Margin, demand growth will continue in 2011 - US Rockwood

16 February 2011 20:17  [Source: ICIS news]

HOUSTON (ICIS)--US specialty chemicals maker Rockwood Holdings expects improved margins in most of its business segments in 2011, largely because of demand growth and continued price gains, the company said on Wednesday.

Rockwood’s core business, which includes lithium and surface treatment chemicals, will continue to grow in 2011, as will its titanium dioxide (TiO2) market, said chief executive Seifi Ghasemi during the company’s quarterly earnings conference call.

Although a flat US construction market diminished the company’s performance additives’ adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), Ghasemi said price gains in its TiO2 business would be substantial this year.

Price increases of 10% or more are expected, he said, because of raw material cost increases and continued tight supply of TiO2. “We are running our TiO2 at 100% of capacity. We are totally sold out,” he said.

“As [TiO2] demand grows, we obviously have to walk away from our lower-margin business,” he said, adding that synthetic fibres will be a larger focus versus more traditional downstream markets.

Rockwood’s 2010 fourth-quarter net income soared to $109.6m (€81.1m) from $10.8m in the 2009 fourth quarter, boosted by a $76.5m tax benefit related to a divestment.

Ghasemi said Rockwood’s lithium prices could rise in 2011, with strong demand continuing to come primarily from its battery-grade products used in consumer electronics, computers and power tools.

He said the company’s ceramics business would continue to see margins of about 30%.

($1 = €0.74)

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