Hexion Q3 shows epoxy, phenolic specialties shift
14 November 2007 22:35 [Source: ICIS news]
HOUSTON (ICIS news)--Hexion Specialty Chemicals' third-quarter results for its epoxy and phenolic resins business benefited from a shift toward higher-margin specialty products, a company executive said on Wednesday.
Hexion is focused on moving downstream into specialty markets, absorbing more of its feedstock bisphenol-A (BPA) and epichlorohydrin (ECH) capacity into high-margin product lines such as composites, said chief executive Craig Morrison during a conference call with analysts.
Morrison said the product shift includes selling more solid epoxy resins as well as moving further downstream into specialty epoxy and phenolic resins.
One of Hexion’s main competitors in the epoxy resins market, Dow Chemical, recently moved to expand its downstream specialty resins business with the acquisition of three formulators.
Third-quarter results for Hexion’s epoxy and phenolic resins business were driven by a 13% sales gain due to price and product mix.
A 5% sales loss due to lower volumes was balanced out by positive currency effects, resulting in a net third-quarter sales gain of 13% in the segment.
Asked if the company was sacrificing market share in order to shift downstream and protect margins, Morrison replied, “Absolutely. We do this on a measured basis as a market leader in our segments.”
Morrison said the company’s strict approach to pricing has resulted in some volume declines in specific areas. He added that weakness in North American housing has slowed some product sales.
By: David Barry
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