Autos to drive recovery, limited by weak construction - US Solutia

27 April 2010 18:39  [Source: ICIS news]

HOUSTON (ICIS news)--US specialty chemicals producer Solutia expects the automobile end market to continue recovering, increasing demand for the company's glass films and interlayers, but commercial construction will likely remain weak, executives said on Tuesday.

Solutia produces polyvinyl butyral (PVB), which is used to make safety glass. Solutia also produces window films used for tinting.

The company quoted a forecast from consultancy firm JD Powers and Associates, which predicted that 2010 automobile production could reach 65.6m units worldwide, up roughly 10% year over year.

In addition to increased production, stricter fuel-efficiency standards could also increase demand for PVB, according to the company.

Solutia makes a line of PVB that helps dampen outside noise. Automobiles are becoming lighter to meet stricter fuel-efficiency standards, a trend that also makes the inside cabins noisier, said Jim Sullivan, Solutia's chief financial officer. He made his comments during an earnings conference call.

With the auto segment in mind, Solutia established a window-tinting deal with US car club AAA, said Jim Voss, chief operating officer. Members of the club could receive discounts if they bought Solutia window tinting from their automobiles.

Solutia also makes window films for buildings, and that segment could benefit from energy-efficiency regulations, Voss said. In particular, Solutia makes films that help keep buildings cool during the summer and warm during the winter, he said.

Regarding PVB, demand in Europe was increasing at double-digit rates for the company's acoustic line for buildings, Voss said.

In fact, Solutia recently expanded its plant in Ghent, Belgium, to help meet the expected increase.

However, Solutia expected the commercial construction end market to remain challenged, with no worldwide recovery expected anytime soon.

"We see, for the time being, softness in architectural," said CEO Jeffry Quinn. That could change after three to four years, he noted.

For more on Solutia visit ICIS company intelligence
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By: Al Greenwood
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