Edited from: “Chairman's statement” Annual Report and “Outlook”.
Ashland’s key strategic focus is growing as a diversified chemical company both organically and through acquisitions. Ashland has made several acquisitions over the years, most notably the water treatment business previously owned by Degussa, now known as its environmental and process solutions business. Through this and other acquisitions, the company will expand globally in the “growing” markets of China, Russia and Brazil, as well as in the US, France and Germany. Ashland will seek acquisitions primarily in the $100m-$500m range that will strengthen its core businesses and leverage its capabilities.
“We’re making significant progress in meeting our goals: integrating our operations. We’re creating a cohesive organisation that uses common processes to support growth across all the businesses and key geographies. We’re unifying our global supply chain, which includes purchasing, logistics, customer service, production operations and engineering,” says chairman and chief executive officer, James O’Brien.
While Ashland expects the unifying of its global supply chain to be ongoing through several more years, the supply chain integration has already captured significant savings through processes like its Lean Six Sigma. It has also enabled compliance with the American Chemistry Council’s (ACC) Responsible Care programme.
Looking ahead, the company states that it has an “aggressive schedule” to meet. It will integrate its marketing, strategy, and research and development functions into a single organisation that will focus on both acquisitive and organic growth. It is believed that by doing this then it will have a “solid foundation” and a growth team that can identify market needs and meet them with new products and services, enabling its commercial units to focus on “selling and growing the bottom line”.
Ashland’s performance materials business is expected to benefit from continued global economic growth. In the composite polymers business, North America, Europe and China are the three major, worldwide markets for unsaturated polyester resins. Although this business faces softness in the North American market, about 40% of Ashland’s revenues in this business are generated outside North America.
The European market has returned to growth and China is showing good growth.
Within the US market, traditional applications in the marine and residential construction segments are slowing. Certain applications, such as composite windows and doors, continue to increase, primarily as a result of material substitution. In addition, several other market segments remain strong, specifically, the electrical, power, and infrastructure segments.
Distribution's performance will be largely determined by growth of the North American economy. Ashland’s focus will be on continued cost control and efforts to grow volume.
“Going forward, we believe that through our strategic focus on growth as a diversified chemical company, we have positioned ourselves to maintain, and ultimately build, our ability to generate positive cash flow,” concludes O’Brien.
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Ashland is a diversified company involved in the worldwide supply of chemicals, products and services to primarily the construction, transportation and water industries. Ashland started in 1924 as a regional petroleum refiner. On 13 November 2008, Ashland acquired Hercules
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