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Albemarle to cease phosphorous flame retardant production

Albemarle will be exiting the phosphorous flame retardants business, with initial plans to cease operations at its Avonmouth, UK and Nanjing, China sites, saying the move reflects the need to address underperforming assets. "It has become clear that our current phosphorus business and product lines are not strategically aligned with Vision 2015's growth plans," Luke Kissam, Albemarle CEO, said in a release.

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Albemarle to cease phosphorous flame retardant production

Albemarle will be exiting the phosphorous flame retardants business, with initial plans to cease operations at its Avonmouth, UK and Nanjing, China sites, saying the move reflects the need to address underperforming assets. "It has become clear that our current phosphorus business and product lines are not strategically aligned with Vision 2015's growth plans," Luke Kissam, Albemarle CEO, said in a release. As the electronics industry worked to remove brominated or halogenated flame retardants from its products, some pointed to phosphorous-based flame retardants as a replacement in items like enclosures and circuit boards.header_product_polymer-1.jpg

Albemarle

Albemarle said the move will have a cash cost of $5 to $15 million, with payback expected in approximately one year. It will also incur a one-time after-tax accounting charge, ranging from $80 to $95 million in the second quarter 2012. Once these actions and a restructuring program to eliminate costs allocated to the phosphorus business are completed, Albemarle is forecasting that annual earnings per share should improve by $0.10 to $0.15 per share in 2013.

In the company's first quarter earnings statement, released on April 19, the Polymer Solutions segment, which includes its flame retardants business, saw net sales drop by 12% year over year from $258 to $228 million, while segment income fell by 23% over the same time period of $69 to $54 million. Volume was down 17%, while prices where up 5%.

At the time, the company said it saw signs of further demand recovery across most fire-safety markets, including connectors, enclosures, PCBs, auto, and construction. The company also said that it expected the first commercial campaign of products from its Earthwise portfolio to be begin in the second quarter.

The company's phosphorous flame retardants include the Antiblaze brand for rigid and flexible polyurethane foams, coatings, adhesives, sealants and elastomers; as well as NcendX for electronic enclosures.

Remaining FR products
Remaining flame retardant products include its brominated line, with Saytex for electronic enclosures, electronic/electrical components, insulation foams, and textiles; its GreenArmor, "eco-friendly fire safety solution"; and its mineral flame retardants.

These include aluminum hydroxide flame retardants (white powder) for processing temperatures up to about 210°C, used in wire and cable, electronic/electrical components based on thermoset resins, building materials, mass transportation, paints and varnishes, and paper and plaster with organic binder, as well as magnesium hydroxide flame retardants for processing temperatures up to about 310°C for wire and cable, electronic/electrical components based on polyamide resins, and building materials. 

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