Edited from: “Dear stockholders”, Annual Report
Emerging from what Huntsman states as being a year of “transformation”, the company expanded the size and scope of its portfolio by acquiring the Textile Effects business of Ciba Specialty Chemicals. The company further announced its intention to separate its base chemicals and polymers assets from its portfolio of differentiated businesses and also divested its European commodities business to Sabic. In addition, it also sold off some of its US methyl tertiary butyl ether (MTBE) and butadiene assets to Texas Petrochemicals.
“Going forward, we will be less dependant on volatile crude oil-based raw materials and more leveraged to products where we can capitalize on our technology, global marketing and low cost of manufacturing. We expect this to result in a more stable, and growing, earnings profile”, says president and chief executive officer, Peter Huntsman.
The company has put in place a $150m three year plan to restructure and integrate the Textile Effects businesses of Ciba. This restructuring programme is expected to improve Huntsman’s profitability in Textile Effects by over $80m.
Huntsman’s initiatives include:
The possible construction of a second methyl di-p-phenylene isocyanate (MDI) facility in China, start-up is expected in 2010-2011. In 2006, Huntsman completed the construction of a MDI facility in Caojing, China.
Construction of a polyetheramine manufacturing facility in Singapore, expected to be operational mid-2007.
Construction of a 45,300 tonnes/year maleic anhydride (MA) manufacturing facility in Geismar, Louisiana, US is expected to be complete in the fourth quarter of 2008.
Memorandum of understanding with the Al-Zamil Group to build a world-scale ethyleneamines manufacturing facility in Saudi Arabia, expected to be operational in 2008.
An expansion to add 50,000 tonnes/year at its titanium dioxide manufacturing facility in Greatham, UK. It expects this investment will improve its cost structure by approximately $40m.
Looking forward, the company expects that it will continue to experience “positive trends across many of its businesses and the markets that it serves”. Raw material and energy prices have declined, while at the same time, demand and selling prices for many of its products continue to improve.
Investment in technology will be an important part of Huntsman’s strategy as it believes that not only does it provide a means of growth in future applications but it is also producing better chemistry that will replace older formulations. Huntsman will continue to increase its capacity of products that use non crude oil based raw materials, while also decreasing its energy consumption and CO2 emissions.
“We are very optimistic about the future and the direction of the business. I believe we have put in place an excellent platform for growth that will be fuelled by ongoing innovation and creativity”, concludes Huntsman.
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Huntsman is a global manufacturer and marketer of differentiated chemicals. Its operating companies manufacture products for a variety of industries, including chemicals, plastics, automotive, aviation, textiles, footwear, paints and coatings, construction, technology, agriculture, health care, detergent, personal care, furniture, appliances and packaging.
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