28 February 2013 12:38 [Source: ICIS news]
PARIS (ICIS)--French specialty chemicals maker Arkema announced on Thursday that it will spend around €500m ($658m) in capital expenditure (capex) in 2013 to support its growth ambitions.
In 2012, Arkema spent €438m in total capex. Arkema added that the 2013 capex spend is in line with its “mid-term capex guidance” of €1.7bn over the four years from 2013 to 2016.
The company also said it will continue to look for bolt-on acquisitions to improve the company’s earnings and strengthen its existing segments.
Arkema’s CEO Thierry Le Henaff, speaking at a press conference in Paris, said: “Clearly it is part of Arkema’s strategy to make bolt-on acquisitions, and if there are possibilities to make acquisitions which makes sense for us, we will make them.
“We have a strong balance sheet, we have no problem regarding financial flexibility, so we are ready to make them. But we are not in any urgency, the company will not collapse if we do not make any.”
Le Henaff said any acquisition would most likely be in the downstream acrylics, specialty coatings, or high performance materials units.
“All the segments are strong and we are ready to make acquisitions in any of them,” he said.
Although Arkema does not provide detailed earnings projections at the beginning of the year, in his outlook for 2013, Le Henaff said the group is confident in its ability to achieve a strong performance but remained cautious about the macroeconomic environment. He added that market conditions are expected “to remain contrasted”.
He said weak demand observed in certain high performance materials end-markets at the end of 2012 has continued at the beginning of the year, however, Arkema is confident of a gradual recovery of volumes during the first half of the year.
“[Market conditions] should be solid in North America, supported by improved GDP and low energy costs, with a gradual recovery in decorative paints and should remain challenging in Europe with continuing cautiousness of customers,” he added.
“Growth should gradually improve in Asia, with early signs that China will progressively return to higher growth levels,” the CEO said. However, Le Henaff added raw material cost and exchange rates, in particular for the US dollar against the euro, are expected to remain volatile, and that the company expects weak demand in photovoltaics in the first half of 2013 and in the automotive industry in Europe. Arkema also forecasts delays in some oil and gas projects.
The CEO also announced a number of priorities Arkema will focus on in 2013. These included the target to finalise its $110m investment plan in acrylics in the US, involving the start-up of a 30,000 tonne/year acrylic acid expansion in mid-2013 and the start-up of a 45,000 methyl acrylate unit in the second half of the year.
Arkema also wants to maintain the pace of development in China, with the start-up of a capacity expansion at its Hipro plant by the end of the first quarter of 2013 and a new emulsions unit in Changshu in the fourth quarter of this year. The company also will focus on completing the construction of its thiochemicals platform in Malaysia.
“Arkema will also continue to invest significantly in innovation, as the projects currently under way offer promising prospects in particular in solutions for sustainable development,” he added.
“Finally, the group will continue to strictly control its costs and cash,” Le Henaff said.
($1 = €0.76)
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