 |
Surplus Inventory for the Industrial Chemical Community www.magitsurplus.com Best if viewed at 800 x 600 screen resolution |
 |
Vol 1 No. 1 Online Edition July 9, 1999
Welcome to Volume 1 Number 1 of our World Wide Web based newsletter. We will use this forum to introduce late arriving items as well as items wanted which is content that was previously not supplied online or with our regular mailings. In addition, we will provide some news and commentary on the chemical industry, perhaps even including links of interest that relate to the news or commentary found here. Please feel free to e-mail us with your comments, suggestions, submissions for this newsletter, offers of items for sale and requests for items wanted. We hope to introduce regular features as we go along and though our plans are modest, the web is a brand new medium where the rules are still being formulated.
CHEMICAL INDUSTRY NEWS
Quote of the week - Regarding the announced Suez Lyonnaise des Eaux Group purchase of Nalco for $4.5 billion "We are optimistic that the significant industry consolidation {of the water treatment business} over the past 18 months should ultimately yield more rational competitors, eventually providing some relief from competitive pricing pressures." Solomon Smith Barney analyst Timothy Gerdeman, Chemical Marketing Reporter, July 5, 1999, Vol. 256, No. 1, p. 7
Gloom on the Financial front - "Sales, earnings and profitability sank; exports sank; the trade surplus really sank; price and production of industrial chemicals sank; productivity sank. In fact, practically everything but the kitchen sank." William Storck, Assistant Managing Editor for Business, Chemical & Engineering News, 28 June 1999, p. 5
Rohm and Haas/Morton - Rohm and Haas has completed it's $4.9 billion purchase of Morton International and is now the world's second largest producer of specialty chemicals, second only to Clariant. The combined company will operate five businesses; (1) salt, (2) coatings, (3) adhesives and sealants, (4) electronic materials and (5) plastics additives.
Viag buys oleochemicals and derivatives business from Witco - SKW Trostberg and Th. Goldschmidt are being merged into a single specialties company by German conglomerate Viag and are acquiring the oleochemicals and derivatives business of Witco. Witco has had the business on the block since January 1999. For you old timers out there, this is for the most part the old Humko and Sherex businesses acquired by Witco some years back. The deal does not include Witco's Memphis plant however. In another move, Witco plans to withdraw it's offer to sell the petroleum additives business.
For the most up to the minute chemical industry financial news - If you're here you are at least able to connect to the Internet, and if you're alive then you have heard of Yahoo!, the Internet business phenom. We'll reserve comment at this time regarding the realism of their stock price in relation to the usual standards of financial analysis. Nonetheless, they have a good thing going, and their chemical industry news page is the best on the 'net right now. You can visit them at http://biz.yahoo.com/news/chemicals.html . Another good Yahoo! site is their Biz page specific for Chemicals. You can visit it at http://dir.yahoo.com/Business_and_Economy/Companies/Chemicals/
COMMENTARY
Well, the US Federal Reserve has seen fit to raise interest rates a quarter of a point. Unemployment is still very low and the stock markets responded to the Fed by once again bidding stock prices to record highs. What does this mean over the short-term for our business? The Fed move was, in part, to stem rising inflation early in order to maintain steady growth. Certainly, working capital loan rates must rise due to the Fed rate move, but apparently capital is not in short supply. You can reduce these costs by reducing your dead inventory, overstock and surplus, turning the inventory into cash. This will reduce your interest burdens and increase cash flow. Remember, that surplus inventory on the floor is consuming your cash flow. Call us or visit our web site at xxx and send us a description of your list of dead, surplus or obsolete inventory.
In an environment of soft prices it is even more important to save money on raw materials. Remember, the most leveraged area to save on costs, and thus increase profit, is on the materials purchased side of operations. Even spot buys of small quantities can add to the bottom line. We have in stock many materials in good to excellent condition, often in sealed drums, ready to ship to meet your requirements. Many of these materials are on-spec, but simply are aged or labeled with the name of a company which has been acquired, was in warehouse stock at the time of the change and/or was packaged in a drum with the old company's color scheme. Chem-Find can be relied upon to provide quality surplus chemicals priced as low as pennies on a dollar! See our current mailer at xxx and our current physical inventory list at xxx to see what we have in our current offerings.
Consolidation in our industry continues at a rapid pace. Will we become one, super-conglomerate chemical company in the Brave New World? Is this a cyclical trend or a major economic shift? We noted a recent edition of the ACS (American Chemical Society) weekly, Chemical & Engineering News has changed their "Top 100" list to a "Top 75", mainly due to mergers and acquisitions. If this is an economic shift, our bet is that the name of the super-conglomerate MUST be ACME Chemical Co.(with acknowledgments to WB, Bugs and Wiley E. Coyote). The other choice would be an unpronounceable super-hyphenated-mega-name that will likely be known by some acronym.
Speaking of economic dislocations, the domestic (US) textile industry continues to take it on the chin. The migration of this manufacturing sector to lower wage cost areas of the world continues. Nonetheless, some textiles remain strong. Automotive textile products, for example, remain strong due to the thriving domestic market for automobiles, especially SUV's, which consume proportionately larger amounts of textile products than sedans or subcompacts. Home furnishing and carpeting also remain strong, but almost all other sectors of textiles are becoming extinct domestically. The result is that smaller chemical companies which relied on the textile market for their sales are closing down, learning second and third languages in order to continue selling textile chemicals or are being purchased by larger companies, some of which are not American firms. Despite the vigorous overall domestic economy, the textile market is mired in a prolonged downturn with no change for the better in sight.
On the political front it looks like our First Lady (Hillary Rodham-Clinton) is going to run for Sen. Monyihan's seat in New York state. Since we're not from New York we are a bit ambivalent about this, but will watch with interest as the story develops. A race with Rudolph Guiliani for the senate seat will no doubt have great entertainment value. It will also be a contrast in political philosophy and perhaps a bellwether for the current political environment of the country. Stay tuned............