Epoxy
February 15, 2021
Epoxy Comments from Huntsman’s Investors Call
Angel Castillo — Morgan Stanley — Analyst
Hi, good morning. Thanks for taking my question. Peter I was just hoping you could unpack a little bit more on the Advanced Materials segment in your outlook and what you’re seeing. From an end market perspective you talked about aerospace, but if you could touch on some of the other end markets that you have and what you’re seeing? And on top of that, I guess, I was also wondering, you talked about that segment as a core platform for growth in M&A and there is a lot going on right now with some of the acquisitions that you’ve recently done. So curious from a capacity perspective operationally, is there any constraints as to limitation of how much more M&A you can do kind of in the near term for that segment? Do you kind of take a pause until you’ve done Gabriel, fully integrated or is there an opportunity to do something kind of near-term still?
Peter R. Huntsman — Chairman of the Board, President and Chief Executive Officer
Well, yes, I think Angel that’s an excellent question. I think that as we look at Advanced Materials, in the script, we talked about it being a platform for internal investment and organic expansion. And so I think that we see a lot of opportunities, particularly around power and around electronics. So when you think of the power grid system that has to be built, if you’re going to be connecting all of these windmills and solar plants and all these new sources of electricity, the build out of a smart grid or just the addition of a dumb grid I guess, either one of those a smart grid or a dumb grid, we’re going to be involved in the build out of the electronic infrastructure, the power lines, the transformers and so forth. That’s a very profitable end of our business. And we also look at the electronic side of what we’re doing.
This is an area as well when you think about the shortages that are taking place around the automotive industry. It is an excellent question that was earlier asked and you look at the average electric vehicle is going to take 4 times the amount of semiconductor capacity as an ice vehicle. So as you look at those end-use applications, I think that those are all areas of growth and a lot of what we are going to be doing in Advanced Materials. These are new fields. I mean as we look at our Performance Products and we look at expanding some of our products that will be going into the battery technology. These are areas where you got and you buy competition, because nobody is doing it right now. And we think that we’ve got an expertise, a lot of the amines that potentially will be used for carbon capture and sequestration.
We’ve talked in the past about our ability to produce nano technologies around carbon and this part of carbon capture and so forth. A lot of these areas are areas that we have technology, we have know-how and we want to develop these end use markets and we think that with this transition going into this greener economy, not only will there be some sort of a subsidy and help in doing some of those sort of things. Food taxes and so forth, but we think that the market will be there as well. So when we talk about internal opportunities for Advanced Materials and Performance Products and the other divisions as well, we see real opportunities there.
But again I’d also just say that with the recent acquisitions we’ve done, areas around curing agents in coatings, again we have an opportunity to take those acquisitions and to give our existing customer base and our expanding customer base a wider portfolio of services, products, formulations, components and I think that, as I look at the Advanced Materials, yes, I see there is a potential platform for more M&A, but I’m especially excited to see about what it could do by improving the bottom line, by integrating what we purchased, by becoming more streamlined in the costs and by capitalizing on small but manageable expansions that will be going into new and bolder opportunities going forward.
February 15, 2021
Epoxy Comments from Huntsman’s Investors Call
Angel Castillo — Morgan Stanley — Analyst
Hi, good morning. Thanks for taking my question. Peter I was just hoping you could unpack a little bit more on the Advanced Materials segment in your outlook and what you’re seeing. From an end market perspective you talked about aerospace, but if you could touch on some of the other end markets that you have and what you’re seeing? And on top of that, I guess, I was also wondering, you talked about that segment as a core platform for growth in M&A and there is a lot going on right now with some of the acquisitions that you’ve recently done. So curious from a capacity perspective operationally, is there any constraints as to limitation of how much more M&A you can do kind of in the near term for that segment? Do you kind of take a pause until you’ve done Gabriel, fully integrated or is there an opportunity to do something kind of near-term still?
Peter R. Huntsman — Chairman of the Board, President and Chief Executive Officer
Well, yes, I think Angel that’s an excellent question. I think that as we look at Advanced Materials, in the script, we talked about it being a platform for internal investment and organic expansion. And so I think that we see a lot of opportunities, particularly around power and around electronics. So when you think of the power grid system that has to be built, if you’re going to be connecting all of these windmills and solar plants and all these new sources of electricity, the build out of a smart grid or just the addition of a dumb grid I guess, either one of those a smart grid or a dumb grid, we’re going to be involved in the build out of the electronic infrastructure, the power lines, the transformers and so forth. That’s a very profitable end of our business. And we also look at the electronic side of what we’re doing.
This is an area as well when you think about the shortages that are taking place around the automotive industry. It is an excellent question that was earlier asked and you look at the average electric vehicle is going to take 4 times the amount of semiconductor capacity as an ice vehicle. So as you look at those end-use applications, I think that those are all areas of growth and a lot of what we are going to be doing in Advanced Materials. These are new fields. I mean as we look at our Performance Products and we look at expanding some of our products that will be going into the battery technology. These are areas where you got and you buy competition, because nobody is doing it right now. And we think that we’ve got an expertise, a lot of the amines that potentially will be used for carbon capture and sequestration.
We’ve talked in the past about our ability to produce nano technologies around carbon and this part of carbon capture and so forth. A lot of these areas are areas that we have technology, we have know-how and we want to develop these end use markets and we think that with this transition going into this greener economy, not only will there be some sort of a subsidy and help in doing some of those sort of things. Food taxes and so forth, but we think that the market will be there as well. So when we talk about internal opportunities for Advanced Materials and Performance Products and the other divisions as well, we see real opportunities there.
But again I’d also just say that with the recent acquisitions we’ve done, areas around curing agents in coatings, again we have an opportunity to take those acquisitions and to give our existing customer base and our expanding customer base a wider portfolio of services, products, formulations, components and I think that, as I look at the Advanced Materials, yes, I see there is a potential platform for more M&A, but I’m especially excited to see about what it could do by improving the bottom line, by integrating what we purchased, by becoming more streamlined in the costs and by capitalizing on small but manageable expansions that will be going into new and bolder opportunities going forward.
February 15, 2021
Lanxess to Acquire Emerald Kalama
LANXESS signs contract to acquire Emerald Kalama Chemical
CologneFebruary 14, 2021
Specialty chemicals company LANXESS signed an agreement to acquire US-based Emerald Kalama Chemical from affiliates of American Securities LLC. Emerald Kalama Chemical is one of the leading global manufacturers of specialty chemicals especially for the consumer segment.
Emerald Kalama employs worldwide approximately 500 employees and runs three production sites. The company reported 2020 sales of around USD 425 million and EBITDA pre exceptionals of approximately USD 90 million. Around 45 percent of its turnover is generated in North America.
The enterprise value amounts to USD 1,075 million. The transaction will be financed by LANXESS existing liquidity. Closing of the transaction is anticipated in the second half of 2021 and subject to the approval of the relevant regulatory authorities.
By acquiring Emerald Kalama Chemical, LANXESS strengthens its specialty chemical portfolio especially in the Consumer Protection segment and would materially expand into the growth markets food and animal nutrition.
February 15, 2021
Lanxess to Acquire Emerald Kalama
LANXESS signs contract to acquire Emerald Kalama Chemical
CologneFebruary 14, 2021
Specialty chemicals company LANXESS signed an agreement to acquire US-based Emerald Kalama Chemical from affiliates of American Securities LLC. Emerald Kalama Chemical is one of the leading global manufacturers of specialty chemicals especially for the consumer segment.
Emerald Kalama employs worldwide approximately 500 employees and runs three production sites. The company reported 2020 sales of around USD 425 million and EBITDA pre exceptionals of approximately USD 90 million. Around 45 percent of its turnover is generated in North America.
The enterprise value amounts to USD 1,075 million. The transaction will be financed by LANXESS existing liquidity. Closing of the transaction is anticipated in the second half of 2021 and subject to the approval of the relevant regulatory authorities.
By acquiring Emerald Kalama Chemical, LANXESS strengthens its specialty chemical portfolio especially in the Consumer Protection segment and would materially expand into the growth markets food and animal nutrition.
February 15, 2021
Cold Temperatures In Houston
Sub-freezing temps in US Gulf could disrupt plant operations, logistics
Author: Adam Yanelli
2021/02/12
HOUSTON (ICIS)–A cold front making its way across the US this weekend could disrupt plant operations or impact logistics if temperatures spend enough time below freezing.
But the impact on chemical plants along the US Gulf Coast, where sub-freezing weather is rare, could be limited if daytime highs rise above freezing.
Forecasts from the National Weather Service show overnight temperatures in some areas along the US Gulf could fall as low as 14 degrees Fahrenheit (-10 degrees Celsius) on Sunday and Monday nights.
The NWS forecast for Deer Park, Texas, calls for temperatures to drop below freezing on Sunday night and to stay there until Tuesday morning.
Forecasts can still change, and the daily highs could be warm enough to prevent plant shutdowns, said Brian Pruett, senior vice president of polyethylene (PE) and polypropylene (PP) with CDI.
Generally, plants are designed to run within a set range of temperatures, said James Wilson, senior analyst at ICIS. Below that range, some pieces of equipment may not run well and some lines can freeze.
In places such as Russia, companies design plants with cold temperatures in mind, Wilson said. Process lines are heavily insulated or even heat traced.
Such frigid temperatures are rare on the Gulf Coast. It is unlikely that chemical companies adopted such extra steps in the new units that they built during the past decade, said Kimberly Haberkost, director of olefins at CDI.
Idled plants could be more at risk of damage, a producer told ICIS, because they are not generating heat and they could have water in the pipes that could freeze and cause issues.
LOGISTICS, POWER LOSS
Even without any plant shutdowns, icy roads could slow down deliveries and keep workers from getting to the plants.
Freezing rain or sleet could weigh on trees, causing them to fall and possibly take down power lines.
The NWS forecast includes a 60% chance of snow or sleet overnight on Sunday through Monday.
Bitterly cold temperatures are causing logistical issues, as rivers connecting chemical production in the US Gulf with the Midwest region of the country begin to freeze.
PAST COLD-WEATHER SHUTDOWNS
The last time that frigid weather shut down plants on the Gulf Coast was in mid-January 2018.
On 17 January 2018, the temperatures ranged from 20-37 degrees Fahrenheit in Houston, according to the Weather Underground. On 18 January 2018, the range was 26-38 degrees Fahrenheit.
Before that, cold temperatures disrupted operations in 2011, when temperatures were 24-34 degrees Fahrenheit from 2-4 February.
Additional reporting by Al Greenwood and Antoinette Smith
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