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TiO2 firm Venator with ‘decent’ start in 2019 – CEO

TiO2 firm Venator with ‘decent’ start in 2019 – CEO2019.02.21

Venator is off to a good start in 2019, with customer destocking expected to continue to decelerate in the current first quarter, said the CEO of the UK-based titanium dioxide (TiO2) producer in an update on Wednesday.


Destocking already decelerated in the fourth quarter, with Venator’s TiO2 sales volumes declining by 6% year on year, compared with an 18% decline in the third quarter, Simon Turner told analysts during the company’s Q4 earnings call.

“We are encouraged that we have seen a relatively decent start to the year, and we believe [destocking] will diminish,” he said.

“While it is early, [2019], from an order perspective, got off to a decent start,” he added.

In the near term, Venator expects difference in regional performance, with strength in North America, slower growth in Europe and weakness in China.

In North America, TiO2 prices are expected flat or up, but there would be “a little bit of near-term slippage in pricing” in other regions, he said.

Energy and raw material cost escalation is expected to continue in the first quarter, especially in higher grade chloride feedstocks, he said.
For the full year, the company expects higher TiO2 sales volumes than in 2018.

Notwithstanding the soft economic backdrop in 2019, longer-term TiO2 industry fundamentals remain favourable, with continuing global demand growth outpacing limited new supply, the CEO said.

NEW BUSINESS IMPROVEMENT PROGRAMME

Venator also launched a new business improvement programme, following a similar programme launched in 2017.

The 2019 programme targets $40m in annual adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) benefits by end 2020.

About 25% of the new programme relates to selling, general and administrative expense (SG&A) “compression and manning reductions”, Turner said.

Another 25% relates to improvements in Venator’s performance additives segment.

The remaining 50% targets TiO2 manufacturing costs and efficiencies -  in particular increasing co-product benefits, improving maintenance effectiveness and reductions in energy use, Turner said.

The effects of the existing programme and the new ones will offset much of the raw material cost inflation, he added.

Source: ICIS


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