Celanese CEO not worried by higher feedstock costs

01 February 2011 19:37  [Source: ICIS news]

HOUSTON (ICIS)--Celanese chief executive David Weidman said on Tuesday that he worried little over higher raw material costs during the final quarter of 2010.

Contract prices for methanol and ethylene rose 20% or more during the quarter, raising prices for the company's flagship product acetic acid and its major derivative, vinyl acetate monomer (VAM).

But the feedstock hikes had little negative impact on Celanese's acetyls division, which showed "significantly improved performance" during the quarter and the full year, Weidman said.

"I don't lose a minute of sleep over raw material escalations or de-escalations," Weidman said during an earnings conference call.

The company's acetyls division accounted for 68% of Celanese's operating profits during the final quarter, and 49% of the full-year total.

Celanese posted fourth-quarter 2010 net earnings of $56m (€41m), up from $6m in the same period of 2009, on improved pricing and higher volumes.

Weidman said acetyls demand recovery in North America and Europe during the fourth quarter was particularly strong. He singled out European acetyls pricing, which was also aided by the closing of a plant in France.

"I characterise it as being very healthy and very good," Weidman said of the European acetyls business.

Weidman had hinted in previous earnings calls that Celanese might expand plant capacity in Texas at the company's huge Clear Lake operation, as well as at its growing China operations.

Weidman said on Tuesday that it was doubtful the company would publicly comment on such moves.

($1 = €0.73)

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By: Lane Kelley
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