There's apparently a new rumor making the rounds of an incipient sale of CYT's Water Treatment Chemicals business. This time, the alleged buyer is Kemira.
Does anyone know anything more definitive about this?
Although I'll neither confirm nor deny your conclusion, the conclusion is logical. And you are? (try email if you don't want to go public).
We disagreed on product/business synergies and I dredged up the past. Unfortunatly I haven't heard much that would indicate any significant culture shift. is the rest of the company imbued with the same culture? I haven't a clue. Maybe not, since they seem to be making money.
Logic has very little to do with how a business operates unless you define as logical the very unique operating style of the business. I crossed the picket line at Fortier but spent most of my time in KZ. Everything I mentioned happened. Does any of your experience include the highly attended budget reviews at KZ with skilled management types fighting over allocations, refusing to give tentative budgets, actually saying that they would budget a product on another plant and make it somewhere else or eat the real dollar shipping costs. My experience includes this. My limited logic indicates that manufacturing costs are somewhat related to volume. Business logic didn't for some reason.
The demise of water treating was inevitable given that the research model was home runs instead of consistent hits and the business model was pay attention to only the high dollar customers. Include the inability to rationalize and stremline manufacturing and you end up very non-competitive. Getting out of paper was the death knell for water treating and mining, because you lose that synergy. When I was a customer cytec's products were mediocre ($$/million gallons treated) and no support because I was not a high dollar customer. My little buy went to the best price/million gallons and best support. As a competitor, they were easy to beat unless the customer wanted a big name company.
When I was there, some of the best and brightest people I've known professionally worked for Cyanamid/Cytec. A few still do, but most do not. Cytec developed a management culture that really stifled innovation. My ties to Cytec are financial, and for that reason, I hope they do very well.
Cytec sold its water treatment chemicals and acrylamide product lines to Kemira Group for approximately $240 million cash. (The business will have 2006 sales of about $300 million). What a hoot !! Ever been to the Mobile plant?? I wouldn't give $200,000 for the entire operation. And Longview? Many people have pole barns in their backyard larger than this plant. Never been to Bradford or Botlek, but I could only imagine. Let's see, there is the tiny operations at Kalamazoo. Now Fortier, there is some value there. I may change my opinion of Lilley-Pad. He got 6 times what this operation is worth. Go David !!! Now go take the money and re-purchase 6 million shares. Just like the other $400 million you flushed so far repurchasing shares. (Remember Cytec stock was $50 a share in .. in ..in..1997 !!!!) Up up and .... no way !!!!!