Edited from: “To our shareholders” 2008 Annual Report and “Albemarle Reports Second Quarter 2009 Results” and company website
On the back of a “challenging economy” Albemarle continues to remain confident that its programmes to control cost, generate cash, drive new products, and operate more efficiently will enable it to weather the economic downturn.
On this basis, it will continue to focus on its strategic efforts on growth businesses and emerging economies, while taking steps to build a sustainable business model for 2009 and beyond.
“As we look out to the global growth opportunities ahead, we remain sharply focused on our strategy to improve continuously our financial performance,” says president and chief executive officer, Mark Rohr.
As part of its business growth strategy, it has acquired businesses and entered into joint ventures in the past. Albemarle intends to further pursue acquisitions and joint venture opportunities. However, it states that it is possible that it may not be able to realise any of the anticipated benefits from acquisitions or joint ventures.
“Our ability to implement this component of our growth strategy will be limited by our ability to identify appropriate acquisition or joint venture candidates and our financial resources, including available cash and borrowing capacity. The expense incurred in consummating acquisitions or entering into joint ventures, the time it takes to integrate an acquisition or our failure to integrate businesses successfully, could result in unanticipated expenses and losses,” says Rohr.
Looking ahead, Albemarle plans to increase its global sales by looking abroad for growth. By 2010, it plans to derive more than 60% of its sales outside of the Americas. The goal is part of Albemarle's “Vision 2010” presentation. Albemarle's other global plans include building plants in Brazil, the Middle East and China; moving into the Former Soviet Union countries and researching emerging economies.
Albemarle is already expanding joint ventures in China. In addition, it is established in regions in India and the Middle East.
To continue with its strategic direction the company has taken a number of important steps to ensure the future sustainability of its business and its strategy will focus on:
Polymer Additives segment – sales of polymer additives in Asia are expected to grow long-term due to the underlying growth in consumer demand and the shift of the production of consumer electronics from the US, or US and Europe to Asia.
In response to this development it has established a sales and marketing network in China, Japan, Korea and Singapore with products sourced from the US, Europe and the Middle East.
In addition, it has completed the purchase of 100% ownership in two previous joint venture manufacturing sites in China, Ningbo Jinhai Albemarle Chemical and Industry Company and Shanghai Jinhai Albemarle Fine Chemicals Company and began flame retardant production at its Nanjing site.
Albemarle is also increasing its presence in China as it builds a foundation for expanding its business in Asia. Its technology centre in Nanjing is now operational. This centre provides technical support for its Polymer Additives customers in the Asia Pacific region.
A number of customers of its Polymer Additives segment manufacture products for cyclical industries, including the consumer electronics, building and construction, and automotive industries. As a result, demand from its customers in such industries is also cyclical and is currently below historical levels with timing of recovery uncertain.
Catalysts segment – Albemarle expects revenue growth in its Catalysts segment to be driven by global demand for petroleum products, generally deteriorating quality of crude oil feedstock and implementation of more stringent fuel quality requirements as a part of its clean air initiatives.
It expects Catalysts profit growth in 2009 will come primarily from new product introductions, new markets that it penetrates, fluid catalytic cracker (FCC) pricing improvements and the continued growth in its polyolefin catalysts business.
As oil demand remains elevated, the company believe refiners will process more sour crudes, which will require additional hydroprocessing (HPC) catalysts to remove the metals and impurities, further driving demand for these catalysts.
Fine chemicals segment - this segment continues to benefit from the continued rapid pace of innovation and the introduction of new products, coupled with the movement by pharmaceutical companies to outsource certain research, product development and manufacturing functions.
Outlook
Albemarle states that much uncertainty still exists as to the duration of the current global economic downturn and the impacts on the end-markets serviced by its products. However, it says it is seeing indications of better customer order patterns across its businesses and the benefits of its cost reduction programmes.
“We believe that these dynamics will favourably position us to cope with the continuing challenges in the global marketplace and emerge even stronger in the markets we serve,” concludes Rohr.
ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.
A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.
See the article and analysis of the ICIS Top 100 on ICIS news.
Financial highlights: Albemarle, year ended 31 December
|
|
2008 |
2007 |
2006 |
2005 |
2004 |
|
Sales ($ m) |
2,467 |
2,336 |
2,369 |
2,107 |
1,514 |
|
Operating Profit ($ m) |
221 |
310 |
177 |
164 |
102 |
|
Net Profit ($ m) |
194 |
230 |
143 |
115 |
55 |
|
Total Assets ($ m) |
2,844 |
2,830 |
2,530 |
2,556 |
2,443 |
|
Diluted earnings per share ($) |
2.10 |
2.36 |
1.47 |
1.20 |
-- |
|
Number of Employees |
3,700 |
4,100 |
3,500 |
3,700 |
3,700 |
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Albemarle
Company Structure
Albemarle is a global speciality chemicals and chemical intermediates manufacturer with research facilities in the US and Belgium and manufacturing facilities predominantly in the US, but also in France, Belgium and Japan. Albemarle was founded in 1887 as the Albemarle Paper Manufacturing Company and later developed as a chemicals manufacturer. In 1962 it acquired the Ethyl Corporation of Delaware, US in a reverse takeover to form the Ethyl Corporation (Virginia). In 1994 Ethyl divested its chemicals business as the Albemarle Corporation.
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