Citation
(2006), "Air Products announces strategic initiatives to further strengthen growth businesses", Pigment & Resin Technology, Vol. 35 No. 6. https://doi.org/10.1108/prt.2006.12935fab.026
Publisher
:Emerald Group Publishing Limited
Copyright © 2006, Emerald Group Publishing Limited
Air Products announces strategic initiatives to further strengthen growth businesses
Air Products announces strategic initiatives to further strengthen growth businesses
Air Products, Lehigh Valley, PA., announced a series of strategic initiatives to strengthen and expand its growth platforms, improve its return on capital and return value to its shareholders.
The company is exploring the sale of its amines and polymers businesses; restructuring its polyurethane intermediates business, including plans to sell its dinitrotoluene (DNT) facility in Geismar, LA; and investing in its performance materials business with the acquisition of specialty-surfactants producer Tomah3 Products. These actions will enable the company to further sharpen its focus on its four growth platforms: energy and process industries, electronics, homecare, and performance materials, as well as its position in the Asia region. The company also is accelerating its return of cash to shareholders through a $1.5 billion share-repurchase program and an increase in its quarterly dividend from $0.32 to $0.34.
John Jones, Air Products' Chairman and Chief Executive Officer, said, “The initiatives we have announced are consistent with our growth strategy and reflect the discipline of our ongoing portfolio management process. These actions will make Air Products a more-focused, less-cyclical and higher-growth company.”
The amines business generated approximately $300 million in revenues in FY2005. Amines production facilities are located in Pace, FL; St Gabriel, LA; and Camacari, Brazil. The consolidated Air Products Polymers joint venture with Wacker Chemie AG of Germany had approximately $550 million in FY2005 revenues with six manufacturing facilities including South Brunswick, NJ; Piedmont, SC; Calvert City, KY; Elkton, MD; Ulsan, Korea; and Koln, Germany.
As part of its polyurethane intermediates business restructuring, Air Products announced that it has reached an agreement in principle to sell its DNT production facility in Geismar, LA, to BASF Corp. for $155 million. The transaction has received regulatory approval and is expected to close by the end of the month, subject to finalization of documents. The plant is located on property leased to Air Products at BASF's major manufacturing site in Geismar. The Air Products industrial gas facilities at this same location are not included in this proposed transaction and will continue to produce and supply hydrogen, carbon monoxide and syngas for BASF and other customers. This transaction does not include Air Products' Pasadena, Texas, polyurethane intermediates facility, which continues to operate.
Air Products has signed a definitive agreement to acquire Tomah3 Products of Milton, WI, for approximately $115 million in cash. With sales of $73 million in 2005, Tomah produces specialty surfactants and processing aids primarily for growth segments of the institutional and industrial-cleaning, mining and oil-field industries, among others. The agreement is subject to regulatory approval and is expected to close by the end of March. For more information, visit www.airproducts.com/