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Huntsman Textile Effects: Prospects Under New Ownership
Textiles Intelligence, Aug 2007, Pages: 32
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.
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