US HB Fuller looks to global expansion despite recession

01 April 2009 18:28  [Source: ICIS news]

HOUSTON (ICIS news)--HB Fuller sees amid the economic crisis a chance to expand into new international markets, the US sealants maker said on Wednesday.

“We have to make sure that we buy at the right price, but I think this environment is full of opportunity,” company CEO Michele Volpi said in an earnings conference call.

HB Fuller’s first-quarter net income fell 66.5% from year-ago levels, but the company said it expects slight improvement for the duration of 2009 due to global investments.

One such investment is HB Fuller’s recent agreement to acquire Nordic Adhesives, done to expand the company’s European presence.

“I disagree with some of my colleagues that are hunkering down and saying growth plans don’t exist,” Volpi said.

“For example, Nordic will help us to accelerate our global market penetration, especially within the packaging market. They’ve established a lot of credibility in the European market for delivering unique solutions, and they will provide us a platform from which to develop our growth plans.”

Additionally, HB Fuller said it had recently opened a new laboratory in China and was in the planning stages of expanding operations in Egypt and the Middle East.

In the short-term, Volpi reiterated that the company expected 2009 full-year revenue to decline 10-to-12% from 2008 due to the lack of an expected demand recovery in all of the company’s business segments.

However, some slight recovery could occur in the second half of the year as more benefits of lower material costs are realized and the current inventory destocking cycle concludes, Volpi said.

“Like most companies, we had a difficult time controlling inventory as demand contracted sharply in the last quarter of 2008,” Volpi said. “But we are working to maintain a disciplined approach to pricing to offset that as best we can.”

The company reduced its first-quarter operating expenses by about 1% and would search for methods to further reduce operating expenses in the coming quarters, Volpi said.

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By: Ben DuBose
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