PaintSquare.com


The First Word in Protective & Marine Coatings

A Product of Technology Publishing / PaintSquare
JPCL | PaintSquare News | Durability + Design | Paint BidTracker

Download the FREE Equipment and Rental Resource Guide

Paint and Coatings Industry News

Main News Page


TiO2 Price Hikes Boost DuPont Earnings

Wednesday, January 25, 2012

More items for Coating Materials

Comment | More

Price increases of nearly 30 percent on its lion’s share of a key coatings pigment brought home record earnings for DuPont in 2011, despite declining sales volume, the company reported this week.

 titanium dioxide
The paint and coatings industry is the largest consumer of titanium dioxide, and coating makers have scrambled to stabilize their supplies.

The world’s largest producer of titanium dioxide saw 2011 earnings, before significant items, increase 20 percent, to a record $3.93 per share, beating analysts’ estimates.

Segment pre-tax operating income increased over $100 million, or 18 percent, versus the prior year.

Much of that strong showing came from DuPont’s Performance Chemicals business, including the Titanium Technologies unit, the company reported Tuesday (Jan. 24).

 B.C. Chong

 DuPont

DuPont is dramatically increasing its production of titanium dioxide to assure a “sustainable supply” of the popular pigment, says Titanium Technologies president B.C. Chong.

Performance Chemicals reported sales of $1.9 billion—up 12 percent, despite 17 percent lower volume, thanks to 29 percent higher selling prices. Pretax Operating Income was $433 million—up $118 million on higher selling prices, the company said.

“TiO2 is currently the best performing major product line for DuPont,” Mark Gulley, a New York-based analyst at Ticonderoga Securities, told Bloomberg News.

TiO2 Scramble

DuPont attributed the slowdown in sales to “a pause in demand for titanium dioxide, particularly in Asia Pacific.”

That pause coincides with a global scramble by paint and coatings companies—the largest consumers of TiO2—to find other sources for the common pigment, after years of skyrocketing prices and shrinking supplies.

A chemical industry analyst warned in October that global supplies of titanium dioxide had reached historically low levels, ensuring continuing price increases.

Coatings companies are hastening to fill that gap. In December, PPG Industries announced a “global initiative” aimed at stabilizing its titanium dioxide supply.

PPG’s action followed AkzoNobel’s June announcement of a partnership with a Chinese chemical company to build a new TiO2 plant in Qinzhou, China.

DuPont has also announced that it will dramatically expand global production of the pigment. The company said in May that it would invest more than $500 million to add production capacity in Mexico and upgrade five other manufacturing sites worldwide, ultimately adding about 770 million pounds of global capacity.

DuPont has said that future demand growth for Performance Chemicals will come from developing economies in Asia Pacific and “favorable industrial fundamentals.”   Long-term sales are expected to grow 6-8 percent compounded annually, with PTOI margin targets of 18-20 percent, DuPont said last month. Near-term PTOI margins are expected to be 22-24 percent.

Other Highlights

DuPont also reported:

• Fourth-quarter 2011 consolidated net sales totaled $8.4 billion, a 14 percent increase over the prior year, mainly from higher local prices. A 10 percent net increase from portfolio changes was offset by a 10 percent volume decline.

• Every region saw volume declines “driven by destocking in photovoltaics, polymer and industrial supply chains” as well as weaker demand for construction and electronics products.

• That it was reaffirming its 2012 earnings outlook range of $4.20 to $4.40 per share, which represents 7 to 12 percent growth versus 2011, excluding significant items.

Selected Segment Results

Performance Coatings sales were up 8 percent, to $1.1 billion, with 10 percent higher selling prices across all market segments and 2 percent lower volume.  At its Investor Day in December, DuPont said the segment’s PTOI margins were expected to improve in 2012, driven by productivity and a 6 percent increase in auto builds. 

Performance Materials sales of $1.6 billion were up 1 percent, with 14 percent higher selling prices and 13 percent lower volume.

Earlier, DuPont noted “a number of challenges this year” in the segment, including the Japan earthquake and recent destocking in the automotive channel.  Long-term compound annual sales growth is expected to be 4-6 percent.

"We delivered exceptional full-year results in 2011 despite significant market headwinds late in the year," said DuPont Chair and CEO Ellen Kullman.

“Acquisitions in Nutrition & Health and Industrial Biosciences, coupled with robust and disciplined productivity efforts across our businesses, contributed to our successful performance."

   

Tagged categories: Coatings raw materials manufacturers; DuPont; Pigments; Protective coatings; Raw materials; Titanium dioxide

Comment Join the Conversation:

Sign in to our community to add your comments.

Sherwin-Williams
Heat-FLex® Hi-Temp 1200

Improved Corrosion
Resistance
Enhanced Durability
Faster Shop Throughput


Mitsubishi Gas Chemical America
Performance Amine 1,3-BAC

A highly reactive cycloaliphatic diamine offering superior performance. Reasonable cost and curing efficacy makes it suitable for all types of epoxy resin applications.


BASF
New resins from BASF will have metals loving water:

Excellent corrosion resistance, low VOC, high gloss, thin films basf.us/industrialcoatings
polyorders@basf.com
800-231-7868


Wasser High-Tech Coatings Inc.
Wasser Coatings Protect

some of the most important bridges in the country; learn about our NEPCOAT-approved system and our entire range of MCU & Polyurea coatings. 1-800-627-2968 www.wassercoatings.com


International Paint LLC

International Paint Engineered Coatings

Learn about our solutions for:
  • Structural Steel
  • Piping & Equipment
  • Storage Tanks
  • Pressure Vessels
  • Secondary Containment


    Thermion Inc
    Buy Back Program

    We are offering $5,000
    credit for your old Model
    This drive system is
    being discontinued by
    the manufacturer.
    More information at
    thermioninc.com
    877.884.3428


    ITW Binks
    Built for Tough Jobs

    From Epoxies to Urethanes to other high solid coatings, the new Binks Airless 75 delivers a great finish using an ergonomic design. Visit binks.com for more information.

  •  
     
     
    Technology Publishing

    The Technology Publishing Network

    The Journal of Protective Coatings & Linings (JPCL) PaintSquare
    Durability + Design Paint BidTracker JPCL Europe

     
    EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
    REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
    MORE:      About PaintSquare.com   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us
     

    © Copyright 2000-2014, Technology Publishing / PaintSquare, All rights reserved
    2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail webmaster@paintsquare.com