Photo courtesy of Croda
UK-based specialty chemical company Croda International said it is strategically reviewing its Performance Technologies and Industrial Chemicals (PTIC) businesses. Croda’s lubricants portfolio, under its Energy Technologies unit, forms part of its Performance Technologies business.
Personal Care, Life Sciences and Performance Technologies roughly represented one-third each of Croda’s group revenues in 2020. Industrial Chemicals represented only 7%. However, in terms of operating profit, both Personal Care and Life Sciences brought in roughly 40% each, while Performance Technologies lagged behind (17%) and Industrial Chemicals posted a loss.
The scope of the strategic review will focus on the businesses and activities within PTIC that do not directly support its more profitable Personal Care and Life Sciences businesses, Croda said. The review is to be completed by the end of this year.
The review will assess whether the full potential of PTIC can best be delivered under Croda, as a stand-alone business, or via a full or partial divestment. It will consider the extent of the mutual dependencies between PTIC and the rest of Croda, the practicality of all options, whilst prioritising the best interests of all stakeholders, including employees, customers and shareholders, the company said.
Part of Croda’s lubricants portfolio came from its purchase of ICI’s oleochemicals and surfactants business, Uniqema, for GBP410 million (USD740 million) in cash in 2006. Croda’s purchase of Uniqema created a chemical company with sales of nearly GBP1 billion.
Revenues from performance technologies declined from GBP430.2 million (USD606.3 million) in 2019 to GBP416.4 million (USD586.9) in 2020, while industrial chemicals declined from GBP111.8 million (USD157.5 million) to GBP96.4 million (USD135.8 million).
Operating profits from performance technologies declined from GBP69.4 million (USD97.8 million) in 2019 to GBP54 million (USD76.1 million) in 2020, while industrial chemicals declined from GBP1.1 million (USD1.5 million) to negative GBP0.3 million (-USD0.42 million).
“While continued Covid-19 restrictions make the near-term outlook for elements of our consumer care and performance technologies sectors difficult to predict, 2020 sales exit rates were encouraging with consumer and industrial end markets showing signs of recovery,” Croda said in March 2021. Its deal to supply additives for Pfizer’s Covid-19 vaccine will help support future growth in its life sciences business, the company added.