The Woodlands, Texas – Huntsman generated almost 50% more EBITDA from its MDI business in the second quarter of 2018 than in Q2 2017.
In the 2018 quarter EBITDA was $246 m in the second 2017 quarter it was $165 m in the 2017 quarter.
Peter Huntsman told analysts on a conference call that the ‘MDI business delivered 9% volume growth year-over-year. We grew our differentiated portfolio by 13% year over year. Excluding Demilec, we grew 10% year-over-year.’
The largest growth came in the Americas. Compared with the 2017 quarter, sales in this region were up 21%.
Part of this increase was due to Demilec. Huntsman announced the that it would buy Demilec in the first quarter of this year. This new business added about 5% on top of sales from the underlying business.
US growth was also helped by the start-up of the joint venture MDI plant with BASF in Shanghai. This new plant is starting to sell volumes into the local Chinese market. That means that material from US plants is free for the local market, he added. North American demand is being driven by composite wood products, insulation and adhesives.
In Asia, volumes were up by 8% in the 2018 quarter. Automotive projects and demand for large-scale infrastructure projects such as district heating are driving this region at the moment.
The new China facility is starting up and it will be fully operational by the end of the year, he added.
In Europe, problems at a third party hit sales volumes and took the shine off sales by around $ 20m. But ‘underlying demand fundamentals remain positive in Europe and the market is growing,’ Peter Huntsman reassured analysts.
Peter Huntsman said that he estimated 75% of his company’s MDI business now comes from higher-margin differentiated systems business. Huntsman finds these attractive because ‘we see the margins in this business as being stable and steady,’ he said.
Sales in the first half of 2018 were $4.6 bn at the firm, up 18% on $3.9bn recorded in the first half of 2017. Gross profit across the business was $1.1 bn in the first half of 2018. This compares with $ 895 m in the 2017 half.