Specialty chemical company Albemarle Corporation (ALB) has signed definitive agreements to form a joint venture with Shanxi, China-based coal and bauxite mining company Senze Meilu Company.
On receipt of the necessary approvals from the relevant Chinese government authorities, the joint venture named “Albemarle Senze Chemicals (Shanxi) Company, Ltd.” will build a new 50,000 MT facility in Lvliang, Shanxi, to make MARTINAL fine precipitated alumina trihydrate (:ATH) flame retardants based on Albemarle's proprietary technology, mainly used in wire and cable applications. Production at the new facility is expected to start by mid-2015.
Albemarle, which will hold a majority stake in the joint venture, will market MARTINAL in the high-growth Asia-Pacific and Indian markets.
This agreement will position Albemarle as a premiere player in the flame retardant technologies and markets globally. It will also enhance Albemarle’s place in the rapidly growing wire and cable markets in Asia and India and complement Albemarle's existing world scale production facility in Bergheim, Germany.
MARTINAL, an eco-friendly, mineral-based flame retardant and smoke suppressant is used in a wide range of polyolefin resins. Low-smoke wire and cable applications are the largely used applications in the energy sector which is gaining momentum from rising energy consumption in China and Asia-Pacific.
Albemarle came out with its first-quarter 2013 results last month. The company reported adjusted earnings (excluding non-operating items) of 93 cents a share in the quarter compared with $1.20 a share earned in the year-ago quarter. The results fell behind the Zacks Consensus Estimate of $1.00, reflecting a negative surprise of around 7%.
Profit, as reported, was $84 million or 94 cents per share. This represents a roughly 26.5% decline from $114.3 million or $1.27 per share posted in the prior-year quarter.
Revenues decreased 9.8% to $641.6 million in the quarter from $711.7 million in the year-ago quarter, missing the Zacks Consensus Estimate of $674 million. The results were impacted by Albemarle’s exit from the phosphorus flame retardants business, lower metals surcharges and pricing on some products.
Albemarle currently holds a Zacks Rank #4 (Sell).
Other companies in the chemical industry having favorable Zacks Rank are Shin-Etsu Chemical Co., Ltd. (SHECY ), Celanese Corporation (CE) and Methanex Corporation (MEOH). All of them hold a Zacks Rank #1 (Strong Buy).
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