Company News
March 8, 2021
DuPont Acquisition
DuPont to buy Laird Performance for $2.3 bln in electronics materials push
March 8 (Reuters) – DuPont said on Monday it would buy Laird Performance Materials for $2.3 billion from private equity firm Advent International, as it looks to expand its portfolio of advanced electronic materials that is used in areas such as smart and autonomous vehicles and fifth generation telecommunications.
Rapidly increasing demand for these materials also used in high-performance computing, artificial intelligence, and internet of things has led to electronics becoming a key growth area for DuPont.
The company last month forecast full-year profit and revenue above Wall Street expectations on the back of robust demand from chip companies and smartphone makers launching 5G handsets.
Sales in DuPont’s electronics and imaging business, which account for about 20% of total revenue, rose 9% to $1.02 billion in the fourth quarter from a year earlier.
The company, once part of the erstwhile chemical giant DowDuPont, said in February it plans to spend up to $2.5 billion of its $5 billion to $6 billion expected cash on mergers and acquisitions.
It had then said that it was working on two targets, adding it was more biased toward the electronics sector and to the electric vehicle space on the automotive side.
The industrial materials maker said it expects to realize about $60 million in pre-tax run-rate cost synergies by the end of 2024 with the majority realized in the first 18 months after the deal closes, which is expected in the third quarter of 2021.
The estimated one-time cost to achieve these synergies is about $40 million and DuPont expects the deal to be accretive to its operating core earnings margins, free cash flow, and adjusted earnings per share within the first 12 months.
DuPont also said on Monday it approved a new $1.5 billion share buyback program. (Reporting by Arathy S Nair in Bengaluru; Editing by Shailesh Kuber)
March 8, 2021
DuPont Acquisition
DuPont to buy Laird Performance for $2.3 bln in electronics materials push
March 8 (Reuters) – DuPont said on Monday it would buy Laird Performance Materials for $2.3 billion from private equity firm Advent International, as it looks to expand its portfolio of advanced electronic materials that is used in areas such as smart and autonomous vehicles and fifth generation telecommunications.
Rapidly increasing demand for these materials also used in high-performance computing, artificial intelligence, and internet of things has led to electronics becoming a key growth area for DuPont.
The company last month forecast full-year profit and revenue above Wall Street expectations on the back of robust demand from chip companies and smartphone makers launching 5G handsets.
Sales in DuPont’s electronics and imaging business, which account for about 20% of total revenue, rose 9% to $1.02 billion in the fourth quarter from a year earlier.
The company, once part of the erstwhile chemical giant DowDuPont, said in February it plans to spend up to $2.5 billion of its $5 billion to $6 billion expected cash on mergers and acquisitions.
It had then said that it was working on two targets, adding it was more biased toward the electronics sector and to the electric vehicle space on the automotive side.
The industrial materials maker said it expects to realize about $60 million in pre-tax run-rate cost synergies by the end of 2024 with the majority realized in the first 18 months after the deal closes, which is expected in the third quarter of 2021.
The estimated one-time cost to achieve these synergies is about $40 million and DuPont expects the deal to be accretive to its operating core earnings margins, free cash flow, and adjusted earnings per share within the first 12 months.
DuPont also said on Monday it approved a new $1.5 billion share buyback program. (Reporting by Arathy S Nair in Bengaluru; Editing by Shailesh Kuber)
March 5, 2021
Flexible Foam Shortages Explained
We’ve had a lot of questions about why there is a shortage of foam, so here’s a simple explanation. I hope it answers your questions!
Flexible Foam Production and Fabrication
Because foam is light and bulky, it is not efficient to ship very far to the various end users such as furniture manufacturers, bedding, seating and other customers. Consequently the many foam plants are located close to the end use markets and are spread around North America.
Foam is made using a number of chemicals, but the main two are polyol and toluene diisocyanate (TDI). It takes roughly two parts of polyol and one part of TDI to make foam. Foam plants buy these raw materials and have them delivered by either railcars or tank trucks. A typical foam plant will have storage tanks that are big enough to offload a few railcars (180,000 lbs each) or tank trucks (45,000 lbs each). They don’t carry a large inventory of these raw materials, but depend upon a steady and timely supply of railcars and trucks in order to produce the foam for their customers.
Polyol Supply
There are a few different grades of flexible foam polyol, but the most common is made from three primary raw materials–glycerine (the initiator), ethylene oxide (EO) and most of all, propylene oxide (PO). PO is by far the main ingredient.
There are a handful of large polyol producers with a few plants in the midwest but most are on the Gulf coast–close to the propylene oxide producers.
The Propylene Oxide Bottleneck
PO is produced by three companies in North America, LyondellBasell, Dow, and Indorama. There are five physical plant locations, with four in Texas and one in Louisiana.
When the pandemic hit last March there was a lot of uncertainty about future demand. The entire furniture-foam-polyol-PO chain of production slowed to a crawl.
No one predicted that the demand for bedding and furniture would increase while people were in lock down. The industry came back in June hoping to catch up for the lost production in that April May time frame. The industry tried to run at 120% rates to make up for the two lost months, but the PO plants can only run at 100%, so there was not enough to supply everyone what they wanted. PO production issues in the Fall curtailed polyol production even further to the point that the producers had to put together allocations for their customers. No one could get everything that they needed.
Then the winter storm hit the gulf coast in mid February. When a hurricane is expected, the petrochemical industry gets prepared and often shuts down their operations in advance, weathers the storm, then gets back up and running safely and in a relatively short time frame. This storm caught everyone unprepared and many plants lost power while they were still running. It’s a tribute to the industry and all the plant engineers and employees that there were no major accidents during this abrupt and unexpected shutdown. Lines in the plants froze. Power, steam, nitrogen, and hydrogen supplies were lost. All of the propylene oxide plants were shut down. It was almost like an unexpected Cat 5 hurricane hit all of Texas in the middle of the night.
Restarting those plants first requires the utilities and power. The damage can’t be assessed until services like steam and nitrogen are restored (and in many cases, they’re still down). Then all the lines need to be inspected and damage repaired. The plants will start at reduced rates and may take months to get back up to full rates. Meanwhile, the entire polyol inventory pipeline is empty and needs to be refilled.
There is still a lot of uncertainty about the timing for the restart of the foam industry. The situation literally changes every day as the companies assess the damage and work on repairs so the units can be restarted safely. We post daily updates here on the Urethane Blog, so check us out regularly for more information.
TDI
The TDI story is similar to propylene oxide except that there are only two domestic producers and two physical plant locations. Supply is supplemented by some imports. Those plants are located in Texas and Louisiana and were also affected by the winter storm.
Now you know why the wait time for a new chair is at least 16 weeks and may get even longer!
March 5, 2021
Flexible Foam Shortages Explained
We’ve had a lot of questions about why there is a shortage of foam, so here’s a simple explanation. I hope it answers your questions!
Flexible Foam Production and Fabrication
Because foam is light and bulky, it is not efficient to ship very far to the various end users such as furniture manufacturers, bedding, seating and other customers. Consequently the many foam plants are located close to the end use markets and are spread around North America.
Foam is made using a number of chemicals, but the main two are polyol and toluene diisocyanate (TDI). It takes roughly two parts of polyol and one part of TDI to make foam. Foam plants buy these raw materials and have them delivered by either railcars or tank trucks. A typical foam plant will have storage tanks that are big enough to offload a few railcars (180,000 lbs each) or tank trucks (45,000 lbs each). They don’t carry a large inventory of these raw materials, but depend upon a steady and timely supply of railcars and trucks in order to produce the foam for their customers.
Polyol Supply
There are a few different grades of flexible foam polyol, but the most common is made from three primary raw materials–glycerine (the initiator), ethylene oxide (EO) and most of all, propylene oxide (PO). PO is by far the main ingredient.
There are a handful of large polyol producers with a few plants in the midwest but most are on the Gulf coast–close to the propylene oxide producers.
The Propylene Oxide Bottleneck
PO is produced by three companies in North America, LyondellBasell, Dow, and Indorama. There are five physical plant locations, with four in Texas and one in Louisiana.
When the pandemic hit last March there was a lot of uncertainty about future demand. The entire furniture-foam-polyol-PO chain of production slowed to a crawl.
No one predicted that the demand for bedding and furniture would increase while people were in lock down. The industry came back in June hoping to catch up for the lost production in that April May time frame. The industry tried to run at 120% rates to make up for the two lost months, but the PO plants can only run at 100%, so there was not enough to supply everyone what they wanted. PO production issues in the Fall curtailed polyol production even further to the point that the producers had to put together allocations for their customers. No one could get everything that they needed.
Then the winter storm hit the gulf coast in mid February. When a hurricane is expected, the petrochemical industry gets prepared and often shuts down their operations in advance, weathers the storm, then gets back up and running safely and in a relatively short time frame. This storm caught everyone unprepared and many plants lost power while they were still running. It’s a tribute to the industry and all the plant engineers and employees that there were no major accidents during this abrupt and unexpected shutdown. Lines in the plants froze. Power, steam, nitrogen, and hydrogen supplies were lost. All of the propylene oxide plants were shut down. It was almost like an unexpected Cat 5 hurricane hit all of Texas in the middle of the night.
Restarting those plants first requires the utilities and power. The damage can’t be assessed until services like steam and nitrogen are restored (and in many cases, they’re still down). Then all the lines need to be inspected and damage repaired. The plants will start at reduced rates and may take months to get back up to full rates. Meanwhile, the entire polyol inventory pipeline is empty and needs to be refilled.
There is still a lot of uncertainty about the timing for the restart of the foam industry. The situation literally changes every day as the companies assess the damage and work on repairs so the units can be restarted safely. We post daily updates here on the Urethane Blog, so check us out regularly for more information.
TDI
The TDI story is similar to propylene oxide except that there are only two domestic producers and two physical plant locations. Supply is supplemented by some imports. Those plants are located in Texas and Louisiana and were also affected by the winter storm.
Now you know why the wait time for a new chair is at least 16 weeks and may get even longer!
March 4, 2021
Composites Canada Acquires Airheart Distributing
Airheart is an authorized distributor of Martin G. Scheufler and Hexion product lines which feature resin systems for the wind, marine, aerospace and sporting good end markets.
Edited by Grace Nehls Assistant Editor, CompositesWorld
Composites Canada (Mississagua, Ontario, Canada), a distributor of what is said to be Canada’s largest selection of composites materials, announced on Feb. 26 that it has acquired Airheart Distributing Inc. (Hamilton, Ontario).
Airheart is an authorized distributor of Martin G. Scheufler (MGS) and Hexion (Columbus, Ohio, U.S.) epoxy resins in North America. Composites Canada notes that the MGS and Hexion product lines feature high-performance, versatile and user-friendly resin systems for light aircraft, sporting good, marine structures and wind energy manufacturing. Composites Canada says the Airheart philosophy and high customer service standards will be maintained under the acquisition and the business will continue to operate as Airheart Distributing Inc.
https://www.compositesworld.com/news/composites-canada-acquires-airheart-distributing
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