Weekly Round-Up
Neville Prior 4 February 2011 11:16:46 AM
Huntsman Approves Investment for New Fertilizer Plant at Its Calais, France SiteThe Pigments division of Huntsman Corporation announced that it has agreed in principle to an investment of circa EUR 30 million to build a new magnesium sulfate fertilizer manufacturing operation at the division's titanium dioxide (TiO2) pigments manufacturing plant in Calais, France. The investment is approved in principle and is subject to the finalization of a number of elements including the granting of permits and securing additional finance, which are all on track. The new fertilizer plant will use spent acid from pigment manufacturing operations at Calais and will enable the closure of half the Calais Effluent Treatment Plant (ETP). The operation of the fertilizer plant will deliver major environmental benefits in the form of lower energy consumption and it will also reduce the carbon dioxide emissions at the site. These environmental benefits are coupled with cost reductions that add to the transformation in the efficiency, sustainability and cost effectiveness of the entire Calais site.
President of Huntsman Pigments, Simon Turner said, "We have approved this investment in principle as we can clearly see the significant benefits it will bring. It makes sense from an efficiency and cost point of view and there is also a very compelling sustainability case as this project will reduce site energy consumption and carbon dioxide emissions. Further, it will significantly strengthen the business and make Calais more competitive in European and global markets. The approval of this project is very positive for the site, for the Calais region, and for the nation. We look forward to the safe construction, start-up, and operation of this new facility within the next few years." Scott Anderson, Huntsman Pigments' vice president for manufacturing and technology, said, "The agreement in principle of the investment from Huntsman and the strong support we have received from all authorities and the government, clearly demonstrates our joint commitment to our site at Calais and the Calais region. This is a great step forward. It is important that we recognize the role of our associates, whose joint efforts deliver success for the site. Their support has been, and continues to be, a key factor in ensuring a positive outcome for this project. I thank everyone working on this project, internally and externally, and look to the entire team for their continued effort and assistance, which to date has been exemplary."
P&G Q3 sales up but profits fall on lower pricing and currency exchange
Procter & Gamble announces steady gains for its third quarter sales ending in December, but profits are down on lower retail pricing and negative currency exchange rates. The company said that net sales increased 2 percent to $21.3bn during the quarter, driven by a six percent increase in volumes, which was partially offset by the negative impact of currency exchange rates. Organic sales grew by 3 percent. The growth in sales volumes reflected the fact that the company has been heavily discounting retail prices in an effort to remain competitive in the more depressed markets. P&G said the combination of lower pricing and product mix impacted net sales for the quarter by approximately 2 percent. This inevitably impacted net profit for the period, with the figure falling from $4.66bn to $3.33bn, a decrease of 28 percent. Referring to the company’s market expansion during the quarter, which was mainly driven by sales gains in developing markets, P&G CEO Bob McDonald said: “This is driving strong volume and sales growth ahead of market levels… we are on track to deliver seven to nine percent [EPS] growth for the years.”
Sales for the company’s beauty segment increased by 1 percent to $5.3bn, representing organic growth of 3 percent, while volume growth of 5 percent were ‘entirely’ attributed to double-digit gains in the developing regions. The company also said that lower pricing and unfavorable currency exchange negatively impacted the beauty division by approximately 1 percent. Gains in the developing markets were increased by distribution expansion in Asia and Latin America, while category volume gains in retail hair care and female beauty also helped to drive net sales.
Grooming sales increased by 3 percent to $2.2bn, representing an organic sales increase of 6 percent, while sales volumes for the division were up by 5 percent. Volume increases were driven by the developing markets as well the men’s grooming category. Foreign exchange rates negatively impacted the division by 3 percent, while this hit was counterbalanced to a degree by price increases adding1 percent to the net sales figure. Looking ahead to the full year 2011, the company said it expects sales to grow by 3 to 5 percent, while organic sales should see increases of between 4 to 6 percent. Negative currency translations are forecast to impact sales by 1 to 2 percent.
Unilever fourth quarter sales and profits up
Fourth quarter sales and profits are up for Anglo-Dutch company Unilever, despite rising commodity costs. The company has reported sales for the fourth quarter of 2010 of €10.82bn, up 12 per cent on last year’s figures, with net profit up 15 per cent to stand at €1.04bn However, operating margin for the quarter was down slightly on last year, which largely reflects commodity costs, according to the company. “Commodity costs began to rise in the second half of the year,” explained a Unilever spokesperson. “Although this is not the same scale as in 2008, where we had a rapid spike in prices, in general for the future we do see commodity prices going up. How this affects the company will of course depend on which commodity,” the spokesperson said. In the fourth quarter, slight price increases allowed these rising commodity costs to be transferred to the consumer; although overall prices were down in comparison to last year.
Personal care, which accounts for about a third of the company’s turnover, reported sales of €3.5bn for the fourth quarter, representing a 5.6 per cent underlying sales growth. Unilever highlighted a number of products whose strong performance helped drive results, including Dove Men+Care in both the deodorant and skin care categories, as well as Dove Damage Therapy and Clear in the hair care segment.
Geographically, as with the majority of players in the industry, the emerging markets led the growth figures, reporting underlying sales growth of 8.5 per cent in comparison to 4.6 per cent for the Americas, and 1.1 per cent for Europe. For Unilever, India and Brazil are the strongest of the emerging markets, reflecting the heritage of the company and its long term presence in the regions, the spokesperson explained. “For the business as a whole we are late starters in China, we are investing slightly disproportionately in order to increase our market share,” the spokesperson said. The investment looks to be paying off in some segments, as the company is reporting strong double digit growth in skin and hair care in the country. Unilever also announced full year results for 2010, with sales up 11.1 per cent to reach €44.26bn and net profit up 26 per cent to reach €4.60bn.
Bausch + Lomb Announces Global Licensing Agreement With UltraVision CLPL to Market KeraSoft(R) Contact Lenses
Bausch + Lomb announced today a global licensing agreement with U.K.-based UltraVision CLPL to market and sell KeraSoft® soft contact lenses throughout the world, through the network of Bausch + Lomb lab channel partners. KeraSoft patented technology allows for custom-made contact lenses for irregular corneas and keratoconus. As part of the agreement, Bausch + Lomb acquired the KeraSoft trademark. The announcement was made at the Global Specialty Lens Symposium in Las Vegas. The global roll-out of KeraSoft lenses will begin later this year and will be executed around the world in phases.
"This technology has totally transformed my view of contact lens management of keratoconus and irregular cornea patients. The visual results and enhancement of life are true advances," said Joseph Barr, O.D., M.S., F.A.A.O., vice president, Global Clinical & Medical Affairs and Professional Services, Vision Care, Bausch + Lomb. Each KeraSoft contact lens is custom made for the patient's exact needs, making it an ideal fit for manufacture and distribution through the Bausch + Lomb custom lab channel network. By utilizing Bausch + Lomb distribution channels throughout the world, Bausch + Lomb and UltraVision plan to significantly increase the number of patients who are able to benefit from customized KeraSoft contact lenses. "Demonstrating our commitment to our laboratory partners, we are pleased to offer KeraSoft contact lens technology for those keratoconus patients looking for a soft lens alternative," said Jerry Warner, vice president, Marketing and general manager, Bausch + Lomb, Global Contact Lens. "Extending the KeraSoft technology allows the labs to expand the ability of practitioners to offer life-changing vision correction to a wider range of patients who have a variety of irregular cornea conditions resulting from keratoconus and pellucid marginal degeneration." Irregular corneas can be caused by a number of reasons including disease, trauma, corneal transplants and complicated laser surgery. Such patients can have considerably reduced vision that is not adequately addressed by standard contact lenses. Traditionally, patients with irregular corneas have been limited to hard or rigid gas permeable lenses which resulted in reduced wear time for some patients. KeraSoft lenses can increase wearing time for some of these patients.
KeraSoft lenses, which are recognized with the U.K.'s Queen's Award for Enterprise and Innovation, are a patented combination of the latest technologies in soft and silicone hydrogel materials using geometries from complex mathematics to offer comfortable wear and excellent vision. "We are delighted that Bausch + Lomb will be making KeraSoft contact lenses available around the world, through its lab channel partners," said J. Keith Lomas, Group President and CEO, UltraVision CLPL. "As more people are introduced to KeraSoft lenses by Bausch + Lomb, UltraVision CLPL will continue to serve its existing customers and maintain its core focus on research, development and licensing of advanced contact lens designs and technologies."
UK manufacturing growth at fastest since records began
UK manufacturing in January expanded at its fastest pace since records began in 1992, according to a survey by the Chartered Institute of Purchasing and Supply (CIPS). Employment in the manufacturing sector also rose at the fastest pace since the records began. The findings underline the importance of manufacturing to the UK's recovery. But the survey also showed factory costs rising, raising fears about growing inflation. The Markit/CIPS manufacturing Purchasing Managers' Index (PMI) expresses the health of the sector, with any measure above 50 indicating expansion. It reached 62.0 in January from an upwardly revised 58.7 in December.
The figures suggest the manufacturing sector continues to enjoy strong growth even as economic activity elsewhere remains subdued. Gross domestic product (GDP) fell by 0.5% in the last three months of 2010. Some economists said the CIPS data increased the likelihood of a rise in interest rates in the near future. Ross Walker of RBS, said the PMI brought forward the risk of a rate rise "sooner rather than later and brings February into play as a possibility". He added: "The only reason people think February is not a possibility is because of the GDP numbers... they [the MPC] might want to see more evidence of there being a rebound." Two of the Bank of England's Monetary Policy Committee members voted for a rise at their last meeting.
UK house prices rose 0.8% in January, Halifax says
UK house prices rose by 0.8% in January compared with the previous month, according to figures from the Halifax. But the lender, now part of the Lloyds Banking Group, said that prices had fallen 2.4% compared with a year earlier. The typical home in the UK now cost £164,173, it said. Overall during 2011, the lender is expecting little change in property values, although others have predicted prices to dip.
US consumer spending 'best in three years'
Consumer spending in the US grew at its fastest pace in three years during 2010, official figures have shown. Spending grew by 3.5% from 2009 the Commerce Department said, the best showing since a 5.2% rise in 2007 - before the country went into recession. The 2010 levels were helped by a strong December, where spending grew by 0.7%, the sixth consecutive month of growth.
Pound rises on UK construction data
The pound has risen to its highest level against the dollar in three months, buoyed by a return to growth in the construction sector in January. The Markit/CIPS UK Construction Purchasing Managers' Index rose to 53.7 in January, beating forecasts of 49.9. A reading above 50 indicates growth. In December, when heavy snow disrupted building work, the index read 49.1. After the release of the data, sterling rose 0.5% on the day to $1.6232, its strongest since 5 November. It also strengthened against the euro, rising 0.6% to 1.1741 euros. The pound was also boosted by a warning from Bank of England monetary policy committee member Andrew Sentance against delaying raising interest rates to tackle inflation. Bank of England deputy governor Charles Bean was also quoted as saying the Bank may have no choice but to increase rates if commodity prices rise further. CIBC currency strategist Jeremy Stretch said the bigger-than-expected rebound in construction "plays into the hands of the rate hike story". The rise in the pound, however, will not be welcomed by exporters as it makes their goods more expensive for foreign buyers. The construction data follows similar positive news from the manufacturing sector on Tuesday, which showed that UK manufacturing in January expanded at its fastest pace since records began in 1992.
January's construction figures saw an increase in activity in all three sub-sectors - housebuilding, civil and commercial - for the first time since August. Markit said an improvement in weather conditions at the start of the year helped to boost construction work, while there were also gains in new business. But it added that the number of people employed in the sector fell for the seventh month in a row. Chris Williamson, Markit's chief economist, said that after taking into account the impact of the weather in December, the underlying growth trend in January "remains only very modest". "The outlook appears to be one of nervous optimism," he said.
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