guidance for the full year, instead emphasizing cost cutting plans and cash generation.
Clamadieu said Rhodia is well positioned to achieve its objective of free cash flow in 2009 and is still on target to achieve EUR150 million of structural cost savings by 2011.
With the addition to short-term cost savings, he said total savings for 2009 would be "well in excess" of the EUR60 million target.
French peer Arkema (AKE.FR) targets EUR110 million in savings for 2009, while Germany's Lanxess AG (LXS.XE) is targeting savings of EUR250 million for 2009 and 2010 combined.
"Our EUR150 million cost saving plan fits well with our current view of the markets in which we operate. If things change (from our current analysis) we would adjust our cost savings plans," Clamadieu said.
At the end of April, Standard and Poor's cut Rhodia's long-term credit rating to BB- from BB and affirmed its B short-term credit rating to reflect its opinion that key cash flow metrics and free cash flow generation will be under pressure in 2009 and 2010.
At March 31 Rhodia had net financial debt of EUR1.32 billion. The debt consists mainly of OCEANE convertible bonds maturing in 2014 and floating rate notes due in 2013.
"Today we are under no pressure to start looking at refinancing the company," Clamadieu said, noting the company has around EUR500 million of cash on the balance sheet and around EUR600 million of undrawn credit lines.
"We have plenty of financial resources and don't see a need to raise new equity, unless there was a specific project for which equity was needed. But we don't have any particular projects at the moment which would require that," he added.
Rhodia surprised investors in January when it announced the acquisition of the privately held Canadian specialty surfactants manufacturer McIntyre Group Ltd. At the time, Rhodia described it as a bolt-on acquisition to extend its personal cleaning product range in the Novecare division.
Clamadieu told Dow Jones Rhodia would consider further bolt-on acquisitions and is screening for opportunities, but is cautious to carry out acquisitions at present. "We would wait for signs of things improving before moving to the actual execution of such acquisitions," he said.
Clamadieu said that he doesn't see a trend for large scale consolidation in the chemicals sector as a whole.
He said there is still a need for restructuring in the polyamide industry to ensure a return to a balance between supply and demand.
Rhodia's Polyamide division, which is its largest by revenue with EUR1.79 billion in 2008, posted a 28% fall in sales in the first quarter. It is the world's second largest producer of Polyamide 6.6, the main product in the division.
However, Clamadieu said a price war is not a reality at present.
"We continue to enjoy satisfactory pricing power in all of our businesses," he said. "I continue to think margins are key to ensure the sustainability of our business. My feeling today is that price increases will be successful," noting the company is currently increasing prices in some business lines. Rhodia's earnings receive a significant boost from the sale of Certified Emission Reductions, or CERs, acquired under the Kyoto Protocol's Clean Development Mechanism. In particular, Rhodia generates credits from projects to cut greenhouse gas emissions at plants in South Korea and Brazil.
However, when Standard & Poor's downgraded Rhodia's credit rating in April, it also said it was concerned carbon credit prices may remain low in 2009 and 2010.
Clamadieu said that although low industrial production is weighing on the CER price at the moment, Rhodia expects the market will be bullish in the long term. He also said Rhodia's experience in the business gives it opportunities beyond the sale of credits and it is looking to use its technical and regulatory experience to work with other companies on similar projects and acquire portfolios of credit.
In 2008, CERs contributed EUR158 million to Rhodia's 2008 Earnings Before Interest, Tax, Depreciation and Amortization, or Ebitda.
At the time of its first quarter results publication early May, Rhodia said it had hedged 70% of the volume of its 2009 CER carbon credits at EUR14.7 and it forecasts 13 million tons of carbon credits over the full year. On the BlueNext exchange CERs closed Friday up EUR0.04 at EUR11.92.
Concerning the announcement Monday of the acquisition of Econcern Group's participation in six pilot biogas production projects located in China and Vietnam, Clamadieu said it is a signal that the company intends to pursue biogas development.
"For us, this is one of the developments we see in the carbon business," Clamadieu said.
At 0853 GMT shares in Rhodia were down 13 cents or 2.5% at EUR4.98 in a lower Paris market. The stock has lost half of its value over the past 12 months but has recovered from March lows of close To EUR2
PARIS (Dow Jones)--French chemicals specialist Rhodia SA's (RHA.FR) activities in emerging economies have returned to pre-crisis levels, but even if the worst is over in Europe and North America there is sill no clear trend there, Chief Executive Jean-Pierre Clamadieu said in an interview with Dow Jones Newswires.
"At the end of the first half we are back where we were a year ago (in emerging countries). In America and Western Europe, the worst is behind us, but we are in a situation where we don't see clear trends that recovery is here yet," Clamadieu said.
He noted that in Asia, recovery in activity levels are being seen in China and Korea, while Japan is not showing the same signs. The other key emerging markets for Rhodia are in Latin America, most notably Brazil.
Rhodia, which operates in automotive, electronics, consumer goods and industrial markets, saw its revenues slide in the fourth quarter of 2008 and the first quarter of 2009 on a collapse in demand and as its customers deferred purchasing, opting instead to use up their inventories. Revenue in the first quarter totaled EUR920 million versus EUR1.19 billion for the same period in 2008.
Turning to Europe Clamadieu said, "we saw a gradual improvement from January to March in demand. Since March the situation (in Europe) is stable with some qualitative signs of improvement. This is mostly customers telling us they are coming to the end of destocking, but this has not materialized yet in a significant demand increase in orders or sales.
"I expect that in the third quarter we will see the actual impact of (the end of) destocking in the form of higher volumes," Clamadieu said. Still, he's cautious about the third quarter as it is not yet clear if Rhodia's customers will adjust their normal plant stoppages during the summer recess.
Europe and North America accounted for 57% of Rhodia's EUR4.76 billion total sales in 2008.
As for the fourth quarter, Clamadieu said the key question globally is whether there will be a significant recovery in consumption, but for the moment it is too early to say.
Due to poor visibility, chemical companies have been shy to give guidance for the full year, instead emphasizing cost cutting plans and cash generation.
Clamadieu said Rhodia is well positioned to achieve its objective of free cash flow in 2009 and is still on target to achieve EUR150 million of structural cost savings by 2011.
With the addition to short-term cost savings, he said total savings for 2009 would be "well in excess" of the EUR60 million target.
French peer Arkema (AKE.FR) targets EUR110 million in savings for 2009, while Germany's Lanxess AG (LXS.XE) is targeting savings of EUR250 million for 2009 and 2010 combined.
"Our EUR150 million cost saving plan fits well with our current view of the markets in which we operate. If things change (from our current analysis) we would adjust our cost savings plans," Clamadieu said.
At the end of April, Standard and Poor's cut Rhodia's long-term credit rating to BB- from BB and affirmed its B short-term credit rating to reflect its opinion that key cash flow metrics and free cash flow generation will be under pressure in 2009 and 2010.
At March 31 Rhodia had net financial debt of EUR1.32 billion. The debt consists mainly of OCEANE convertible bonds maturing in 2014 and floating rate notes due in 2013.
"Today we are under no pressure to start looking at refinancing the company," Clamadieu said, noting the company has around EUR500 million of cash on the balance sheet and around EUR600 million of undrawn credit lines.
"We have plenty of financial resources and don't see a need to raise new equity, unless there was a specific project for which equity was needed. But we don't have any particular projects at the moment which would require that," he added.
Rhodia surprised investors in January when it announced the acquisition of the privately held Canadian specialty surfactants manufacturer McIntyre Group Ltd. At the time, Rhodia described it as a bolt-on acquisition to extend its personal cleaning product range in the Novecare division.
Clamadieu told Dow Jones Rhodia would consider further bolt-on acquisitions and is screening for opportunities, but is cautious to carry out acquisitions at present. "We would wait for signs of things improving before moving to the actual execution of such acquisitions," he said.
Clamadieu said that he doesn't see a trend for large scale consolidation in the chemicals sector as a whole.
He said there is still a need for restructuring in the polyamide industry to ensure a return to a balance between supply and demand.
Rhodia's Polyamide division, which is its largest by revenue with EUR1.79 billion in 2008, posted a 28% fall in sales in the first quarter. It is the world's second largest producer of Polyamide 6.6, the main product in the division.
However, Clamadieu said a price war is not a reality at present.
"We continue to enjoy satisfactory pricing power in all of our businesses," he said. "I continue to think margins are key to ensure the sustainability of our business. My feeling today is that price increases will be successful," noting the company is currently increasing prices in some business lines. Rhodia's earnings receive a significant boost from the sale of Certified Emission Reductions, or CERs, acquired under the Kyoto Protocol's Clean Development Mechanism. In particular, Rhodia generates credits from projects to cut greenhouse gas emissions at plants in South Korea and Brazil.
However, when Standard & Poor's downgraded Rhodia's credit rating in April, it also said it was concerned carbon credit prices may remain low in 2009 and 2010.
Clamadieu said that although low industrial production is weighing on the CER price at the moment, Rhodia expects the market will be bullish in the long term. He also said Rhodia's experience in the business gives it opportunities beyond the sale of credits and it is looking to use its technical and regulatory experience to work with other companies on similar projects and acquire portfolios of credit.
In 2008, CERs contributed EUR158 million to Rhodia's 2008 Earnings Before Interest, Tax, Depreciation and Amortization, or Ebitda.
At the time of its first quarter results publication early May, Rhodia said it had hedged 70% of the volume of its 2009 CER carbon credits at EUR14.7 and it forecasts 13 million tons of carbon credits over the full year. On the BlueNext exchange CERs closed Friday up EUR0.04 at EUR11.92.
Concerning the announcement Monday of the acquisition of Econcern Group's participation in six pilot biogas production projects located in China and Vietnam, Clamadieu said it is a signal that the company intends to pursue biogas development.
"For us, this is one of the developments we see in the carbon business," Clamadieu said.
At 0853 GMT shares in Rhodia were down 13 cents or 2.5% at EUR4.98 in a lower Paris market. The stock has lost half of its value over the past 12 months but has recovered from March lows of close To EUR2
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