Fine chemicals were one of few positives for Albemarle in the second quarter according to the US chemicals firm’s latest results.
The fine chemicals unit – which combines Albemarle’s generic active pharmaceutical ingredients (API) business, its chemistry services division and its agri chemicals group– saw net sales increase 13 per cent in the three months to June 30 to $208.7m (€170.4m) and income grow 17 per cent.
This contrasts with Albermarle’s catalysts and polymer solutions divisions which saw net sales decline 14 and 15 per cent respectively with income falling 2 per cent and 17 per cent.
Albemarle is due to hold its earnings conference call later today and has not yet said what drove the fine chemicals growth, other than to attribute it “to favourable volumes and pricing.”
The result continues the trend seen in the first quarter when Albemarle COO John Steitz said that ‘positive trends within its pharmaceutical portfolio’ had played a part in increasing fine chemicals profitability and improving margins.
At the time he told investors that: “The impact of evolving our portfolio towards complex, higher margin, longer duration opportunities was evident during the [first] quarter as operating margins rose impressively.”
The story was the same in the final quarter of 2011 - which saw fine chemicals revenue grow 36 per cent with Steitz describing the firm's specialty pharmaceutical chemicals activities as important .
Whether sales to the drug industry have had as big a positive impact in Q2 2012 remains to be seen, but Albemarle’s recent activities certainly suggest that it views the sector as an increasingly important part of its business.
In May Albemarle increase its prices for ibuprofen – one of its top selling generic APIs – and more recently the firm increase production capacity at its actives plant in South Haven, Michigan citing growing drug industry demand and a desire to further advance its pharma portfolio.