In December 2019, several international chemical giants, including basf and clariant, announced the sale or transfer of some of their businesses. In 2019, under the impetus of the environment, especially in the fourth quarter, when the evonik arkema, lanxess, and huntsman, sherwin-williams several international chemical giant announced a similar decision, some of its business, plant, equipment, or even subsidiary equity stripping, sale and so on, makes every effort to carry on the transformation and upgrading, to improve the poor earnings, and so on and so forth.
In the fourth quarter of 2019 alone, news of a sale by an international chemical giant has been rife. Basf announced the sale of its construction-chemicals business to lone star, a us private equity firm, for 3.17 billion euros, while clariant agreed to sell its previously announced sale of its masterbatch business to plyvann for 1.56 billion dollars. The restructuring of the two companies has also received widespread attention from the global industry.
In addition to the high-profile business changes at basf and clariant, other international chemical giants are making similar moves. In the fourth quarter of 2019, fulu announced the sale of its tile coating business to a Spanish pigment company. Dupont is selling its nutrition and biosciences division to International Flavors & Fragrances(IFF) for $26.2 billion. Xuanwei completed the asset sale of a wholly-owned subsidiary of zhaoqing, China. Kansai coatings Co. sold its joint venture in China, closed a factory in the country and plans to discontinue kansai coatings Europe LTD. Lanxers sold its 74 per cent stake in rustenburg chrome mines in South Africa to Clover Alloys, a South African supplier of chrome powder. Costron officially completed the sale of its European polyurethane systems business to H.I.G. capital. Arkema announced plans to spin off its functional polyolefin business into SK integrated chemicals, while arkema further transformed into specialty chemicals and advanced materials. In the fourth quarter of 2019, almost everyone has a share in the business adjustment.
In addition, there were a number of high-profile business sales in the third quarter of 2019, such as basf's sale of its ultrafiltration membrane business to dupont and its pigment business to DIC. Costron also signed an agreement to sell its European polycarbonate panel business to the Serafin group.
For international companies, business restructuring has always been common, and many have their own business restructuring plans. However, such a concentration of business adjustment is not rare, and the period before the large-scale mergers and acquisitions of international enterprises in sharp contrast. In fact, the concentrated business adjustment is a reflection of the poor profitability and profit reduction of international enterprises, and also a microcosm of the overall economic situation in 2019 that is less than expected.
Since the second quarter of 2019, due to the impact of the world economic situation, the profitability of many international chemical giants has been poor, and the indicators of net profit and sales have declined compared with the same period of 2018. Basf, dupont, dow and mitsubishi chemical holdings have all experienced similar situations. Chemical companies' second quarter 2019 reports showed that sales of chemicals fell almost across the board, with the industrial chemicals sector in trouble and commodities such as cars, housing and high-end electronics also suffering, resulting in lower-than-expected sales of a wide range of consumer chemicals. The situation did not improve much in the third quarter of 2019, with basf, lanxess and clariant reporting small declines in net profits.
Falling profits and rising costs have forced international chemical giants to cut costs and accelerate their transformation. Basf, for example, has long had plans to spin off pigments and construction chemicals, and its CEO, brudermuller, said in the fall of 2018 that it would spin off its chemical building materials business, which was not as well coordinated and profitable as expected. Many companies, including lanxess and clariant, have also pursued high - yield business objectives. However, the fact that the decisions of enterprises are concentrated in December 2019 not only reflects the decisiveness of the above-mentioned enterprises for the implementation of corporate strategy, but also reflects the urgency of transformation brought by the overall economic situation.
If the transformation strategy is carried out, the international chemical giants will get better development opportunities. Following the sale of the masterbatch business, clariant executive chairman haili kuo said: "clariant is focused on a path of above-market growth, higher profitability and stronger cash generation, and this transaction is an important milestone in the development of clariant's business." Clariant's future, he asserts, will be newer, more focused and stronger.
