Clariant announce first half results - questions remain for paper chemicals
These are tough times for the speciality chemicals industry and Clariant continues to struggle to achieve a competitive strategy. The first half results show:
- Sales reduction (in CHF term) with a small increase if sales are measured in local currencies
- 42% fall in Q2 net profits
- Heavy reliance on China for raw materials requiring higher inventories.
- S&GA costs up at over 20% despite significant staff culling and efforts at cost reduction.
- Some progress in increasing prices but difficulties in recovering energy and raw material costs
- 'Volume decline' - in management speak this means a loss of business
- Reliance on China for raw materials (especially for optical brightening agents - OBAs) - a lack of strategic vision lead to higher prices having to be paid and probably higher inventories (see earlier blog). In the report it states that this has lead to, '... an unprecedented raw material cost escalation that could not be compensated for by the significant price increases that were realised.'
- The announcement that Clariant will close one of its key European paper chemical production sites (see earlier blog) in Horsforth, Leeds, UK.
What others are saying - Bloomberg, Gulf Times, Basler Zeitung,
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