US PolyOne's growth could slow on Europe troubles - CEO Newlin

17 February 2012 18:15  [Source: ICIS news]

HOUSTON (ICIS)--The economic situation in Europe could decelerate PolyOne's growth , the chief executive of the US-based polymer materials firm said on Friday.

“We are still very concerned about Europe, and we think it’s fragile, at best," CEO Stephen Newlin told analysts during PolyOne's 2011 fourth-quarter conference call.

In particular, a reduction in demand in Europe could hurt ColorMatrix, an additive and liquid colourant technologies firm that PolyOne acquired last year.

Some 70% of ColorMatrix's business is outside the US, with a relatively heavy concentration in western Europe, Newlin said.

At the same time, a weaker euro poses near-term headwinds for PolyOne, he added.

While currencies are hard to predict, “most likely, I believe, the US dollar will strengthen against the euro,” Newlin said.

However, despite the slowdown in Europe, and also a difficult global solar market, PolyOne would not have a down-quarter in the first three months of 2012, compared with the year-earlier period, the CEO said.

“We remain extremely optimistic about our medium to long-term growth prospects,” Newlin added.

ColorMatrix, in particular, would play a key role in PolyOne’s transformation towards a specialty company, Newlin said.

Specialties currently account for 50% of PolyOne's earnings, compared with only 2% in 2005, he said.

Earlier on Friday, PolyOne reported an 86% year-on-year decline in 2011 fourth-quarter net income because of a large pension charge, as well as lower favourable tax adjustments.

By: Stefan Baumgarten
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