Arch chemicals expecting record year thanks to personal care demand
The chemicals company announced sales for the first quarter of 2011 of $325.5m, compared to $298.7m for the first quarter of 2010. Segment operating income was $11.9m in 2011, compared to $13.1m in 2010.
“Boding well for 2011, we experienced record quarterly demand for our biocides used in health and hygiene applications and in skin care cosmetics, while sales of our biocides for building products grew approximately 20 percent," said company CEO Michael E. Campbell.
Growth lies in innovation
"Our business teams are aggressively growing sales from innovative products, emerging markets and new applications for existing products, as well as by expanding market share."
Biocides Products reported sales of $268.1m and operating income of $19m in 2011, compared with $254.6m and operating income of $21.8m in 2010.
Personal care and industrial biocides grew 3 percent on last year with sales of $83m and the company attributes this to higher volumes.
Arch says the higher volumes were primarily due to increased demand for biocides used in industrial and health and hygiene applications, mostly offset by lower demand for biocides used in anti-dandruff products, which was accredited to the timing of shipments.
“The reduced shipments of our biocides for antidandruff products in the quarter were due to timing, and based on discussions with our customer, we expect 2011 total volumes to be higher on a year-over-year basis,” Campbell added.
Operating income for the segment decreased $2.2m as the higher volumes were more than offset by foreign currency gains in 2010 and, to a lesser extent, higher product costs and lower pricing.
Positive outlook
For the second quarter, the Company anticipates an overall improvement in the Biocides Product segment in both the US and in Europe.
As Arch enters its peak seasonal earnings period, it reaffirms its full-year guidance that there will be an increase of five to seven percent over 2010 as a result of strong organic growth from the Biocides Products segment, and operating income margins are expected to be approximately 8.5 percent.
"We continue to believe that 2011 should be another record year for Arch Chemicals, as we are well positioned to capitalize on profitable, global growth opportunities in both emerging and recovering markets,” explained Campbell.
