Huntsman Textile Effects: Prospects Under New Ownership

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Huntsman Textile Effects: Prospects Under New Ownership
Huntsman Textile Effects is owned and operated by Huntsman Corporation—one of the world's largest manufacturers of differentiated chemical products. The term textile effects is used to describe treatments which provide textiles with special properties, such as comfort, easy care, freshness, oil and water repellency, and protection against bacteria, flame, fungi and ultraviolet radiation.
The Textile Effects business was originally owned by Ciba Specialty Chemicals. It was sold to Huntsman in 2006 for a consideration of Swfr332 mn (US$265 mn). Huntsman then embarked on a US$135 mn restructuring initiative to reorganise the business. As part of an agreement with Ciba to rename its products, Huntsman Textile Effects launched a new branding concept on April 2, 2007.
Huntsman Textile Effects generated a turnover in 2006 of about US$1 bn. In the same year it had approximately 4,200 employees working in 11 manufacturing locations in eight countries as well as in 40 sales and technical service centres around the world.
Demand for Huntsman Textile ...
... Effects' products is expected to remain stable in 2007. This stability—coupled with momentum resulting from the restructuring initiative and a corporate culture which is open to innovation—will stand the business in good stead until the end of 2008.
That said, the future of Textile Effects has become uncertain following an announcement in July 2007 that Huntsman is set to be taken over by Hexion. Assuming the takeover goes ahead, the Textile Effects business will contribute only a tiny percentage to the new owner's revenues and profits. As such, its development over the short term will depend heavily on the views of Hexion's executives. If they deem that Textile Effects is able to deliver organic growth, future investment in the business should be relatively secure. But if they perceive it to be a low priority, Textile Effects may have to compete more fiercely for funding than it did under the ownership of Huntsman
SUMMARY
INTRODUCTION
PRODUCTS AND SERVICES
Brands
High IQ
Textile printing

NEW MARKETING AND BRANDING STRATEGY
Simplicity and innovation

MARKETS
Textiles for aircraft, automobiles, boats and trains
Tailor-made polymer coatings for functional textiles
Acrylate coatings
Polyurethane and silicone rubber coatings
Styrene rubber butadiene (SBR) latex
Domestic and industrial textiles: high performance applications for multi-functional products
Protection and barrier functions
Cleaning and care
Safety and strength
Structure and support
New market: protective workwear
Regional markets
Price increases

RESTRUCTURING COMPETITORS

RESEARCH AND DEVELOPMENT

STRATEGIC ALLIANCES
DuPont and Invista
Monforts
Brückner
Thomson Research Associates (TRA)
Schoeller

FINANCIAL PERFORMANCE

STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS
Strengths
Weaknesses
Opportunities
Threats

OUTLOOK

APPENDIX 1: HUNTSMAN CORPORATION -- COMPANY DEVELOPMENT

APPENDIX 2: HUNTSMAN CORPORATION -- STRATEGY
Focus on differentiated products
Divestment

APPENDIX 3: HUNTSMAN CORPORATION -- CORPORATE RESPONSIBILITY
Common standards
Community awareness and outreach standards
Distribution safety standards
Emergency preparedness and response standards
Health and safety standards
Environmental standards
Process safety standards
Product steward standards

List of tables
Table 1: Huntsman Textile Effects: brand portfolio, April 2007
Table 2: Huntsman Textile Effects: financial performance, 2006 and 1 qtr 2007

List of figures
Figure 1: Huntsman Textile Effects' antistatic technology
Figure 2: Huntsman Textile Effects' breathable technology
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