Trinseo SA has wrapped up its name game and is looking forward to growth in 2015.
The Berwyn, Pa.-based firm had operated as Styron LLC since 2011, when Boston-based private equity firm Bain Capital LLC paid $1.6 billion for the styrenics businesses of Dow Chemical Co. The firm's holdings include a 50 percent stake in Americas Styrenics, a polystyrene maker based in The Woodlands, Texas.
Styron officially changed its name to Trinseo for the financial market when it launched its initial public offering in June 2014. The name then became official for customers on Feb. 1. In between those events, the firm in October reorganized itself into two business units.
For the first nine months of 2014, Trinseo's sales roughly were flat at just over $4 billion. The firm lost almost $38 million in that period after losing almost $33 million in the same period in 2013. On Wall Street, Trinseo's per-share stock price opened in June near $21, but was near $17.30 in late trading Feb. 17.
In spite of these challenges, Trinseo executive Martin Pugh was optimistic in a Feb. 10 phone interview. Although North American PS demand was down in 2014, Pugh said it's come back somewhat in the first quarter and “should be a little bit up” for full-year 2015.
“In the fourth quarter, packaging customers only bought what [PS] they need because they thought the price was going to continue to go down,” he said. North American ABS demand also saw a single-digit increase in 2014, Pugh added.
The global polycarbonate market is “encouraging” after seeing demand grow by 5 percent in 2014, according to Pugh. Styron exited the North American commodity PC market in 2014, but is having its higher-margin PC compounds and blends toll-produced for North American customers by PolyOne Corp.
“Polycarbonate had been in the doldrums for three years, with low margins,” he said. “Now, it's healthy with demand driven by automotive, consumer goods, electrical/electronic and building and construction.”
The October re-organization divided Trinseo into Basic Plastics & Feedstocks — including commodity grades of PS, PC and other styrenics — and Performance Materials, which includes rubber and latex, as well as grades of ABS, PC/ABS and polypropylene compounds sold into the automotive, medical and electrical/electronics markets.
Pugh is senior vice president and business president for the Performance Materials unit. He's also overseeing the styrenic polymers and PC businesses until a leader is named for the Basic Plastics & Feedstocks unit. Pugh has 35 years of chemicals and plastics experience, including 20 years spent with Dow Chemical Co. He joined Trinseo in 2013.
The recent drop in global crude oil prices has had a similar impact on many of Styron's products, but Pugh said that, overall, lower oil prices are good for the global economy. “There's more competition with lower prices, but it's also good economically for consumers,” he said.
Pugh added that Trinseo “remains really excited” about the auto market, particularly because of “a big increase” in sales of pickup trucks and other opportunities for lightweighting. The firm's long glass-fiber PP compounds are being used in truck tailgates and other semi-structural parts where they can reduce weight. Trinseo materials also could see 2015 sales gains from the LED lighting field.
