FINANCE
Chemical industry off to a sunny 2017 First-quarter earnings surpass expectations thanks to strong sales, pricing Chemical firms releasing first-quarter chemicals. Overall, BASF raised earnings financial results are reporting strong de23% compared to the first quarter of 2016 to mand for a broad range of products includalmost $1.9 billion. ing seeds, electronic materials, and even At DuPont, sales rose mainly due to textile dyes. Several firms posted earnings demand from outside the U.S. For examgrowth that exceeded expectations. ple, the firm saw strong demand for corn Both volumes and prices were up at Dow hybrids in Brazil and sunflower varieties Chemical, as the company reported gains in Europe. In addition to seeds, DuPont across businesses serving packaging, transdid a brisk business in specialty polymers portation, infrastructure, consumer care, for auto manufacturing and in electronic and electronic materials. What’s more, dematerials for semiconductors, consumer mand growth was strong across China, the electronics, and photovoltaics. U.S., and Europe. In a conference call with analysts, DuCEO Andrew N. Liveris linked Dow’s Pont CEO Edward D. Breen credited the strength in operations to the growing globcompany’s new product innovations as well al economy. He touted the firm’s 14 straight as better-than-expected conditions in end quarters of year-over-year volume gains markets for boosting earnings 8% to more and an even longer stretch than $1.1 billion compared of earnings growth. Livto last year’s first quarter. eris said he continues to Chemical firms saw robust, At Ashland, consumer expect Dow’s merger with broad-based demand. demand for personal care DuPont to be completed products and pharmaceuby the end of August. Sales Earnings ticals containing its speIndustrial demand gave AkzoNobel cialty ingredients helped 7% 0% BASF room to hike basic the firm raise prices to Ashland 6 5 chemical prices an avermake up for higher raw BASF 19 23 age of 8% in the quarter. material costs. It also saw Celanese 5 –6 And like Dow, BASF saw stronger sales in industrivolumes increase broadly al products such as comCovestro 25 157 in basic chemicals, perposites, intermediates, Dow Chemical 11 22 formance products, and and solvents. Compared DuPont 5 8 functional materials. It to last year, Ashland’s Huntsman 5 58 also posted slightly higher earnings were up 5% to sales in crop protection Source: Companies $121 million.
First-quarter results
Strong demand from European sunflower growers brightened DuPont’s firstquarter results. Strong market conditions for polyurethanes gave Huntsman Corp. an opportunity to raise its prices for methylene diphenyl diisocyanate. And it sold 10% more performance products than in the year-ago quarter. Textile chemicals and dyes were big sellers in Asia, Europe, and South America. Covestro, the former materials business of Bayer, saw overall volumes expand by 9% and prices soar more than 13% from last year on the strength of its polyurethanes portfolio and demand for coatings and adhesives. The firm’s polycarbonate business benefited from higher sales to auto and consumer electronics manufacturers. Frank H. Lutz, Covestro’s chief financial officer, said the company is in a strong position to benefit from the growth in its customers’ industries. “Our optimism for fiscal year 2017 was confirmed in the first quarter,” he said.—MELODY BOMGARDNER
PHARMACEUTICALS
CREDIT: DUPONT
Fresenius pushes further into generics Fresenius, a diversified life sciences company based in Bad Homburg, Germany, plans to diversify further via two acquisitions. The company says it will acquire Akorn, a Lake Forest, Ill.-based developer and manufacturer of generic drugs, and the biosimilars business of Merck KGaA. The company will pay $4.3 billion for Akorn, which manufactures animal health and over-the-counter consumer health products in addition to generic prescription drugs. Akorn, which logged sales of about $1 billion last year, employs 2,000 people. It operates three research facilities and five manufacturing
plants in the U.S., Switzerland, and India. Fresenius will pay $185 million up-front for the Merck business, which includes a development pipeline focused on generic versions of biopharmaceuticals to treat cancer and autoimmune disease, therapeutic areas with a $30 billion annual market for branded drugs, Fresenius notes. The deal could include milestone payments of $544 million plus royalties. Fresenius CEO Mats Henriksson says the Akorn acquisition will serve to diversify the company’s activities in the U.S., which includes Fresenius Medical Care North America, a dialysis services business. The purchase
also expands the company’s generic drugs lineup. “Akorn brings to Fresenius specialized expertise in development, manufacturing, and marketing of dosage forms currently not available in our portfolio,” he says. The deal for Merck’s biosimilars creates a “new platform for growth” in the company’s injectable pharmaceuticals business. For its part, Merck elected to sell the business to focus on branded biopharmaceutical development. “We have increasing confidence in our biopharma pipeline, and this transaction will help prioritize innovative drug development,” board member Belén Garijo says.—RICK MULLIN MAY 1, 2017 | CEN.ACS.ORG | C&EN
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