Cytec Mulls Fate Of Resins

Cytec Industries is considering a sale of its coatings resins business. During the company’s quarterly conference call with analysts on Oct. 21, CEO Shane D. Fleming said the company is “currently reviewing all options for this business.” The business makes resins for powder, radiation-curable, and liquid coatings; it generated operating earnings of $68.2 million on $1.4 billion in sales last year. It is Cytec’s largest segment, representing 52% of the firm’s 2010 revenues. But its profit margins, at just below 5%, are the company’s thinnest. Fleming did keep the door open to making the business work within Cytec, primarily by favoring specialty resins over more commoditized products. In the conference call, Cytec also disclosed it is closing a powder coatings resins plant in Suzano, Brazil. Cytec’s coatings resins business originated with Hoechst under the name Vianova Resins. Since 1998, it has been owned by Morgan Grenfell, Solutia, and UCB, which sold the business to Cytec for $1.8 billion in 2005. Cytec puts its book value today at about $1.4 billion.