05 August 2013 22:54 [Source: ICIS news]
HOUSTON (ICIS)--Rockwood Holdings continues to move toward an exit from the titanium dioxide (TiO2) market, but is still weighing its options, the US specialty chemicals company said on Monday.
The company has previously said it plans to divest its pigment business by the end of 2013.
During the company’s second-quarter earnings conference call, chief executive Seifi Ghasemi was asked if the company had decided whether to sell its pigment business or spin it off.
“We are looking at all our options,” Ghasemi responded, adding later, “And we are quite honestly not in a hurry … because the business is going to come back.”
Rockwood Holdings’ second-quarter net income fell by 86% year on year to $32.3m (€24.2m), owing largely to losses in the company’s TiO2 segment.
“The pickups in US housing and remodelling activities were below our expectations,” Ghasemi conceded. “But we do believe that we are seeing a turnaround in our TiO2 cycle, and we expect the performance of this business to improve further in 2014.”
He predicted that the company’s TiO2 profitability in the second half of this year will reach $50m-60m, even if current TiO2 price-hike efforts do not succeed.
Second-quarter North American TiO2 prices of $1.55-1.70/lb ($3,417-3,748/tonne), as assessed by ICIS, are about 21% lower than one year ago, but have been heard weaker by about 5 cents/lb for the third quarter.
Ghasemi added that reduced operating rates and second-quarter pigment production using more expensive raw materials have increased costs and narrowed margins, but that Rockwood will resume more typical operating rates in the second half of the year.
In other segments of Rockwood’s business, Ghasemi said the company expects to close the sale of its ceramics business to Cinven by the end of August, and close the sale of its clay-based additives business to Altana by early October.
($1 = €0.75)
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