Clariant swings towards China with new 2025 goals

Clariant swings towards China with new 2025 goals
Clariant swings towards China with new 2025 goals Copyright Thomson Reuters 2021
Copyright Thomson Reuters 2021
By Reuters
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By John Revill

ZURICH - Swiss speciality chemicals maker Clariant expects the rising raw material costs which have hit the sector to ease next year, it said on Tuesday, as it announced new 2025 goals which include a greater emphasis on China.

It raised its profitability target for 2022-2025, and is now aiming for an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of 19% to 21%, versus the 16% to 17% it said last month it was targeting for 2021.

Supply shortages, along with higher energy prices, will likely increase the company's raw material bill by 15% this year, Chief Executive Conrad Keijzer said ahead of the company's investor day.

"Next year we should see some level of easing," Keijzer told reporters, adding that in 2022 he did not "see further sequential inflation", citing an improvement in the supply-demand imbalances which caused the price rises during 2021.

The company, whose products range from catalysts for chemical production and fuel processing to chemicals for personal care products, is targeting annual sales growth of 4% to 6% - above the forecast for the market of 3.5% per year.

Clariant will have a bigger focus on China in the future as it strives to grow faster than the overall specialty chemicals sector, Keijzer said.

It will direct more than a third of its growth in capital expenditure towards China, with investment in new plants for the production of catalysts and halogen-free flame retardants, and an innovation hub in Shanghai.

By 2025 Clariant wants to boost its share of sales in the world's second-biggest economy to 14% from 10% at present

"In the next five years, half of all the growth in specialty chemicals will come from China alone," CEO Keijzer said. "It is a very important market, it is the biggest market for speciality chemicals."

Shares were down 0.8% in early trading.

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