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Elementis Pigments is a world-leading producer of a broad range of synthetic iron oxides and complementary products. These products serve a variety of global industries, including paint and coatings, construction and building products, plastics, paper and cosmetics. |
2003 Highlights
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Continued improvement in financial results
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New product introductions broadened product line
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Increased market penetration in the North American construction sector
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Tight cost controls in place
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Construction started for new Chinese plant
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Successful restructuring of operation at Birtley, UK
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Business review for 2003
Elementis Pigments achieved an increase in US dollar sales from continuing operations and US dollar operating profit in 2003, despite the generally difficult business environment. The same trends were evident on a constant currency basis. The important paint and coatings market is mature worldwide, with market volume growth for Pigments products in North America, for example, estimated at between zero and 1 per cent in 2003. The market was negatively impacted in 2003 by a combination of economic uncertainty and poor weather, particularly in the Eastern United
States. The chemicals market showed variable
worldwide trends, with the printing market
growing at an estimated 8 per cent per annum,
while the carboxylates market remained over-supplied. Sales growth has nevertheless been
achieved by leveraging customer relationships
and broadening the product portfolio, with
several product lines experiencing double digit
year on year volume growth.
Operating profit improved over the previous
year as higher energy costs were more than
offset by lower manufacturing costs and
positive currency effects.
Tight cost control measures remained in
place throughout 2003. Additional cost and
operational efficiencies were achieved through
a commitment to Six Sigma programmes and
stable operations initiatives.
Growth in productivity for a number of operations, such as paint dryer and toner black production, resulted in increased customer service levels, scheduling flexibility and cost absorption.
During 2003 the Elementis Pigments operation based in Birtley, UK, was successfully restructured. Construction also began on a new plant at Taicang, China, which will be the second Elementis Pigments manufacturing base in the region. Full commissioning of the new plant is expected to take place in late 2004. Increasing the percentage of manufactured products sourced from the Elementis Pigments Asian supply base is an important factor in revenue growth.
Implementation of the Elementis ERP system is expected to take place in mid 2004. Anticipated operational benefits include improved supply chain visibility.
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