US Huntsman mulls rationalisation in liquid epoxy resins business

12 February 2013 19:14  [Source: ICIS news]

HOUSTON (ICIS)--US-based Huntsman is considering rationalisation in its basic liquid epoxy resins, the CEO said on Tuesday, the latest head of a company who expressed pessimism about the prospects of the industry.

Huntsman’s liquid epoxy resins (LER) business falls under its advanced materials segment, which also produces solid epoxy resins, specialty resin compounds and formulations based on epoxy, acrylic and polyurethanes, according to the company's annual report.

For basic liquid resins (BLR), "there is a sense in the industry that so many people are hurting, the capacities will be rationalised. We're evaluating some of our own capacity as part of that exercise", said Peter Huntsman, the company's chief executive, during an earnings conference call.

The commodity BLR business is at historical lows, the CEO said. However, other parts of the company's advanced materials segment are doing well, he said.

"We continue to be very satisfied with the growth of our oil-based business. The electronics business is growing for us robustly around the world," Huntsman said.

"A lot of the coatings, flooring businesses, some of the more niche and specialty adhesive business-applications, continue to grow and do quite well," he said.

For 2012, the company's advanced materials segment reported revenue of $1.33bn (€998m), down almost 3% from $1.37bn in 2011.

The segment reported $92m in 2012 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), down around 17% from $111m reported for 2011.

Huntsman was not alone in his gloomy outlook for liquid epoxy resins.

Just weeks ago, Dow Chemical's CEO said the world has too much epoxy-resin capacity, and some companies will likely take some of that capacity off line.

"On epoxy, the Chinese just overbuilt, that plus the Taiwanese and the Koreans," said Andrew Liveris, Dow CEO, who made his comments during an earnings conference call.

"Epoxy will continue to be oversupplied, and frankly, there needs to be capacity taken out. Capacity will need to come out," Liveris said.

"We've done some of it, and others will do it as well," he said.

($1 = €0.75)

By: Al Greenwood
+1 713 525 2645

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