28 February 2012 17:25 [Source: ICIS news]
LEVERKUSEN, Germany (ICIS)--Bayer MaterialScience’s performance in 2011 may have been slightly lower than it expected, as price rises did not fully offset increases in raw material and energy costs in the second half of the year, but the segment’s CEO on Tuesday said he was far from concerned.
In fact, Patrick Thomas remains upbeat, dismissing the fall in earnings as a one-off.
“If we look at demand in January and February, we are back at normal sales levels, with earnings coming back up again, so I don’t see what happened in the fourth quarter as typical – I think it was a one-off,” he said.
In the fourth quarter of 2011, earnings before interest, tax, depreciation and amortisation (EBITDA) at MaterialScience fell by 49.5% year on year to €150m ($200m) as sales grew by 0.5% to €2.60bn.
MaterialScience said factors including the euro crisis, the sluggish recovery of demand and the real estate industry in north America and the strict measures adopted to tackle inflation and economic overheating in ?xml:namespace>
Earnings were also diminished by higher operating costs, partly arising from the commissioning of MaterialScience’s new toluene di-isocyanate (TDI) facility in
“We had to build our TDI unit [in
Thomas added that MaterialScience was hit with a lot of unavoidable costs in the last quarter arising from shutdowns, turnarounds, a major flood in
“There were a million one-offs in there that are nothing to do with trading [conditions],” he added.
Despite the poorer performance at the end of 2011, Thomas said that there were no plans to consolidate the business segment to cut costs.
Asked about the possibility of acquisitions in 2012, Thomas said the option looks unlikely.
“Bayer is the leader in polyurethanes and polycarbonates and the degree to what other assets we can buy is very limited. We have 20% plus market share in all the sectors we are in, so, legally, it would not be very easy to acquire,” he said.
“What we continue to do is buy up interesting technologies and downstream activities which add to our geographical reach or our technological portfolio.”
However, Thomas would not speculate on any projects in the pipeline.
Looking at MaterialScience’s focus of expansion, Thomas said countries in southeast Asia such as
At MaterialScience, sales in the emerging markets advanced by 7.0% year on year in 2011 to €4.57bn.
In its annual report the group said that it achieved its largest sales gains in eastern Europe, especially in the
However, sales development in the emerging markets of Asia-Pacific varied by country. In
Thomas said that MaterialScience is interested in the dynamics of
If you look for areas of educated, lower-cost labour, it’s in southeast Asia. I think the whole area of
“I think it’s logical industry will follow that labour market and we will follow that industrial market – it’s an exciting zone,” he said.
($1 = €0.75)
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