The post-initial-public-offering of Celanese AG is not going to include the cyclic olefin copolymer business operated by Celanese's Ticona unit or Ticona's stake in a fuel-cell development firm.
In a Securities & Exchange Commission filing, Frankfurt, Germany-based Celanese officials said the firm will incur ``significant charges'' in the fourth quarter of 2004, including an ``undetermined impairment loss'' from selling its COC business, which operates under the Topas name.
Ticona's stake in the Pemeas fuel-cell joint venture also is being sold, according to the filing, which was made in advance of the Celanese IPO made by Blackstone Capital Partners of New York. Investment firm Blackstone acquired controlling interest in Celanese last year.
On Jan. 21, Celanese issued 50 million shares of stock at $16 each. The stock was trading for that same price in late trading Jan. 25. Market watchers had expected the stock to debut at between $19 and $21 per share.
Ticona makes Topas at a single site in Oberhausen, Germany. A Topas blend with linear low density polyethylene recently was commercialized in zipper tracks for a Hefty plastic bag product made by Pactiv Corp.
Topas had focused on blister packaging for the pharmaceutical market, but was up against tough competition from PVC, which often is used in with polyvinylidene chloride in blister packs, said Faisal Syed, a market analyst with Chemical Market Resources Inc. consulting firm in Houston.
The COC field is relatively small, with only two other commercial producers worldwide - Nippon Zeon Co. Ltd. and Japanese Synthetic Rubber, both of Tokyo.
Syed said the firms are potential buyers of the Topas business. Syed said Ticona probably was disappointed in the growth rates and profit margins of its COC business.
``The [COC] market has had annual growth of 4-5 percent, which isn't very high for a product that's still in its growth phase,'' he said. ``And Ticona probably expected higher margins, but didn't get them because of high feedstock prices.''
Fuel-cell technology developed by Frankfurt-based Pemeas is expected to be used in cell phones by 2007 and in home heating by 2010. The firm expects to crack the automotive market by 2015.
Ticona's 2004 first-half operating profit plunged 60 percent vs. the year-ago period, to 46 million euros ($60 million), even though sales were up almost 3 percent to 364 million euros ($473 million).
In total, Celanese lost 28 million euros ($36 million) in the first half of 2004, with sales dropping more than 3 percent to about 2 billion euros ($2.6 billion).