US Huntsman evaluates debottlenecking MDI capacity

12 February 2013 18:06  [Source: ICIS news]

HOUSTON (ICIS)--US-based Huntsman is considering debottlenecking its methyl di-p-phenylene isocyanate (MDI) capacity, as the producer expects demand growth to outpace that of supply, the company's chief executive said on Tuesday.

If Huntsman does decide to increase MDI capacity, it would pursue a strategy of increasing the lowest-cost capacity first before moving on to higher-cost expansions, said CEO Peter Huntsman, who made his comments during an earnings conference call.

"I think that we are technically evaluating debottlenecking projects," Huntsman said.

After debottlenecking, the next stage would be adding a new line, followed by a new facility, he said.

Although Huntsman expects MDI demand to continue growing, uncertainty in the North American economy is holding Huntsman back from committing to any expansion plans, he said. Plus, adding capacity is not the only way to grow the MDI business, Huntsman said.

"One of the areas of MDI growth for us as a company, I believe, is not necessarily adding more tonnage to the industry, but it is taking our existing tonnage and moving that further downstream through systems, through variants and adding that with other Huntsman chemistry to add value with that," he said.

MDI is part of Huntsman's polyurethanes segment, which accounted for more than 40% of the company's 2012 revenue.

For all of 2012, revenue for Huntsman's polyurethanes segment reached $4.89bn (€3.67bn), up about 10% from $4.43bn in 2011.

The segment reached $772m in 2012 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), up about 62% from $476m reported for 2011.

($1 = €0.75)

By: Al Greenwood
+1 713 525 2645

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