Chemtura planning to sell AgroSolutions agricultural chemicals business, is in second round of bids as of Feb. 25, says CEO; division produced US$449M in sales in 2013
March 17, 2014
(The Philadelphia Inquirer)
– Do you want to buy an agricultural chemical business?
Not everybody does. But if you do, hurry.
Chemtura Inc., a member of the Philly 50 list of companies with headquarters in the area and the highest market capitalizations, is continuing to restructure and is selling its division that produces chemicals that help grow food.
In 2013, that division produced $449 million in sales, a bit more than 20 percent of the company's total of $2.2 billion. But it is, apparently, beyond the core of what Chemtura does well or wants to do.
Though he offered no specifics, chief executive officer Craig Rogerson told financial analysts Feb. 25 Chemtura was in the second round of bids for what it calls its AgroSolutions business.
If a sale is completed, perhaps by the middle of this year, Rogerson said, it would transform Chemtura "into a pure-play industrial specialty chemicals company, one that is very well positioned to grow in our targeted end markets and to deliver improved margins and cash flow."
Investors will be watching because a profit of $103 million in 2012 changed to a loss of $22 million in 2013.
Besides agricultural products, Chemtura makes chemicals that end up in manufactured items from the automotive, building and construction, pharmaceutical, electronics, packaging, and transportation industries. The products include flame retardants, urethanes used in plastics, petroleum additives, organometallics (organic compounds of carbon and metals), and grease. That's very high-tech grease, not the stuff you scrape off a frying pan. Rogerson noted a new plant in Nantong, China, had just started producing synthetic grease.
Rogerson has been reshuffling Chemtura in the last few years, in part because it got squeezed in the 2008 financial crisis to the point of declaring Chapter 11 bankruptcy in 2009. That was about 90 days after Rogerson took over, after having engineered the sale of Hercules Inc. in Wilmington.
Chemtura has about 3,500 employees worldwide. About 450 work at its former headquarters in Middlebury, Conn., and in a nearby research facility, but Rogerson and much of the executive leadership moved to Center City. However, some moved out completely in 2013.
"We reduced over 20 percent of the top management positions in our businesses and functions," Rogerson said.
Chemtura has 31 manufacturing sites in 13 countries and sells in more than 100 countries -- including Ukraine -- so Rogerson spends a good chunk of time traveling, which is easier to do from Philadelphia than from Middlebury.
In 2013, Chemtura sold its antioxidants business, including manufacturing plants in the U.S., France, and Germany, and sold the consumer products division. The second deal was done in December, and Rogerson hopes the "stranded costs" associated with that divestiture will be completed by the end of March.