Chemicals Producer Cytec Technologies Shows Significant Turnaround from Previous-Year Doldrums

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Researched by Industrial Info Resources (Sugar Land, Texas)--Specialty chemicals and materials company Cytec Industries Incorporated (NYSE:CYT) (Woodland Park, New Jersey) recently reported earnings results for the second quarter of the company's 2010 fiscal year. Net earnings for the quarter were $61.8 million, a significant gain from the $24.8 million loss Cytec experienced in the second quarter of 2009. Net sales of $874 million were up 27.6% year over year.

While sales across all five of Cytec's business segments were up significantly from 2Q09, star performers included the following:

• Coating Resins - sales increase of 25% to $369 million
Sales in this segment were up due to stronger demand across all product lines in all geographic regions. "Selling volumes were up by 27% versus the prior-year quarter due to strengthening global demand in the industrial coating markets, as compared to a period of significant destocking in the first half of last year," said Cytec Chairman, President and CEO Shane Fleming in a conference call.


• In Process Separation - sales increase of 22% to $71 million
"Sales volumes were up by 22% versus the prior-year quarter, driven primarily by higher production of both alumina and copper by our customers in Europe and Latin America, as well as strong demand for our phosphine gas products sold in the fumigant and electronics markets," said Fleming.

Cytec describes itself as the "largest supplier of mining reagents in the world" and offers several specialty chemicals and technologies for metals and minerals extraction. The company's phospine products are used a wide range of markets, including agricultural fumigants and the manufacture of silicon semiconductors.


• Building Block Chemicals - sales increase of 89% to $172 million
Speaking of this segment, Fleming said: "Selling prices were up 75% versus the prior-year period, driven by significantly higher propylene costs and a tight global supply situation that favorably impacted the price of acrylonitrile. Selling volumes increased by 14%, primarily due to improved demand for melamine."

While simple inventory restocking cannot be taken for a primary indicator of an improving economy, Cytec's second-quarter performance seems to bode well not only for the Chemical Processing Industry (CPI), but also for a broad range of industrial sectors, including mining, agriculture, plastics and rubber production, and electronics.

Industrial Info is tracking several Cytec projects in North America, including planned turnarounds, plant additions and equipment rebuilds. The company is currently under way with construction on a carbon fibers plant addition in Piedmont, South Carolina. The $250 million project began in the summer of 2008 and still has approximately two years before completion. Market conditions during the economic recession consistently forced Cytec to delay the project's completion date. Industrial Info has been tracking this project since the site-selection process in 2006 as part of our North American Industrial Database.

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