The Urethane Blog
Everchem Updates
VOLUME XXI
September 14, 2023
Everchem’s exclusive Closers Only Club is reserved for only the highest caliber brass-baller salesmen in the chemical industry. Watch the hype video and be introduced to the top of the league: — read more
August 15, 2023
Azelis Appoints Todd Cottrell to Succeed Frank Bergonzi as CEO of Azelis Americas
August 14, 2023 11:35 AM Eastern Daylight Time
ANTWERP, Belgium–(BUSINESS WIRE)–Regulatory News:
Azelis Group NV (“Azelis” or the “Company”) (Brussels:AZE), a leading global innovation service provider in the specialty chemicals and food ingredients industry, announces that Todd Cottrell will assume the role of CEO of Azelis Americas when Frank Bergonzi retires on September 30, 2023. To ensure a seamless transition, Frank will support Todd with onboarding into his new role, and subsequently will remain available as a consultant to contribute to Azelis’ growth strategy in the Americas through the end of 2025.
Todd brings more than 30 years of expertise and industry knowledge that span both technical and executive roles. He has worked for some of the global leaders in the CASE (coatings, adhesives, sealants and elastomers) industry, his last position having been Managing Director Americas for a large European manufacturer. Over his extensive career, Todd also served in regional director and regional president roles in France and China, as well as multiple industry board positions. Todd holds BSc in Chemical Engineering from Michigan Technological University and an MBA from Duke University, both in the USA.
As CEO of Azelis Americas, Todd will be responsible for driving growth through the development of principal partnerships, market expansion, both organic and inorganic, operational excellence within all market segments, and digital, innovation, and sustainability strategies that drive value for our principals and customers.
Frank, who has led Azelis in the Americas for over seven years, first as CEO & President of KODA Distribution, and afterward as CEO of Azelis Americas following the Group’s acquisition of KODA in 2015, has decided to retire after a 40-year career. During his tenure in Azelis, Frank has led the Americas region to record growth, both organically and through M&A. Azelis Americas has seen both new market segment additions as well as geographical expansion in this period. The business has become the leading innovation service provider for the specialty chemicals and food ingredients industry in the Americas, growing from $725 million in revenue at the end of 2015 to $1.7 billion in 2022. Seven acquisitions have been completed in the Americas since 2015, and the footprint has grown from the US and Canada to Latin America.
Dr. Hans Joachim Müller, Azelis Group CEO, comments:
“Under Frank’s leadership, we have more than doubled our revenue in the Americas and established a presence in five new countries spanning North and South America. I’d like to thank Frank for his tireless dedication and passionate leadership and wish him all the best in his retirement. Frank’s expertise will continue to remain highly valuable, as he continues to support the broader operations through the end of 2025.
At the same time, we welcome Todd, who brings a wealth of experience in specialty chemicals and in the CASE market in particular, which is our largest segment in the Americas. He has substantial specialty supplier experience and a good perspective on the role of the distribution channel. I am excited that he is taking the reins from Frank to lead our operations in the Americas.”
Frank Bergonzi, CEO and President, Azelis Americas, adds:
“Todd brings strong business acumen and CASE industry experience as well as passion, enthusiasm, and an entrepreneurial spirit that will continue to drive value for our principals and customers. With his experience as an Azelis principal and customer at different points in his career, Todd clearly understands the needs of all of our stakeholders and will bring that invaluable insight to Azelis. I look forward to supporting Todd throughout the transition and have every confidence in his ability to lead our talented team to further success.”
Todd Cottrell, incoming CEO, Azelis Americas, comments:
“I am honored to lead the next chapter of the Azelis growth journey in the Americas. Having been both a customer and principal of Azelis, I have first-hand experience with the commercial professionalism, formulation value, and market insights that the Azelis team brings to enable the success of its stakeholders. I’d like to sincerely thank Frank for building this foundation upon which we will continue to grow Azelis’ market presence and value creation throughout the Americas.”
August 14, 2023
ADNOC Could Raise Covestro Bid To $12.6 Billion
By Alex Kimani – Aug 14, 2023, 3:30 PM CDT
Abu Dhabi National Oil Co (ADNOC) has signaled a willingness to raise its informal offer to 60 euros per share for a valuation of $12.6 billion for German plastics and chemicals maker Covestro. The latest offer would represent a premium of nearly 30% to Covestro’s closing share price on Friday.ADNOC last raised its informal offer to 57 euros per share in July, although no final decision has yet been made.
ADNOC appears willing to go on an M&A spree: Abu Dhabi’s national oil company is separately in talks with Austria’s OMV regarding a possible merger of the two companies that could form an entity worth $30 billion.
It’s not clear why ADNOC is interested in buying Covestro, considering how badly the petrochemical business has been doing lately. Earlier in August, Covestro reported a 21%Y/Y fall in second quarter revenues to 3.7 billion euros. Covestro is hardly alone, with U.S. oil and gas giants facing a similar fate. Sluggish consumer demand as well as a deluge of new factories coming online over the past few years means petrochemical margins face a protracted downturn. The situation is so dire that Cologne-based Lanxness AG has called it a “Lehman 2” moment for the chemicals industry.
“It’s been a pretty dramatic downturn. With chemicals oversupplied right now, large oil companies will find other areas to invest in,” Joseph Chang, a New York-based analyst at ICIS, has told Bloomberg.
Over the past decade, Big Oil has relied on petrochemicals as a growth engine, acting as a hedge when oil and gas prices drop and a long-term growth driver in the transition to clean energy. Previously, several Wall Street analysts predicted that oil demand will actually grow over the coming decades primarily driven by petrochemicals demand growth. Indeed, Energy Intelligence is not the only bull here. No less than 10 organizations, including OPEC, Exxon Mobil Corp. (NYSE:XOM), and the Energy Information Administration (EIA), have predicted that global oil demand will actually grow over the next few decades and not shrink as most analysts have forecast.
August 14, 2023
Cash reserves running out for many trucking firms, Werner says
Smaller firms could exit the market more frequently amid higher fuel prices and other costs as well as depressed volumes, according to industry players.
Published Aug. 14, 2023
David TaubeAssociate Editor
Dive Brief:
- Trucks will exit the market more quickly given depletions in cash, Werner Enterprises CEO Derek Leathers told investors on a Q2 earnings call, detailing the carrier’s ability to benefit from the reduced capacity.
- Executives with the carrier believe smaller trucking firms raked in cash amid 2022’s heyday, federal stimulus and lower fuel cost. But now that abundance of cash is now largely exhausted, Leathers said.
- Based on Werner’s internal analytics on how long the average carrier could stay afloat during the downturn, the TL provider thinks “those months are up,” spurring an “accelerated pace” of truck deactivations, Leathers said.
Dive Insight:
Federal data suggests that over 110,000 net deactivations have occurred for nearly a year, Werner reported.
Federal Motor Carrier Safety Administration data showed net truck deactivations for 44 consecutive weeks, Leathers said.
“Now they find themselves in an environment with rising interest rates and their finance costs are higher than ever,” said Leathers, who also serves as the carrier’s president and chairman.
Others are sharing similar observations.
Transportation tech services provider Motive, formerly KeepTruckin, reported that new carrier starts dropped below 10,000 in July, following a “trend of reverting to 2019 levels and marking a 29% decline since the beginning of the year,” according to a monthly economic report.
Many of those exiting fleets are now involving carriers with five or more vehicles, meaning the downturn is expanding beyond early stages when smaller firms were hit hardest, Motive reported.
Gene Graves of the United Shippers Alliance, an organization which negotiates rates with LTL providers and other transportation, projects hardships for carriers given Yellow’s demise and insurance increases.
“Every year there’s always a bunch of small LTL guys” exiting the market, said Graves, the alliance’s executive director. He added that the shakeout could be bigger than most years given the circumstances.
But amid the depressed volume, Graves foresees significant expansion from larger carriers.
“They’re gonna get bigger,” he said. “They have the capacity right now. They’re building new capacity.”
https://www.transportdive.com/news/fmcsa-net-deactivations-2023-trucks/690529/
August 14, 2023
Gulbrandsen commissions its new Tin Catalyst productionplant at its site in Dahej, India.
DAHEJ, GUJARAT, INDIA — August 14, 2023 — Gulbrandsen, a global specialty
chemicals leader, and one of the world’s largest producers of tin catalysts for the
polyurethane foaming industry, has completed the commissioning and safe start-up of
its new Tin Catalyst production plant at its site in Dahej, India. The unit will produce
Stannous Octoate and Stannous Neodecanoate.
Joerg Duebel, Global Business Director for Polyurethane Additives at Gulbrandsen,
commented on the occasion “Thanks to the well-coordinated efforts of our teams across
the globe, we completed the safe start-up of this unit ahead of schedule. This facility
will help us in meeting the growing demand for these products while also strengthening
our commitment to delivering high-quality catalysts to the polyurethane foaming
industry.”
About Gulbrandsen: Gulbrandsen is a manufacturer of industrial chemical
intermediates, fine chemicals and catalysts used in process industries. For more
information, please visit our website at www.gulbrandsen.com.
August 9, 2023
Stepan Company (SCL) Q2 2023 Earnings Call Transcript
Jul. 26, 2023 2:04 PM ETStepan Company (SCL)
Q2: 2023-07-26 Earnings Summary
EPS of $0.53 misses by $0.64 | Revenue of $579.98M (-22.84% Y/Y) misses by $89.88M
Stepan Company (NYSE:SCL) Q2 2023 Earnings Conference Call July 26, 2023 9:00 AM ET
Company Participants
Luis Rojo – VP & CFO
Scott Behrens – CEO, President & Director
Scott Behrens
Good morning, and thank you for joining us today to discuss our second quarter results. I plan to share highlights from our second quarter performance. I will also share updates on our key strategic priorities while Luis will provide additional details on our financial results. The company reported second quarter adjusted net income of $12.1 million. Earnings were significantly impacted by a 19% decline in sales volume versus the all-time record prior year second quarter due to continued demand softness across most of our markets and continued inventory destocking in certain market channels.
In the second quarter, margins in our Surfactant and Polymer segments were only slightly lower versus prior year as a result of less favorable mix, while unit margins for Specialty Products were significantly lower versus prior year due to high-cost inventory and pricing pressure. Gradual volume improvement throughout the quarter within our rigid polyol business was more than offset by destocking activity within our agricultural business. Cash expenses were slightly lower versus prior year due to proactive head count and discretionary expense controls implemented earlier in the year and lower accruals for incentive-based compensation.
For the quarter, adjusted EBITDA was $45.8 million versus $96.7 million in the prior year quarter, primarily driven by the decline in sales volume. Adjusted EBITDA in the second quarter of 2023 was slightly lower than the first quarter of 2023. Second quarter Surfactant operating income was $15.1 million versus $48.2 million in the prior year quarter, primarily due to a 15% decline in global sales volume. In addition, Unit margins were slightly lower due to less favorable product mix, high cost inventory carryover and increased competitive pricing pressure in Latin America.
Polymer operating income was $16.3 million, a decrease of $17.6 million versus the prior year. This decrease was primarily due to a 29% decline in global sales volume, including a 28% volume decline in Rigid Polyols. Specialty Product operating income was $3.8 million versus $9.9 million in the prior year. This decrease was primarily attributable to lower unit margins and sales volume within the medium chain triglycerides product line versus a record prior year.
Luis Rojo
Now turning to Polymers on Slide 7. Net sales were $164.5 million for the quarter, a 31% decrease versus the prior year. Volume decreased 29%, primarily due to a 28% volume decline in region volumes and lower demand in the specialty polyol and businesses. This was partially offset by volume growth in China. The lower demand reflect customer and channel inventory destocking and lower construction-related activities. Selling prices decreased 3% and foreign currency translation positively impacted net sales by 1%. Polymer operating income decreased $17.6 million versus prior year, primarily due to the 29% decrease in global volume. North America and Europe results were both impacted by lower volumes. Asia results improved on increased demand following the reopening of China.
Scott Behrens
Moving to Slide 10, Construction on our new alkoxylation production facility in Pasadena, Texas is approximately 35% complete and has surpassed 500,000 construction hours without an injury. The new estimated capital investment now stands at $265 million. We expect the Pasadena plant to be 90% complete by year-end and to start up in mid-2024. The underlying of consolation business that supports the Pasadena investment continued its strong double-digit volume growth in the first half of the year and at attractive margins.
Scott Behrens
Yes. Thanks, David. With regards to destocking, so the destocking obviously started to happen in Q1, definitely in the polyol side of our business for sure and in, I would say, all segments of our consumer products business. I think when you look back and try to appreciate how much inventory was stuffed throughout the channels. I don’t think anyone had a really good handle on it. What we can say going forward is in the rigid polyol business, we think that the destocking is predominantly behind us, and we’re now starting to get into a normal demand pattern for the second half of the year. I would say the same thing is true in consumer products. The destocking probably bottomed out in late April, May, and we’re now going to be entering a normal stabilized volume pattern going forward.
https://seekingalpha.com/article/4620083-stepan-company-scl-q2-2023-earnings-call-transcript
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