US Honeywell will keep caprolactam, nylon business

09 March 2011 19:30  [Source: ICIS news]

TORONTO (ICIS)--US-based Honeywell will not sell its caprolactam (capro), nylon and ammonium sulphate fertilizer business, which continues to be very competitive, a company executive said on Wednesday.

Andreas Kramvis, CEO of Honeywell’s specialty materials business, said the diversified technology major had been getting questions from investors about how good the interlinked caprolactam, nylon and ammonium sulphate business is and why the company was keeping it.

“Well, we think it’s darn good,” Kramvis told investors at a conference in New York.

In fact, during the global downturn and collapse in demand in 2008-2009, many of Honeywell’s competitors stopped producing as they could no longer run their plants commercially.

Honeywell, however, “went through the recession working 100%”, Kramvis said.

The main reason for this was the scale of Honeywell’s plants, which gave the company a huge competitive advantage, he said.

Going forward, demand in the business will go up, as it is very much population-driven, Kramvis said.

Demand will outpace supply as building new plants in the industry is a very capital-intensive, difficult undertaking, making it hard for competitors to catch up with Honeywell quickly, he added.

Capro is a key ingredient in making nylon resins and fibres. Ammonium sulphate fertilizer is a co-product in making capro.

In related news, Honeywell said on Wednesday that it expects first-quarter sales of about approximately $8.7bn (€6.3bn), up by 12% from the 2010 first quarter.

Earnings per share are expected to come in at about 80 cents, up by 23% from the year-earlier quarter.

In addition to chemicals and specialty materials, Honeywell is focused on aerospace, automation and control and transportation systems. It also has a petrochemicals engineering and technology division, UOP.

($1 = €0.72)

For more on Honeywell and other producers visit ICIS company intelligence

By: Stefan Baumgarten
+1 713 525 2653

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