Hüls expansive following production turnaround

05 June 1996 00:00  [Source: ICB]

With a 47% improvement in productivity in its chemical divisions, Hüls is looking to the US, Korea and Taiwan to expand its international profile.

Hüls is planning to bring its core business into a 'wider international dimension' while 'greatly accelerating the growth curve', said chairman Erhard Meyer-Galow at the annual press meeting in Düsseldorf. The decision follows the restructuring of production and an improvement of 47% in productivity in its chemical divisions over the past two years.

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The Marl-based subsidiary of the Veba energy group plans to double the proportion of group sales from North America and Asia over the next 15 years, lifting the US share of turnover to 30%, the Asian share to 20% of the total, while retaining 50% of sales in Europe. 'We will expand strongly in the US,' said the chairman, adding that the emphasis in Asia will be mainly on Korea and Taiwan, rather than China.

While still entering joint ventures and strategic alliances where it does not have a leading market share, Meyer-Galow said Hüls will mainly pursue acquisitions to boost its position in markets where it is already a leading player. This includes around 50% of its current portfolio. He said special emphasis will be placed on expanding its non-cyclical businesses.

According to Meyer-Galow, a number of products in the speciality chemicals division, which includes intermediates, coatings, raw materials, colorants, dispersions, raw materials for adhesives, technical polymers and silicones, are in this category, along with segments of the performance products division, to which surfactants, industrial additives and superabsorbers belong.

The electronic materials business, part of US-based MEMC, which claims to be the largest wafers producer outside Japan, will receive half of this year's DM1.8bn ($1.2bn) capital spending budget. However, restructuring is to continue as around 20% of Hüls' portfolio is still not returning an adequate profit, and could be sold off or shut down, said Meyer-Galow. Last year, rubber activities were sold to Bayer and the PVC business spun off to form Vestolit. Polyolefins production was transferred to sister firm, Veba Oel. The PVC business returned to profit in 1995 and is 'performing better than the market'. Acrylic glass subsidiary Röhm, which lost DM220m in 1995, is undergoing restructuring but there are no plans to sell it.

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