Neville Prior

REACH & Brexit

Neville Prior  5 March 2018 11:25:16 AM
I am quite sure that all chemical businesses and users of chemicals in the UK, (and indeed in the EU generally), are concerned over the effects of Brexit on REACH. There is so much information and speculation available. Any views would be interesting, please feel free to comment...........

Male Grooming Brand Fish Acquired by Swallowfield

Neville Prior  5 March 2018 11:23:15 AM
Image:Male Grooming Brand Fish Acquired by Swallowfield
Fish, the UK male grooming brand, has been acquired by Swallowfield for £2.7m.

Kolb Closes Acquisition of Elementis Specialties

Neville Prior  5 March 2018 11:04:26 AM
Image:Kolb Closes Acquisition of Elementis Specialties
Kolb Distribution, a subsidiary of Kuala Lumpur Kepong Berhad (KLK), completed the acquisition of Delden-based Elementis Specialties Netherlands (ESN) on Feb. 28, 2018. As of this day, ESN is wholly owned by Kolb and renamed to KLK Kolb Specialties. The acquired business manufactures surfactants and further specialties and will expand the existing Kolb business portfolio in terms of product range and market coverage. The use of the Delden site as another hub for KLK's market penetration strategy will further accelerate growth in the group's downstream chemical specialties business in Europe.

European Environment Agency Urges ’Inclusive, Visionary’ Chemicals Policies

Neville Prior  2 March 2018 10:37:43 AM
Image:European Environment Agency Urges ’Inclusive, Visionary’ Chemicals Policies
Growing chemical production and changing exposure patterns due to societal "megatrends", necessitate more inclusive policy approaches and prioritising of critical parameters, the European Environment Agency (EEA) has said. Its comments form part of ten key ideas the agency has outlined in a report, following a seminar in May last year of its scientific committee - a group of 17 independent scientists, representing a variety of environmental concerns.

A less toxic environment requires visionary and inclusive stakeholder approaches, the report - Chemicals for a sustainable future - says in one of its messages.

In others, it says the European legislation has reduced acute pollution, but chronic, less apparent, effects persist. And that policy approaches need to be further integrated in support of sustainability objectives.

The EEA report also calls for "targeted innovation" for more sustainable chemistry, and avoidance of upstream use of persistent and hazardous chemicals.

Additionally, it says a focus on critical parameters is more important than gathering more general data. And that monitoring for a wider variety of chemicals can provide earlier warnings.

"We need to move away from the conflict model towards a new model of collaboration, transparency and trust between industry, scientists and regulators," said committee member Greet Schoeters from the Flemish Institute for Technological Research (VITO).

Guests at the seminar included Björn Hansen, then the head of DG Envi's chemicals unit. Mr Hansen, currently the executive director of Echa, told the seminar a key to integrated environmental policies might be "to look at the world from an upstream chemicals perspective" rather than one that focuses on products and articles. "What matters is the total impact," he said, and that in terms of governance, the principles to follow are to "avoid and minimise" the use of chemicals. With regard to substances in products, Mr Hansen said: "We need to provide 'carrots' for industry."

Cornelius Partner BASF Focused on Digesting Recent Acquisitions

Neville Prior  2 March 2018 10:36:12 AM
Image:Cornelius Partner BASF Focused on Digesting Recent Acquisitions
BASF's acquisition spree in recent years will keep the company busy integrating the new businesses and will not continue seeking mergers and acquisitions (M&A) targets, according to the German chemical major’s CEO, although it will keep looking at potential good opportunities. BASF chief Kurt Bock said BASF will now focus on the acquisitions it has made in the last two years – Chemetall for $3.2bn in 2016 and Solvay’s polyamide assets for €1.6bn in 2017, among others – adding that “investing money is not the difficult thing” but rather to improve “growth and earnings” with the already-acquired businesses.

Bock did not expand much on BASF’s most expensive proposed acquisition, that of Bayer’s seeds and herbicides assets for €5.9bn, as the transaction, agreed in principle in October 2017, is still subject to regulatory approvals, although he did respond to reporters’ questions about the deal’s price tag. The €5.9bn BASF is willing to pay for the assets came across to many chemical analysts as pricey, although Bock said that the current multiples in the chemicals M&A space would have not allowed for a lower price.

“It is not easy to judge the price if you don’t have the full set of data, and what we have seen Bayer's assets is very good operations, very well run, and what we have offered is completely in line with other acquisitions within the chemical industry,” said Bock.

“In agrochemicals we know what we are doing and the seeds business was the missing part in order to be fully successful.”

The CEO added that the Oil & Gas division will “simply disappear” from BASF’s operational structure as of 1 January 2018, with retroactive effect, after the agreement the company signed with LetterOne in December.
A potential initial public offering (IPO) on the stock exchange of the new entity will take place at the earliest 18 months after the transaction’s close, said the CEO. “If there are other opportunities in the M&A space we’ll take a look at them, but we don’t have a list of things I can present you with,” said Bock.

The CEO was also asked about the US tax reform and how that could boost capital investment, although he added that the country still has “high specific investment costs” which somehow could offset the positive impact coming from lower corporate taxes. BASF already said in January, when it presented its preliminary annual results, that the US’ Tax Cuts and Jobs Act had boosted its earnings by €400m through a one-time cash windfall in the fourth quarter. However, Bock wanted to cool down the enthusiasm for the reform.

“The reform seems very positive, and our colleagues and competitors within chemicals received it very well. Will that lead to the fact that there will be automatically more investment?” Bock said.

“Many factors come into place here, one of them being investment costs in the US, and these are high, the highest globally, it is remarkable really: currently there is low interest rates and low taxes but high specific investment costs.” For BASF overall’s tax bill, however, the US reform will have a small impact, said Bock, forecasting for this year an average tax rate, adding that its German tax bill is the most important and nothing has changed on that front.

“Our tax rate will not dramatically change. It fluctuates between 20% and 25% and that will only change if Germany had a tax reform,” he said, adding that in the 67 pages containing the preliminary agreement to form a government in the country between the current governing CDU and the SPD there was no mention to tax reforms. According to Bock, the fact that Germany has been without a government for more than five months is worrying for the economy, although he joked about how the lack of new regulations and laws can present businesses with opportunities. However, the inability of lawmakers to come up with a coalition to form a government since the September elections has meant, said Bock, that the country has been running without a government for almost a year now because the electoral cycle started in the spring of 2017 already. While on one hand he said the lack of government was bad for the economy, the lack of regulation was not so bad, in his view. “Sometimes it's good not to have a government not to get too much regulation, which sometimes is not science-based but voodoo science-based, like with glyphosate. At some point we’ll have a government and they will go into regulating mode,” he said. He was referring to the long-running debate about the widely used weed killer glyphosate, which is being subject to a potential licence renewal in the EU for another 10 years. Chemical companies and trade groups have supported the use of glyphosate arguing it is safe to use, while green groups have argued it can be carcinogenic.

Bock added that BASF’s main worry for 2018 was the euro/dollar exchange rate, which is set to annoy earnings for those companies who, like BASF, have important operations in the US and send their earnings to the eurozone. The euro accumulates gains of more than 20% against the dollar over the last 12 months. “The dollar exchange rate is really what we are mostly concerned about. Also inflation: US’ labour inflation costs which have been going up. Those are things that we have to keep at the back of our minds,” said Bock.

“Then there are wild cards, surprises. I am speculating now, [but imagine] we couldn’t achieve a solution for Brexit the UK’s departure from the EU in March 2019: We would fall back to a regime which is WTO standards, but I can’t really imagine that happening.” The UK’s planned departure from the 28-country block has been marred by the lack of progress in the negotiations after the country voted to exit already in June 2016.

Bock is due to leave his post in May’s annual general meeting (AGM). Although he may come back to BASF board in 2020, he has to wait at least two years to do that as per the German law’s required “cooling period” following departure from a key corporate role. “Cooling off means cooling off and, as a matter of fact, I will cool off. I’ll come up with something to do,” concluded Bock.

Cornelius Partner Tronox Reports on 2017

Neville Prior  2 March 2018 10:34:33 AM
Image:Cornelius Partner Tronox Reports on 2017
Chemical and minerals maker Tronox reported Thursday rising revenues and a loss for 2017, as it battles with federal regulators to get approval of a deal worth more than $1 billion. Net sales for 2017 reached about $1.7 billion, up 30 percent from 2016. The company incurred an annual loss of $285 million — a total that included $179 milllion in losses from discontinued operations and $48 million in expenses tied to its proposed $1.7 billion acquisition of the titanium dioxide business of Saudi Arabian firm Cristal. Contributing to the loss on discontinued operations, the company sold last September its alkali chemicals business for about $1.33 billion, a sum that will largely fund the titanium dioxide purchase. The company sustained a $61 million loss in 2016. In the fourth quarter, net sales rose 32 percent year-over-year, to $464 million. Its bottom line was break even, compared with a $121 million gain in the same period in 2016.

“We continued to build on the momentum generated in earlier quarters — momentum that we see continuing in 2018,” CEO and President Jeffry Quinn said in a statement. “Our titanium dioxide business delivered robust performance in the fourth quarter. … This high level of performance clearly reflects the benefits of our vertical integration, as both our pigment and mineral sands operations delivered strong revenue and profit growth.”

Also, Tronox and Cristal announced they had agreed to extend the end date for closing the titanium dioxide deal from May 21 to June 30. If necessary, three automatic three-month extensions would follow, until March 31, 2019, depending on pending regulatory approvals. Tronox would have to pay a $60 million termination fee, if either company walked away from the deal after March 31, 2019, should the deal not gain government backing, or if Tronox were to withdraw its offer after Dec. 31, in the event that it did not think it could secure the required authorizations. The agreement for the deal was originally announced in February 2017.

Tronox and Cristal announced the extension as litigation overshadows their pact. Tronox last month sued the FTC, arguing that the agency is resorting to improper tactics to block the acquisition. Company officials have said the FTC is relying solely on an administrative process that they said could not conclude before the acquisition agreement expires, a “thinly veiled attempt to run out the clock instead of resolving its concerns about the transaction on their merits.” An action in federal court would be necessary in the near future to promptly resolve the matter, they said. FTC officials have declined to comment on the lawsuit. While Tronox said the FTC is depending only on administrative moves to squash the deal, the FTC did sue the company last December over the transaction. In that complaint, FTC officials allege that the acquisition would violate antitrust laws by significantly reducing competition in the North American market for titanium dioxide. In response, Tronox officials have said the FTC’s complaint is based on flawed analysis of the market for titanium dioxide, a white pigment used in products including paint, industrial coatings, plastic and paper.

Cornelius’ Partner Synthomer Reaps Rewards of Acquisitions

Neville Prior  2 March 2018 10:29:41 AM
Image:Cornelius’ Partner Synthomer Reaps Rewards of Acquisitions
Synthomer grew its revenues by 42% to a record £1,480.2m in 2017, helped by acquisitions, higher average raw material prices and favourable currency translation. Organic growth from its investment in the Europe and North America (ENA) segment more than compensated for the reduced, but stable, Nitrile latex margins in the Asia and Rest of the World (ROW) segment.  Volumes were higher by 9% to 1,443.8ktes with the increase reflecting a combination of underlying growth and additional volumes from Oxo Belgium (Speciality Additives), which was fully integrated during 2017.  Underlying profit before tax increased from £122.2m to £130.0m, an increase of 6.4% and 3.0% on a constant currency basis. The rise in underlying profit before tax reflects volume and margin growth, the contribution made by Speciality Additives and the depreciation in Sterling.  IFRS profit before tax decreased from £136.7m to £86.4m mainly as a result of one-off items of income in 2016 including the profits on the Malaysian land sales (£33.2m).

Neil Johnson, chairman, said: "The group's solid performance in 2017 reflects both the benefits of recent bolt-on acquisitions made in 2016 and 2017 and continued organic growth in our Europe and North America segment. This progress has more than offset the expected impact of lower Nitrile latex margins in our Asia and Rest of World segment."

"Looking forward, whilst acknowledging the ongoing challenges in our Nitrile latex and constructions and coatings Dispersions markets, we are confident of making further solid progress in 2018, underpinned by underlying growth in both segments, and from integrating our recent acquisitions."

"With our significant organic investment in new capacity being commissioned in late 2018, we remain confident in continuing to deliver growth in profitability and driving further value for shareholders in future years."

Sun Chemical Buys Luminescence

Neville Prior  8 February 2018 10:52:27 AM
Image:Sun Chemical Buys Luminescence
Family-owned Luminescence was established in 1987. It is based in Harlow and makes a wide range of products used to protect documents and other items from alteration and counterfeiting.   The Luminescence range of UV and conventional security inks spans numerous analogue printing processes as well as inkjet applications. The company also makes security threads for passports. It has customers in more than 100 countries.  Sun Chemical, together with its parent DIC Corporation, has acquired Luminescence Holdings for an undisclosed sum. In its most recent financial year, to 31 May 2017, Luminescence posted a £5.9m operating profit on sales up 37% to £12.6m. Gross margin was 70% and the business had shareholders' funds of £13.3m. It has around 70 staff. It is understood that the Cooper family members who work at the Essex company will remain with the business.

It is Sun Chemical's second acquisition related to security printing this year, and the manufacturer said the buy would further increase its market share and "create an enormous growth platform" in the $2.7bn (£1.9bn) security ink market. In a statement, Sun Chemical chief marketing officer Felipe Mellado praised Luminescence for its fantastic reputation in the security market for technology and service.

"Sun Chemical has the world's largest research and development capabilities in the ink marketplace. What these two companies bring together is a truly exciting global supplier that will further strengthen our service to customers," he said.

Last month Sun Chemical acquired Italian firm C.T.LAY, which has a product range that includes pre-laid overlays and pre-patched holograms for plastic and security cards.

Sun Chemical has sales of more than $7.5bn and around 20,000 employees around the world, and celebrates its bicentenary this year.

Cornelius Polska in Forbes Diamonds Ranking Again!

Neville Prior  8 February 2018 10:42:45 AM
Image:Cornelius Polska in Forbes Diamonds Ranking Again!
Independent European distributor and manufacturer of speciality chemicals, ingredients and raw materials for the performance chemicals, personal care and health & nutrition markets, Cornelius Polska, has been named amongst the fastest growing companies in Poland for the second year running.
Cornelius Polska was a winner in the Forbes Diamonds ranking 2018. Forbes Business Diamonds is an annual ranking of companies that were the most successful in increasing their value in the past three years.

Piotr Wasilewski, Managing Director of Cornelius Polska, said: “We are extremely proud and honoured to be handed this prestigious title. It is given to companies with the most dynamic value growth which is testament to the hard work of our employees, as well as cooperation with our partners. We can now officially say we have become one of the best enterprises in Poland.” 

Cornelius Polska has been ranked number 11 in the Warsaw district, moving up two places from 2017 and also listed at number 47 in Poland, within the ‘small company’ category for companies achieving revenues of between 5 and 50 million zlotys.

The Cornelius Polska business has 20 employees and a long-standing reputation for offering quality, innovative products to wide range of customers across Poland.

Darren Spiby, Cornelius Group CEO, commented "We are delighted to see our Polska team recognised for this outstanding performance. We have a solid business in Poland with exciting growth plans and it is tremendous for the team to be recognised in this way."

Akzo Nobel Sees Higher EBIT & Revenues In 2017 : Backs 2020 Outlook

Neville Prior  8 February 2018 10:39:58 AM
Image:Akzo Nobel Sees Higher EBIT & Revenues In 2017 : Backs 2020 Outlook
Akzo Nobel NV Thursday said it expects fiscal 2017 earnings before interest and tax or EBIT, including discontinued operations, to be around 1.525 billion euros, higher than last year's 1.502 billion euros. EBIT excludes identified items totaling around 130 million euros mainly related to the transformation of AkzoNobel into a focused Paints and Coatings company, including the separation of Specialty Chemicals. The company said the internal separation of the Specialty Chemicals business is complete. A full separation of Specialty Chemicals, either via a private sale or a legal demerger, remains on track for April 2018. As a result, the Specialty Chemicals business will be reported as discontinued operations.

Revenue, including discontinued operations, for full-year 2017 is expected to be up 3% or up 4% excluding currency impact, at around 14.575 billion euros, compared to 14.197 billion euros last year. Positive developments continued for Decorative Paints, particularly in Asia, while challenging conditions in the marine and oil and gas industries impacted Performance Coatings

Specialty Chemicals delivered a strong performance throughout 2017, including during the fourth quarter.

Further, the company said the transformation of AkzoNobel into a focused Paints and Coatings company, including the separation of Specialty Chemicals, is progressing well and the associated one-off costs are within expectations.

AkzoNobel also confirmed financial guidance for 2020.
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