Materials firms faced sales struggles in '12

By Frank Esposito
Senior Staff Reporter

Published: January 31, 2013 4:57 pm ET
Updated: January 31, 2013 5:09 pm ET

Related to this story

Topics Topics, Materials, Nylon 6/6, Suppliers, Materials Suppliers, Financial

AKRON, OHIO -- 2012 wasn't a great year for plastic-related sales at Dow Chemical Co., while full-year plastics results were mixed at DuPont Co. and Celanese Corp. and trended up at Omnova Solutions Inc.

Sales in Dow's Performance Plastics unit — including its polyethylene, elastomers and packaging businesses — fell almost 11 percent to $14.5 billion in 2012, as pretax profit slid 12 percent to just over $3 billion. The firm's Performance Materials business — including polyurethane and epoxies — saw 2012 sales drop by 7 percent to $13.6 billion, while the unit's pretax profit plummeted more than 40 percent to just over $1 billion.

In spite of the declines, those two units remained Dow's two largest, based on annual sales. The units accounted for almost half of Dow's 2012 sales total of $56.8 billion. That total was down 5 percent from 2011, and the firm's profit fell more than 60 percent to $1.1 billion in the same comparison. The profit dive was greatly impacted by a fourth-quarter restructuring charge of almost $1 billion.

The second half of 2012 "saw significant deterioration in the markets we serve, particularly in China," Dow Chairman and CEO Andrew Liveris said in a Jan. 31 news release. "In response, Dow identified and took aggressive action to mitigate the effects of a slow-to-no-growth global environment."

For Midland, Mich.-based Dow, that "aggressive action" includes the planned closing of 20 plants that employs a total of 2,400. Plastics materials plants in Belgium and Japan are among those to be closed. The firm also in December said that in the next 12 months it would sell off businesses with $1 billion in annual revenue.

Annual sales for the Performance Materials unit of Wilmington, Del.-based DuPont fell 5 percent to $6.4 billion, as the unit's pretax operating income jumped 21 percent to more than $1.1 billion. The unit includes DuPont's nylon resin and compounds businesses, as well as other specialty resins.

For Performance Materials in the fourth quarter, stable packaging markets and strong demand in the North American automotive market were partially offset by softness in the industrial and electronics markets and a weak Europe, officials said in a Jan. 29 news release.

Company-wide, DuPont's sales were up 3 percent to almost $35 billion, although the firm's profit tumbled almost 20 percent to less than $3 billion. In November, officials announced plans to cut 1,500 jobs — about 2 percent of the company's work force — in the next 12-18 months.

"DuPont stands stronger today than it did a year ago," DuPont Chairman and CEO Ellen Kullman said in the release. "Our segments delivered innovation, productivity and integration cost synergies. This, coupled with a record year in new product introductions, has strengthened our market position."

Dallas-based Celanese saw a similar picture with its Advanced Engineered Materials unit, which includes its market-leading acetals business. AEM sales slipped almost 3 percent to less than $1.3 billion, but operating profit surged more than 13 percent to $86 million.

In the fourth quarter, the unit "delivered growth...despite a challenging economic environment in Europe and normal seasonality," officials said in a Jan. 28 news release. Total corporate sales at Celanese fell 5 percent to $6.4 billion in 2012, as profit remained roughly flat at $605 million.

"Celanese completed 2012 with strong fourth quarter results reflecting the breadth of our global footprint," chairman and CEO Mark Rohr said in the release. The firm also showed improved financial results even with "a challenging economic environment and continued trough-like demand for acetyl products and derivatives, he added.

At Omnova in Fairlawn, Ohio, total sales for 2012 fell 6 percent to $1.13 billion, but the firm showed a profit of almost $28 million after losing almost $3 million in 2011.

"During the year, we made structural improvements in our business portfolio, and took many other positive actions that drove continued improvement in our full-year profitability," Chairman and CEO Kevin McMullen said in a Jan. 22 news release.

Sales in Omnova's specialty chemicals business — including emulsion polymers — fell almost 6 percent to just over $521 million. Operating profit in Performance Chemicals — including specialty chemicals — dropped almost two percent to just under $90 million.

Omnova's sales of laminates and performance films - including PVC-based products - grew 7.5 percent to $144 million. Fourth-quarter laminate sales grew across most market segments led by flooring, appliances, kitchen and bath, store fixtures and recreational vehicles, officials said. Coated fabrics sales - including products using PVC and polyurethane — increased almost 3 percent for the year to $117 million.

The firm's Engineered Surfaces unit — which includes those two businesses — posted a 2012 operating profit of $9.3 million after recording an operating loss of $3.1 million in 2011.

"As we look forward to 2013, we are encouraged by a number of actions and market developments that are expected to gain traction starting in the second quarter," McMullen added.

Omnova also "continues to make progress on productivity and cost reduction actions" with more than $8 million of non-raw material improvements expected in 2013, he said.


Comments

Materials firms faced sales struggles in '12

By Frank Esposito
Senior Staff Reporter

Published: January 31, 2013 4:57 pm ET
Updated: January 31, 2013 5:09 pm ET

Post Your Comments


Back to story


More stories

Image

2014 US machinery shipments up 6 percent

November 25, 2014 5:17 pm ET

Through the first nine months of 2014 U.S. shipments of primary plastics equipment — for injection molding, blow molding and extrusion —...    More

Image

Globalization brings sizable growth, primarily in Asia

November 25, 2014 1:40 pm ET

In 1990, the year after Plastics News published our first issue, there were 33,000 injection molding machines sold worldwide. Fast forward to 2013,...    More

Image

Taipei Plas vandal and German firm trade lawsuits

November 25, 2014 1:26 pm ET

Taiwan businessman Karma Tang, who splashed red paint at German firm Baumüller GmbH's Taipei Plas booth, is in a messy legal battle.    More

Image

Plastics News by the year: 1991

November 25, 2014 6:00 am ET

As Plastics News marks its 25th year of publication, we take a year-by-year look back at some of the events, people and curious coincidences that...    More

Image

Obituary: Patsy Beall, 79, industry activist

November 25, 2014 1:18 pm ET

Patsy Beall, a plastics industry activist who worked alongside her husband of 61 years, product designer Glenn Beall, passed away Nov. 22.    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events