Celanese | Strategy and Financial Highlights Information from ICIS

“Celanese presents earnings growth strategy at investor conference”, 11 May 2009 and 2008 annual report

Celanese states that through portfolio optimisation, productivity, innovation and growth it will continue to execute its strategy of becoming a “leading, global hybrid chemical company with significant earnings power”.

“We are taking actions that position Celanese for success today and in the future”, says chairman and chief executive officer, David Weidman.

Celanese has taken short-term cost containment actions and is aggressively pursuing long-term sustainable efforts to further improve its cost structure. The company announced in May 2009 that it had increased its sustainable cost savings estimates to approximately $250m by 2010, compared with its previously announced estimates of between $100m and $120m. The additional cost savings will be achieved by aligning its manufacturing footprint with future demand, as well as other actions.

“In 2009 and 2010, we plan to invest between $250m and $270m in high-return productivity projects in order to generate the savings that we have identified, placing the company in an excellent position to expand its earnings and to continue to generate a strong cash flow”, says senior vice president and chief financial officer, Steven Sterin.

As part of its strategic plans for growth, the company announced expansions across its acetyl chain, including the expansion of its acetic acid unit in Nanjing, China. The company further highlighted the growing demand for acetic acid in China and its ongoing site optimisation efforts. As a result, the company plans to double the current capacity of 600,000 tonne/year at its Nanjing facility to 1.2m tonne/year by the end of 2009. Using its new AOPlus 2 technology, the facility could be further expanded to 1.5m tonne/year.

Additionally, market growth through innovative technologies has created further demand for vinyl acetate ethylene (VAE) capacity in Asia. As a result, Celanese is currently evaluating options for additional manufacturing units in the region.

“With our strong position in Asia, our leadership in key segments and an excellent capital structure, we believe that we are well-positioned to maintain a leading position in this challenging economic environment and beyond”, says Weidman.

Strategy

For the past several years, Celanese has followed a strategic foundation that is supported by four strategic pillars:

(1)   Participate in businesses where Celanese has a sustainable competitive advantage.

(2)   Leverage and build on advantaged positions that optimise its portfolio.

(3)   Aggressively align with its customers and their markets to capture growth.

(4)   Divest non-core assets and revitalise underperforming businesses.

Looking ahead, Celanese believes that with the current global economic recession and continued weak consumer demand, it expects volumes to remain under pressure in 2009, even with the easing of inventory destocking. Margins should benefit from lower raw material and energy costs as the impact of inventory accounting subsides.

Although Celanese says that its businesses are well positioned, it will continue to take the necessary, aggressive actions required to align its operations and staffing with the short-term demand environment, while strengthening its businesses for the long-term.

“Celanese has a long and successful track record of execution. We’ve strengthened our business model and optimised our leading global franchises to create a strong portfolio of businesses. We’ve stayed the course on our road to premier with a solid strategy that stands the test of time, and we remain confident in our ability to deliver value creation in the years to come”, concludes Weidman.

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Celanese Company Structure

Celanese is a global chemicals company focusing mainly on basic, intermediate and specialty chemicals, emulsions, acetate products, technical polymers and food ingredients. The Celanese portfolio consists of four main businesses: Chemical Products, Acetate Products, Technical Polymers Ticona and Performance Products.
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