Huntsman Corp. has had a busy February — releasing improved financial results for 2014 while announcing a specialty resin expansion in Singapore and the closing of some titanium dioxide capacity in France.
On Feb. 18, the global materials firm — based in The Woodlands, Texas — issued full-year 2014 results, showing that sales grew almost 1 percent vs. 2013 to more than $12.7 billion, while profit more than doubled to $345 million.
The annual sales total includes titanium dioxide and other businesses that Huntsman bought from Rockwood Holdings Inc. for more than $1 billion in late 2013. Those businesses aren't included in the profit total. Pretax profit — including the Rockwood businesses — grew 13 percent in 2014 to almost $1.5 billion.
Sales in the firm's polyurethanes unit grew more than 1 percent to just over $5 billion, although Huntsman's pigments and additives sales — including Rockwood's TiO2 business — dipped 3 percent to just under $2.7 billion.
Pretax profit for the firm's PU unit slipped 2 percent to $728 million in 2014, while pigments and additives' pretax profit improved 5 percent to $225 million.
“2014 was a remarkable year for us,” President and CEO Peter Huntsman said in a news release. “We have a number of initiatives underway that will improve the competitiveness and strength of our entire company… Notwithstanding near-term headwinds and shocks to the business landscape, such as meaningful movements in foreign currency rates and lower priced oil, I believe we are well positioned to deliver increased earnings, an improvement in free cash flow and increased shareholder value over the next several years.”
The specialty resin expansion will add 55 million pounds of annual capacity for polyetheramine (PEA) in Singapore, effectively doubling Huntsman's capacity for the material there. The $100 million project will include backward integration to produce polyethers from locally-sourced feedstocks.
Construction of the expansion is set to be done by the end of 2016. PEA resins are used to improve the properties of paint, adhesives, composites and other materials used in home decoration, cars, sports equipment and various other products. Huntsman also makes PEA at plants in Texas and Wales.
The Singapore expansion “will help us respond more quickly to customer demand, not only in the rapidly-growing Asia market, but also around the globe,” performance products president Stu Monteith said in a news release.
The titanium dioxide capacity cut would remove about 220 million pounds of annual production of the material – widely used as a whitener in plastics and other materials - from a Huntsman plant in Calais, France. The move will impact the “black end” of TiO2 production, which is the start of the process. The plant's TiO2 “white end” — involved in finishing and packing of the material — will continue to operate, with about 100 employees. The capacity reduction will result in annual savings of $35 million.
“With the recent deterioration in (TiO2) industry conditions, we have reviewed our manufacturing network,” Peter Huntsman said in a news release. “We are confident that by rationalizing our capacity, we can continue to meet our customers' needs and improve our competitiveness.”
The TiO2 capacity cut is in addition to Huntsman's December announcement that it would be cutting approximately 900 jobs from its pigments and additives unit by mid-2016. That move is expected to create annual savings of $130 million.
On Wall Street, Huntsman's per-share stock price was above $28 in September, but had declined to near $23.60 in early trading Feb. 18.
