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Released November 07, 2017 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Executives with Huntsman Corporation (NYSE: HUN) (The Woodlands, Texas) recently registered disappointment over the termination of the company's proposed merger with Clariant (Muttenz, Switzerland), but noted the polyurethanes producer is enjoying a strong global methylene diphenyl diisocyanate (MDI) market.
Clariant and Huntsman had proposed a "merger of equals" in May, but increased resistance by Clariant shareholders killed the deal. As such, Huntsman will go it alone for the time-being, indicted Chief Executive Officer Peter Huntsman.
Huntsman reported $179 million in net income for third-quarter 2017, compared with $64 million in the prior-year period. During the just-ended quarter, Huntsman used net proceeds from the initial public offering for its Venator Materials PLC (NYSE:VNTR) (Wynyard, England) pigments and additives business spinoff to reduce Huntsman's debt.
Huntsman reported nearly $2.2 billion in revenue for the just-ended quarter, compared with $1.8 billion for third-quarter 2016.
The company's polyurethanes segment reported $245 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), compared with $167 million in third-quarter 2016. Within the segment, MDI average selling prices increased in response to continued strong market conditions and higher raw material costs, Huntsman said.
"All of our MDI production units operated at high rates during the third quarter, and as a result, we delivered strong global volume growth of 8%," Peter Huntsman said during the company's earnings conference call with investment analysts. "Industry operating rates are very tight with global effective operating rates above 95% capacity utilization," he continued. "Industry demand for MDI is growing at about 6% globally on an annualized basis."
As such, global industry capacity needs to expand at the equivalent of one world-scale facility per year, Peter Huntsman said, adding: "As of today, we believe industry manufacturing capacity will grow approximately 4% annually from 2016 through 2021."
The only new greenfield MDI facility entering the market is at the Sadara Chemical Company complex in Saudi Arabia, with a stated capacity of 400,000 metric tons, and no other greenfield site is under construction, he added.
The company's North American MDI volumes increased 10% during the quarter as both commercial and residential construction markets drove demand in composite wood products, adhesives and insulation sectors. In Geismar, Louisiana, Rubicon LLC, a joint venture between Huntsman and Chemtura Corporation (now part of Lanxess Corporation (Cologne, Germany)), is expected to complete work soon on an MDI pures & variants unit debottleneck and expansion. Construction kicked off in May, 2016. For more information, see Industrial Info's project report.
In the nine months ended September 30, Huntsman spent $159 million on capital expenditures, compared with $214 million in 2016. The company expects to spend $290 million on capital expenditures in 2017.
During the third quarter, Hurricane Harvey had a $50 million impact on earnings. The hurricane put a $35 million dent in earnings for Huntsman's Performance Products segment by flooding its largest site in Port Neches, Texas, along with other Texas Gulf Coast sites.
Industrial Info is tracking $360 million in Huntsman-related capital projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Clariant and Huntsman had proposed a "merger of equals" in May, but increased resistance by Clariant shareholders killed the deal. As such, Huntsman will go it alone for the time-being, indicted Chief Executive Officer Peter Huntsman.
Huntsman reported $179 million in net income for third-quarter 2017, compared with $64 million in the prior-year period. During the just-ended quarter, Huntsman used net proceeds from the initial public offering for its Venator Materials PLC (NYSE:VNTR) (Wynyard, England) pigments and additives business spinoff to reduce Huntsman's debt.
Huntsman reported nearly $2.2 billion in revenue for the just-ended quarter, compared with $1.8 billion for third-quarter 2016.
The company's polyurethanes segment reported $245 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), compared with $167 million in third-quarter 2016. Within the segment, MDI average selling prices increased in response to continued strong market conditions and higher raw material costs, Huntsman said.
"All of our MDI production units operated at high rates during the third quarter, and as a result, we delivered strong global volume growth of 8%," Peter Huntsman said during the company's earnings conference call with investment analysts. "Industry operating rates are very tight with global effective operating rates above 95% capacity utilization," he continued. "Industry demand for MDI is growing at about 6% globally on an annualized basis."
As such, global industry capacity needs to expand at the equivalent of one world-scale facility per year, Peter Huntsman said, adding: "As of today, we believe industry manufacturing capacity will grow approximately 4% annually from 2016 through 2021."
The only new greenfield MDI facility entering the market is at the Sadara Chemical Company complex in Saudi Arabia, with a stated capacity of 400,000 metric tons, and no other greenfield site is under construction, he added.
The company's North American MDI volumes increased 10% during the quarter as both commercial and residential construction markets drove demand in composite wood products, adhesives and insulation sectors. In Geismar, Louisiana, Rubicon LLC, a joint venture between Huntsman and Chemtura Corporation (now part of Lanxess Corporation (Cologne, Germany)), is expected to complete work soon on an MDI pures & variants unit debottleneck and expansion. Construction kicked off in May, 2016. For more information, see Industrial Info's project report.
In the nine months ended September 30, Huntsman spent $159 million on capital expenditures, compared with $214 million in 2016. The company expects to spend $290 million on capital expenditures in 2017.
During the third quarter, Hurricane Harvey had a $50 million impact on earnings. The hurricane put a $35 million dent in earnings for Huntsman's Performance Products segment by flooding its largest site in Port Neches, Texas, along with other Texas Gulf Coast sites.
Industrial Info is tracking $360 million in Huntsman-related capital projects.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
