08 March 2011 19:56 [Source: ICIS news]
TORONTO (ICIS)--Chemtura aims to boost operating profitability by 23% this year, even though the target is ambitious, since the chemicals sector faces a “potential oil shock” and some end markets are not yet back to pre-recession levels, CEO Craig Rogerson said on Tuesday.
Chemtura is targeting $395m (€284m) for 2011 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), after recording a 25% adjusted EBITDA increase in 2010 over 2009 – to $320m from $257m.
“While a number of industries have recovered [to pre-recession] 2007 levels, several industries are unlikely to do so in 2011,” Rogerson told analysts during his company’s fourth-quarter results conference call.
One market that has not yet fully recovered is building and construction, Rogerson said.
The electronics business is still “robust” but not likely to continue growing at the rate seen in the past 18 months when that market recovered from the recession.
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Chemtura is adapting by introducing new products earlier than planned – for example, in light-emitting diode (LED) applications and flame retardants – as well as through some capacity expansions, including expansions in its metallics businesses.
One challenge Chemtura faces is minimising the lag in passing on oil-driven increases in raw material costs to customers in the form of higher product prices.
“With the potential oil shock working its way through the chemicals sector, we have redoubled our effort to minimise any lag between the change in the cost for raw material inputs and selling prices,” Rogerson said.
At the same time, Chemtura’s petroleum additives business, for example, could benefit from the increase because higher oil prices would drive the need for more additives to achieve fuel efficiencies, he said.
On Monday, the
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