Neville Prior

Some Stuff from the Industry

Neville Prior  28 April 2011 12:33:07 PM
Cornelius Polish Seminar
The seminar was great success, you can read some of the industry press at :
Personal Care Magazine Article
Cosmetic Business Artcle

Cristal Global to shutter Baltimore plant
Cristal Global plans to close its Baltimore plant and lay off 78 workers beginning July 1, the state’s labor department said Wednesday. The closure will be complete in December 2013. The plant has been open since 1954. Cristal Global is one of the world’s largest makers of titanium dioxide and titanium chemicals. Hunt Valley-based Cristal said in August it would cease base pigment manufacturing at the Hawkins Point plant, but would continue to study possible manufacturing options for the site.

DuPont Net Tops Analysts’ Estimates; 2011 Forecast Raised
DuPont Co., the third-biggest U.S. chemical maker, raised its 2011 earnings forecast and posted first-quarter profit that beat analysts’ estimates as sales of titanium-dioxide pigment and genetically modified seeds gained. Net income climbed 27 percent to $1.43 billion, or $1.52 a share, from $1.13 billion, or $1.24, a year earlier, Wilmington, Delaware-based DuPont said today in a statement. That topped the $1.37 average estimate of 12 analysts in a Bloomberg survey. Net sales advanced 18 percent to $10 billion from $8.48 billion. DuPont has exceeded estimates in each of the nine quarters Chief Executive Officer Ellen Kullman has been in charge, even as expiring drug patents cut pharmaceutical royalties. Profit climbed 21 percent in the agriculture unit, the largest business, on seed sales, and performance chemicals profit more than doubled on pigment and refrigerants. “Sales and earnings were all better than expected across the board and the biggest one was performance chemicals,” Mark Gulley, a New York-based analyst at Soleil Securities who recommends buying DuPont shares, said in a telephone interview. “It looks like a fairly big beat and raise.”

Full-year earnings will be $3.65 to $3.85 a share, compared with a previous prediction of $3.45 to $3.75, DuPont said. The company reiterated that its planned acquisition of Danisco A/S may cut 2011 profit by as much as 45 cents a share. DuPont on Jan. 9 agreed to pay 31.7 billion kroner ($6.22 billion) to acquire Copenhagen-based Danisco, the world’s biggest producer of food additives and the second-largest maker of industrial enzymes, which are used in the production of biofuels. The deal, which requires the support of Danisco investors holding 90 percent of shares, should be completed this month, DuPont said last week. Kullman is investing in agriculture, electronics and safety and protection units to boost per-share earnings about 12 percent a year through 2015. DuPont raised average product prices 8 percent in the first quarter, more than making up for higher raw-material costs. Sales volumes increased 9 percent.

First-quarter pretax profit in the agriculture unit increased to $1.14 billion. Seed sales climbed 19 percent, led by corn and soybean seed gains in North America, DuPont said in a presentation on its website. Profit from performance chemicals climbed to $394 million as prices jumped 21 percent on demand for titanium dioxide, refrigerants and fluoroproducts such as Teflon nonstick coatings. DuPont is the world’s largest maker of titanium dioxide, which is used to add opacity and brightness to paints, plastics and paper. Demand for more environmentally friendly refrigerants got a boost from regulations in the European Union and California, said Karen Fletcher, a DuPont spokeswoman. Profit at DuPont’s coatings unit, the world’s biggest maker of car paint, rose 44 percent as North American auto demand improved, DuPont said. Global auto production will be down “significantly” in the second quarter because of the Japanese earthquake, and coating sales will gain “modestly” as a result, DuPont said in the presentation.

Akzo Nobel profit up 58 percent in Q1
Akzo Nobel NV, the world's largest maker of paints, said Thursday that first quarter earnings rose 58 percent despite increasing raw materials costs, with sales up in all regions, particularly in developing economies. Net profit was euro128 million ($186 million), up from euro81 million. Revenues rose 16 percent to euro3.76 billion, which the company said was due to 7 percent growth in volumes and 4 percent increase in prices. Chief Financial Officer Keith Nichols said the results showed the company was "managing inflationary headwinds." Despite a rise in commodities costs of around 15 percent, the company's overall operating margin had dipped just slightly to 7.7 percent of sales from 7.9 percent, as costs were passed on to customers.

About a third of Akzo's sales are decorative house paints, including names such as Dulux and Flexa. It has recently become Wal-Mart's paint supplier, leading to a 31 percent increase in sales volumes in the U.S., as it began selling there under the Better Homes & Gardens and Glidden brands. Sales at the division worldwide rose 13 percent to euro1.2 billion, while operating profits nearly doubled to euro37 million. The company's industrial chemicals division grew sales 17 percent to euro1.35 billion and operating profit rose by the same percentage, to euro174 million. Akzo's coatings division, which makes industrial coatings for planes, cars, ships and bridges, suffered from rising commodity costs and investment spending. Sales rose 18 percent to euro1.24 billion, but margins fell and operating profit also fell, dropping by 2.5 percent to euro115 million. Akzo said it plans to push through price increases at the division later this year.

Sherwin-Williams says rising costs to hurt Q2, shares fall
Top U.S. paints maker Sherwin-Williams Co forecast a weak second-quarter profit as input costs continue to rise amid slowing demand in markets like new construction, sending its shares down four percent. Sherwin-Williams now expects the coatings industry to face higher input costs than it previously forecast, citing rising prices of propylene and titanium dioxide, used as a paint pigment. It sees costs rising in the mid-teens percentage compared with its previous outlook of a 10 to 13 percent increase . "The year-over-year increase in raw material costs is likely to be greater in the second quarter with the rate of increase moderating somewhat in the back half," Chief Executive Chris Connor said on a conference call with analysts. These higher costs also led the world's No. 1 paints maker AkzoNobel to say that it would raise its prices. After market-beating first quarter results, Sherwin-Williams now expects a second-quarter profit of $1.65-$1.75 per share, falling short of analysts' average expectation of $1.84. January-March earnings stood at 63 cents a share, on revenue of $1.86 billion. Sherwin-Williams, whose smaller rivals include Valspar Corp and PPG Industries, caters to do-it-yourself (DIY) customers, contractors, as well as multinational industrial manufacturers.

PPG Shifts Paints to Chinese Pigment as Costs Increase
PPG Industries Inc. (PPG), the world’s second biggest paint maker, said it’s using less costly pigment from China to contain raw material costs that are rising faster than prices for the company’s paint. PPG, the maker of Olympic, Pittsburgh Paint and Sigma Coatings brands, is reformulating products globally with lower grades of titanium dioxide pigment, the main hiding agent in paint, and less costly polymers, Chief Executive Officer Charles Bunch said on a conference with analysts. The lower-cost materials represent less than 5 percent of ingredients, he said. “I wouldn’t say it represents any compromise in terms of quality,” Bunch said. “This is an across-the-board initiative on the part of PPG to expand our sourcing of supplies.” Paint makers are raising prices and reformulating products to preserve profit margins after the recession led some suppliers to shut factories, limiting supply. DuPont Co.’s first-quarter earnings, which topped analysts’ estimates on sales of titanium dioxide, bodes well for supply additions, Sherwin-Williams Co. (SHW) Chairman and CEO Christopher Connor said. “The impact of higher raw-material costs will likely get worse before it gets better,” Connor said today on a conference call. Raw material costs at Cleveland-based Sherwin-Williams, the largest U.S. paint retailer, may rise about 15 percent this year, compared with a prior forecast of 10 percent to 13 percent, he said. Dow Chemical Co. (DOW) plans to start selling Evoque polymer in the third quarter to help paint makers use as much as 20 percent less titanium dioxide.

Elementis Shows Good Q1
Elementis hit a 52-week high after the speciality chemicals company said trading in the first quarter of this year has put 2010's first quarter figures in the shade. The group has seen strong demand in its key end markets and all of its businesses have improved margins. The order book remains strong with the orders continuing to roll in at a rapid rate in April, and, as a result, the board expects earnings for the full year will be at the upper end of market expectations. Sales of Speciality Products were up 9% year on year in the first quarter, while operating margins in the division are significantly higher than in the second half of 2010. The Chromium business continues to fire on all cylinders, sustaining sales volumes at the levels seen during the same period last year. The company has succeeded in passing on raw material prices to customers and consequently operating margins are a tad ahead of levels seen in the latter part of last year. The strong sales growth and low capital intensity of the group's businesses is continuing to generate positive cash flow, leading to further reductions in debt levels, the company said.

Speculation over Reckitt Benckiser buy likely to rest on anti-trust laws
With the imminent departure of Reckitt Benckiser CEO Bart Becht, speculation is growing over a merger or acquisition bid. But a leading financial analyst believes anti-trust laws may throw a spanner in the works. With a new head at the helm, the company is more likely to be the target of either a merger with Colgate-Palmolive, or the subject of an acquisition by major players such as P&G or Unilever. Financial analyst Andrew Wood, of New York-based Sanford C Bernstein, says that there is no concrete evidence that any of the big players will be lining up for bids, but believes that at this early stage one of the biggest considerations will be regulatory and anti-trust laws. “Our deep-dive research on potential anti-trust issues indicates that Unilever, and especially, Colgate would have relatively minor issues with an acquisition of, or merger with Reckitt Benckiser,” said Wood.

However, the analyst’s research concludes that for the world’s biggest consumer goods player, P&G, the anti-trust and regulatory issues might prove to be too much of a serious contender in the bidding process. "P&G would have significant issues in too many countries and in too many categories, especially in the EU, which would probably preclude a deal," Wood said. P&G grew significantly in the 1990s and the early part of the new millennium, making a significant leap in 2005 when it bought the Gillette business, an acquisition that saw the company expand into oral care and men’s grooming, limiting its potential to make big M&A moves.

As part of its research Sanford Bernstein considered UK-based Reckitt Benckiser’s 20 primary markets, which include nine in the EU, as well as 500 country/category combinations to determine where there might be troublesome cross-over with potenial buyers. The analysis determined that P&G has significant anti-trust issues, specifically home care and depilatory in Europe, making an estimated 44 per cent of Reckitt Benckiser’s total sales potentially questionable and likely to block a deal. Unilever was considered to have potential issues in specific areas, again in the home care arena and in the South Africa and India markets, but the researchers believe that this will not be enough to preclude it from making a successful bid.

Meanwhile Colgate was determined to be the least problematic potential bidder, with surface care and the markets of Greece and Australia being the only areas for potential issues, but equally these could be remedied. To conclude, Wood states his belief that P&G’s chances of a successful acquisition bid are ‘slim’, while Unilever could well pursue the acquisition process, despite still being in turnaround mode. On the other hand, he also states that while anti-trust laws should not prove to be a major obstacle for Colgate-Palmolive, the expected £40m price tag for the business is probably too much, making it a more likely candidate for a merger process.

Vistakon Medical Device Company Intelligence Report 2011
Vistakon is focused on investing in innovation, building the Acuvue brand and fortifying its position as the worldwide leader in vision care. The company's growth strategy is to capitalise on the global contact lens market's huge potential. Vistakon believes it has strong competitive advantages in the global contact lens market. These include its proprietary manufacturing platforms, which enable it to produce high volumes of lenses; its R&D organisation, which it believes has the highest level of investment in the industry; and the strong market recognition of its Acuvue brand. As contact lenses are non-reimburseable medical devices, purchase decisions are influenced by the consumer and eye care professionals, so brand recognition is very important. The company therefore has a dual marketing approach for both the professional and the consumer. For professionals, the Johnson & Johnson Vision Care Institute is central to its approach. This training and education centre operates on the same principles as J&J's Ethicon Endo-Surgery Institute and has expanded overseas to include sister institutes in 13 cities around the globe. The institute has trained more than 50,000 eye care professionals worldwide. In addition to its current strong position, the company believes it will see continued improvements in its business performance through growth in the contact lens market due to increased demand for products and the current under-penetration of contact lenses in both the developed and developing world. In order to achieve growth in the entire global market, the company has a strategy of developing products to suit regional needs, for example, its 1-Day Acuvue Define lenses for women in the Asia Pacific region. Vistakon believes the BRIC countries (Brazil, Russia, India and China) offer a significant opportunity for the company and it is specifically targeting the 14-44 age group. In Russia, Vistakon believes it is already the leading supplier of disposable contact lenses and was named the best contact lens manufacturer by the Moscow Optical Exhibtion in 2010. In China, where Vistakon claimed the leadership position in the top three cities in 2009 and plans an aggressive expansion into the top 20 cities, the company estimates the contact lens market will increase to US$1 billion in the next five years.

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