Feb. 12 (Bloomberg) -- Huntsman Corp., the third-biggest producer of titanium dioxide, said DuPont Co. should further delay the start of new capacity for the white pigment known as TiO2 to avoid aggravating an industry over-supply.
DuPont probably won’t start production from a proposed TiO2 plant in Altamira, Mexico, until early 2016, Huntsman Chief Executive Officer Peter Huntsman said by phone today. DuPont, the world’s biggest TiO2 maker, said on Feb. 7 that production from the new line will be delayed as long as 12 months until sometime in 2015 because of weak demand.
“I’m still surprised they are going forward with that plant,” Huntsman said in the interview. “The industry needs that tonnage like they need a hole in the head.”
DuPont remains confident in the Altamira investment and the timing of the expansion, Mike Hanretta, a DuPont spokesman, said today by phone.
Demand for TiO2, used to add opacity and whiteness to paints and plastics, won’t return to 2010 levels for a year or two, the CEO said. Pigment margins will contract in the first quarter on falling prices, he said. Prices and sales volumes should improve starting in the second quarter, he said.
“The second quarter will certainly be stronger than first quarter, and subsequently the third and fourth quarters stronger yet,” Huntsman said in the interview.
Pigment unit earnings before interest, taxes, depreciation and amortization may fall to about $200 million in 2013, from $362 million last year, Huntsman said on a call with analysts today. That may wipe out what should be a “record year” in the other businesses and cause Ebitda to drop from $1.4 billion in 2012, the CEO said.
The average estimate of 10 analysts surveyed by Bloomberg was for 2013 Ebitda of $1.31 billion.
Profit in the advanced materials unit will rise in 2013 and the textiles effect unit will turn profitable, Huntsman said. Profit from polyurethanes will be unchanged as improved demand for insulation helps makes up for $90 million in lower profit from fuel additives, he said.
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