Think tank: Chemtura to sharpen focus

28 October 2013 00:00  [Source: ICB]

US-based Chemtura has announced that it may divest two of its six business units, which made up nearly a third of its operating income in 2012.

It has already reached an agreement to sell Consumer Products, its spa and pool chemicals business, to KIK Custom Products for $315m (€230m). The company’s is now considering a possible sale of Chemtura AgroSolutions, for which it already received an unsolicited offer.


 Chemtura to use urethanes to produce large tyres

Copyright: Rex Features

If the sales go through, Chemtura can focus more on its industrial specialties segments – Industrial Performance Products and Industrial Engineered Products – which can make the most of trends that are already benefiting the chemical industry, from rising mileage standards for autos to LED lighting.

Industrial Performance Products includes Chemtura’s petroleum additives and urethanes businesses, while Industrial Engineered Products includes flame retardants and organometallics as well as bromine and bromine derivatives.

Those segments have significant opportunities for growth, and Chemtura has “the right technology and the right market-access to be able to create significant value by focusing on those businesses”, said Craig Rogerson, Chemtura CEO in an interview with ICIS. Petroleum additives are increasingly important because automobile producers are developing vehicles that consume less fuel and emit fewer emissions to meet stricter regulations. Those vehicles require higher-performing lubricants, creating demand for lubricant additives.

The company’s urethanes product line manufactures ingredients are used to make castable urethanes, which can be used to make discrete, moulded parts. Chemtura and Caterpillar are using such urethanes to develop solid tyres, which would provide unique performance characteristics.

Chemtura is now developing ways to produce polyurethane pellets that could go into injection moulding processes, Rogerson said. This could open up new applications for the company’s materials, as injection moulding is more common.

Chemtura’s organometallics are used to produce high-brightness LEDs which are replacing fluorescent and incandescent lights, and demand for them should increase as the construction industry recovers, Rogerson said.

Its organometallics are also used to produce catalysts used in polyolefins plants. This gives Chemtura a chance to benefit from the advent of shale gas in the US. Chemical producers are expanding ethylene and polyethylene (PE) capacity to take advantage of low-cost ethane.

By: Al Greenwood
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