DyStar insolvency may spur textile chem consolidation - Huntsman

04 November 2009 15:35  [Source: ICIS news]

TORONTO (ICIS news)--The insolvency of textile chemicals major DyStar could lead to further consolidation within the industry, Peter Huntsman, chief executive of US chemicals major Huntsman, said on Wednesday.

Germany-based DyStar, which filed for insolvency in late September, is one of the main competitors of Huntsman in the textile chemicals market.

“Longer-term, [the DyStar insolvency] may lead to further consolidation in the textiles dyes industry, reduce manufacturing capacity and possibly help stabilise pricing,” Huntsman told analysts during the company’s third-quarter results conference call.

However, in the short-term, an insolvency on the scale of DyStar typically creates market confusion and erratic behaviour, he said.

Huntsman noted that third-quarter earnings in the company’s textile effects segment were disappointing, partly due to a sequential decrease in selling prices from the second quarter, on the back of competitive pressure.

However, demand was recovering, despite seasonal textile mill shutdowns in Europe during the summer months, “indicating a positive trend for the economic recovery,” Huntsman said.

The company said it was seeing signs of recovery in Asia, as well as inventory builds in automotive and specialty textiles segments, he said.

Also, Huntsman remained on track to cut fixed costs in its textiles chemicals segment by $60m by the end of the year, he added.

The company this year relocated the headquarters of its global textiles division to Singapore from Europe.

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By: Stefan Baumgarten
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