27 November 2007 18:20 [Source: ICIS news]
HOUSTON (ICIS news)--US specialty- and water-chemicals company Ashland plans to spend $42m (€28m) on growth projects in China next year, the company said on Tuesday in its annual report.
The expenditures make up the bulk of the $58m that the company plans to spend on growth projects, Ashland said. Total capital expenditures in 2008 will total $210m, up from $154m spent in 2007.
Ashland's expansion into China would diversify its source of revenue, which comes predominantly from North America, its annual report said.
During the fiscal year of 2007, 72% of the company's revenue was generated from its North American operations, Ashland said. Although relatively high, the total represents a 6 percentage-point drop from the fiscal year 2006.
"There are substantial growth opportunities globally, particularly in eastern Europe and China," the company said in its annual report. "Ashland has positioned its businesses to take advantage of various growth opportunities in these fast developing economies and has devoted key resources to realise this growth."
In other news, Ashland reported an operating income of $216m for the fiscal year of 2007, down 27% from $170m reported during the same time last year.
By the company's main segments, operating income for performance materials was $89m, down from $112m reported during the fiscal year of 2006.
Operating income from the company's distribution segment was $41m, down from $120m reported in 2006. Valvoline reported an operating income of $86m, up from a loss of $21m reported in 2006. Water technologies reported an operating income of $16m, up from $14m reported in 2006.
In its quarterly earnings report released in October, Ashland attributed a drop in operating income to the US housing slump.($1.00 = €0.67)
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