Neville Prior 19 April 2017 10:21:43 AM
Dulux paint-owner, AkzoNobel has reported a "record performance" for its first quarter as it continues to resist a hostile takeover attempt by a US rival. Earnings before income tax climbed 13% year-on-year to 376m euros (£314m), while sales were up 7% at 3.7bn euros. The Dutch firm also announced plans to spin off its chemicals unit and return most of the proceeds to shareholders.
US paint maker PPG has offered to pay more than $24bn (£19bn) for the firm. In an open letter on Monday, it urged Akzo's board to enter talks, saying they had given insufficient consideration to its proposal, which is favoured by some AkzoNobel shareholders
. It said Akzo's plan to sell its chemicals arm and remain independent was riskier and would create less value. But on Wednesday, AkzoNobel said its plan to split itself into two units - one focused on paints and the other on specialty chemicals - would boost growth. It said the separation, which would also achieve 50m euros of cost savings, would be completed within 12 months.
AkzoNobel boss Ton Buechner said: "Now is the right time to create two focused, high-performing businesses. "This strategy will create substantial value for shareholders, with significantly less risks and uncertainties compared to alternatives." The firm said its earnings before income tax in 2017 were expected to be about 100m euros higher than in 2016. It also said its research and development efforts would be be strengthened by its new innovation hub at Felling in the UK.
Neville Prior 18 March 2017 02:23:48 PM
Huntsman Corporation has announced a plan to close the white end finishing and packaging operation of its titanium dioxide (TiO2) manufacturing facility based in Calais, France, during the third quarter 2017. The announced plan follows the 2015 closure of the black end manufacturing operations and would result in the closure of the entire facility. 108 positions on the site will be affected. The plan to close the Calais white end is structured to allow completion of any remaining obligations to any third parties and regulators.
Simon Turner, President of Huntsman Pigments and Additives division, commented: "The planned closure of the Calais facility further optimizes our manufacturing network and will increase our recently announced business improvement program by $15 million to a total annual benefit of $90 million. Our priority is to communicate with our Calais employees and their representative groups, along with local community leaders, to ensure that the planned closure is safely and effectively managed."
Neville Prior 15 March 2017 11:45:13 AM
The UK's Chemical Business Association (CBA) has urged the government to push for changes to REACH provisions to ensure continued European market access for UK chemical distributors after Brexit. Its statement comes ahead of next week's House of Commons Environmental Audit Committee (EAC) inquiry oral session, which will continue to examine the future of UK chemicals regulation. And the government is expected to trigger Article 50 to start the formal process of the UK's withdrawal from the EU later in the month. The CBA's chief executive Peter Newport said that unless the UK government "negotiates revised terms or some sort of opt-in", UK distributors importing substances from outside the European Union are likely to be denied access to European markets. This is because under the current terms of REACH, UK distributors would not be 'non-EU manufacturers' as they import and distribute, rather than manufacture, the CBA said. As such, they could not appoint an only representative to comply with the existing REACH provisions.
Trade bodies have expressed concerns
to the EAC inquiry over access and ownership of REACH data and registration dossiers. In its statement, the CBA said it wants clarity on the status of products already registered by its member companies under REACH's 2010 and 2013 registration deadlines. Securing continuance and benefits of these registrations post-Brexit should be a "key aspect" of the UK's negotiating position, Mr Newport said. "Failure will irreparably damage a significant proportion of the UK chemical supply chain." At the last EAC inquiry on 21 February, the Chemical Industries Association (CIA) chemicals policy director Nishma Patel said a mutual recognition model between a UK-REACH system and EU REACH – whereby data requirements for registration dossiers would essentially be similar or identical – 'could work
'. She was joined by CBA technical director Douglas Leech, who told the inquiry that mutual agreement is a "likely possibility" if the UK and member states see benefits, but the "critical factor" will be getting that recognition in place.
Neville Prior 15 March 2017 11:44:06 AM
The UK could seek a 'mutual agreement' with the EU to mirror elements of the REACH authorisation process in UK law, national chemical trade bodies told a UK parliamentary inquiry. During an evidence session on 21 February with the House of Commons Environmental Audit Committee, Chemical Industries Association (CIA) chemicals policy director, Nishma Patel, said devising such an agreement would be difficult but if, for example, the EU were to ban or restrict a specific substance, “the UK may decide to recognise that and do something similar if it is in the national interest”.
Alternatively the country could adopt an approach based on its national priorities, Ms Patel told MPs. And if the UK does something similar, the EU could consider it – possibly resulting in “a mutual-recognition type of model that could work” if both parties agree.
MPs also heard that a divorce from REACH could bring opportunities for UK businesses. Susanne Baker, from techUK, said a small number of companies “see the benefits” of diverging from REACH because of complexities around authorisation. It might allow a “more pragmatic approach” in managing risks of certain substances in the manufacturing process, she said. Certain substances are subject to sunset dates, after which they cannot be used unless authorised by Echa and the Commission. Ms Baker said techUK has asked the UK environment ministry whether they will still apply after the UK has left the EU.
On the issue of REACH registration, said Ms Patel, the CIA is looking at a model of mutual recognition
between a UK-REACH system and EU REACH whereby data requirements for registration dossiers would essentially be similar or identical. This would mean "one registration would cover you for UK and EU manufacturing and supply, because many of our companies are not only based in the UK but have counterparts in the EU". The Chemical Business Association’s technical director, Douglas Leech, told the inquiry that mutual agreement is a “likely possibility” if the UK and member states see benefits, but the “critical factor” will be getting that recognition in place.
The CIA has previously said that Brexit could mean more risk-based
chemicals regulation for the UK, but Ms Patel told MPs that a true mirroring would not be possible without “enshrining” the precautionary principle in UK legislation. “REACH has both hazard and risk elements, and, by no means, am I saying that we stray from those hazard-based elements.” Without basic hazard information and intrinsic information on chemicals, essentially there is no market, she said. The UK could take a “different approach” on zero-exposure in manufacturing, she said, and look at the hazards of the chemical and if entire containment is required, or if there is sufficient work being done to minimise exposure. Often, said Mr Leech, during EU discussions the UK has “had to push” for risk management options instead of a blanket proposal for a ban. The UK has "championed" this process and it has asked if there is “a better way” if, for example, the substance in question is vital to global manufacturing.
Neville Prior 15 March 2017 11:39:45 AM
British cosmetics firm Lush says future expansion might have to be outside the UK, due to risks over Brexit. The company recently opened a plant in Germany and says further expansion of manufacturing and buying operations might have to be abroad. It blamed a "severe" skills shortage in the UK and said that Brexit could potentially make that situation worse by restricting the movement of workers. Lush said 20% of its UK workforce are not UK citizens. European members of staff "felt unwelcome and understandably upset" by the vote in favour of Brexit, Lush said in comments accompanying its latest trading statement. Staff that wanted to leave the UK have been offered jobs at its operations in Germany, and 80 have taken up that offer.
The company, which is known for its fizzing bath bombs and soap said: "Lush has flourished from the freedom of movement of people and goods, and now we face uncertainty in both of these areas.
"The negotiation of new trade agreements could take years, but the risk is that we will be paying more import duties across the business.
"Having opened our new Germany manufacturing facility during the year we will be reviewing other options for growth outside of the UK."
Lush has 931 stores in 49 countries, with manufacturing facilities in seven countries. The Lush plant in Poole, Dorset currently supplies 20 countries. In its financial year, which ended 30 June, Lush reported sales of £723m, up 26% on the previous year. Pre-tax profit was £43.2m, a 76% jump. Last year the company donated more than £10m to charities and other good causes. The company's current financial year got off to a strong start. Sales in the six months to 31 December were up 22%.
Neville Prior 14 March 2017 02:02:18 PM AkzoNobel, the owner of Dulux and Polyfilla
, is set to spin off its sprawling specialty chemicals arm after rejecting a €20.9bn (£18.1bn) takeover offer from a rival firm. The move was made by US-based PPG Industries, which said it would review the situation after its “attractive and comprehensive proposal" was rejected. The offer was "unsolicited, non-binding and conditional", said Akzo, worth €83 per share, which is a 29pc premium on its closing price on Wednesday. Akzo's chief executive Ton Büchner said that PPG's cash and shares proposal had failed "to reflect the long-term value creation potential of the company". He added that PPG's offer was risky because it would create a highly leveraged company, and looked likely to be blocked by competition regulators. Kepler Cheuvreux analyst Christian Faitz said that the two companies were the biggest in the coatings market, with PPG holding 12pc and Akzo 9pc. The Dutch chemicals company, which employs 3,500 people in the UK to manufacture products and for R&D, said it wanted to spin off the arm in order to "unlock value".
The speciality chemicals arm makes up one third of Akzo's sales and earnings, with an operating profit last year of €629m on sales of €4.8bn. Mr Büchner said the company was planning to announce plans to sell or float the specialty chemicals arm later in the year, but had brought forward the announcement after PPG's offer. Akzo is considering different ownership structures for the spin-off arm but it could lead to the establishment of an independent listed entity. Akzo’s shares are up approximately 46pc on the last five years, giving it a stock market value of €15.8bn, partly due to its focus on innovation in chemical products.
It comes just before the Dutch election, in which the issue of foreign takeovers has been a concern.
Neville Prior 14 March 2017 01:42:22 PM Titanium dioxide shortage leads to higher prices of printing inks.
One of the world’s largest titanium dioxide (TiO2) suppliers had to stop production at its Finnish manufacturing site due to a fire at the end of January. Since then, the resulting TiO2 shortage has led to further increased raw material prices, which also severely affect the printing inks industry. Siegwerk Druckfarben AG & Co. KGaA
, one of the leading international suppliers of printing inks for packaging applications and labels, will increase the prices for all of its inks containing titanium dioxide (TiO2) effective April 1. This price increase is caused by steadily rising raw material costs due to a serious supply shortage of TiO2.
The industry has been observing a substantial increase of TiO2 prices for the last 18 months, mainly driven by reduced production capacities in Asia as well as recent mergers substantially reshaping the TiO2 market. On top of this, a fire incident – declared as force majeure – occurred in January 2017 and forced one of the largest TiO2 manufacturers to stop its production. The affected site in Pori, Finland, normally accounts for a considerable amount of the global TiO2 ink grade capacity, which now is shut down, creating an immense supply shortage. The supplier is committed to repairing the site as quickly as possible but the duration of the production stoppage is still unpredictable. Going forward, serious supply shortages throughout 2017 can be expected.
“We at Siegwerk have been working intensively to maintain a continuous supply of titanium dioxide through our own global supply network. Thus, we have secured the supply for our current customers. We will work closely with them to determine the individual best solutions by evaluating the use of alternative titanium dioxide grades or products of different qualities,” said Hugo Noordhoek Hegt, president EMEA at Siegwerk. “However, the persisting supply shortage has led to substantial cost increases and therefore also forces us to adjust the prices of all of our inks containing titanium dioxide.”
Titanium dioxide (TiO2) is a white pigment that is irreplaceable for the formulation of white inks and coatings due to its high opacity. Especially in flexible packaging, the performance of a white ink is key for a high-quality print result. That’s why the current TiO2 supply shortage has substantial impact on the printing ink industry.
Neville Prior 17 February 2017 09:34:17 AM
A fire at Huntsman Corporation’s titanium dioxide manufacturing facility at Pori in Finland could have severe ramifications for white pigment ink supplies to Europe. The fire, which broke out on 30 January, has stopped production at the site until repairs can be completed. The manufacturer said emergency services had responded quickly and that and no one had been injured. According to Huntsman, the Pori plant has a capacity of 130,000 tonnes, representing approximately 15% of Huntsman’s total titanium dioxide capacity and 10% of total European demand. The site is insured for property damage as well as loss of earnings.
The European Printing Ink Association (EuPIA) said the fire had caused "severe and immediate" pressure on inward costs for the ink manufacturing supply chain. EuPIA executive manager Martin Kanert said: “Huntsman has cut down the supplies to individual suppliers. I don’t know how the current supply is limited, but certainly if suppliers were not able to find alternative grades it would become problematic. Titanium dioxide is used throughout the industry.” Double-digit price increases have already been announced by certain pigment suppliers as a direct consequence of shortages in the market. Huntsman is yet to announce a date it will be returning to full production but has said that it is committed to repairing the site as quickly as possible. It said serious shortages in the supply of graphic arts grade pigments should be expected throughout 2017. Suppliers have been working to find alternative grades, with China being one potential source. However, the Chinese government has recently implemented mandatory production cuts as a result of increasing pollution levels. This has affected a number of titanium dioxide production plants in China. “In the interim, my members will try to find alternative grades from somewhere else in the world but they report that there are difficulties in doing that,” added Kanert.
Neville Prior 16 February 2017 12:07:54 PM
A lady who works with me, shared an article she had written about her son Jack, in the Down's Syndrome Association Journal. It is a lovely article, and I was kindly given permission to add it to my blog.
Neville Prior 13 February 2017 11:28:17 AM
The delayed effect of the European Union's sprawling 10-year old law to control the environmental impact of all chemicals produced or imported within EU territory is now being felt across Europe's militaries. It threatens security of supply lines while upping the research cost of chemical substitution by military forces and the defence industry, according to officials at the European Defence Agency, who will submit mitigating recommendations to the European Commission as it reviews the legislation in 2017. "Our militaries are just now starting to understand the implications of REACH," an EDA expert told Jane's on 7 February, referring to the EU's 2007 Registration, Evaluation, Authorisation, and Restriction of Chemicals directive.