17 September 2013 15:56 [Source: ICIS news]
HOUSTON (ICIS)--Huntsman does not plan to back-integrate into ore as it works to prepare the combined Huntsman-Rockwood titanium dioxide (TiO2) business for an initial public offering (IPO), the CEO of the US-based chemicals firm said on Tuesday.
“I don’t really see [back-integration into ore feedstock] as a counter-cyclical play,” Peter Huntsman told analysts during a webcast briefing on Huntsman’s announcement earlier on Tuesday to acquire Rockwood’s TiO2 and performance additives business.
“Typically, when TiO2 prices and margins are down, ore margins are down with it,” he said.
Instead of back-integrating, Huntsman was much better off integrating horizontally, as it will do with the acquisition of the Rockwood business, the CEO said.
“I would rather have more routes to market, I would rather have more technology, and I would rather have more specialty products, and I would rather have greater flexibility globally and geographically,” he said.
“I think that’s what Huntsman does best, that interface with the customer, and bringing competitive manufacturing platforms to market,” he said.
"I don't know what we could bring to the ore industry by us being an ore producer," he said.
Huntsman would only consider investing in the upstream ore mining industry if there was a “tremendous opportunity”, he said.
“I personally just don’t see us doing that,” he added.
Huntsman's acquisition of the Rockwood business will make it the second-largest global TiO2 producer after DuPont.
Huntsman plans to list the combined TiO2 business in an IPO within two years following closing of the acquisition. DuPont said in July that it was looking at strategic alternatives, including a possible spin-off, for its performance chemicals business, which includes TiO2.
Additional reporting by Graeme Paterson in London
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