PGI’s Hagen says it could be 2016 before world spunmelt markets start to feel tight once again
HOUSTON, TEXAS, November 21, 2012-
Polymer Group. Inc. had a combination of good news and bad news to report in its latest quarterly results, with company performance mostly falling into the "good news" category. But there was one nugget offered up by CEO Ronee Hagen that may make unpleasant reading for those in the spunmelt industry: she believes it could take until 2016 before demand in major world markets has risen by enough to absorb new capacity being added in the 2011-2013 time period.
PGI's own results showed the company reaching a low point for operating profits in the second quarter and then bouncing back in the third period due to a combination of "lower raw materials costs and solid spread management", according to the company's analyst presentation. Company executives told their quarterly conference call that recent polypropylene cost trends point to possible "headwinds to profitability" in the fourth quarter; although they still expected PGI to remain above recent trough earnings levels. They went on to emphasize that they see profits in the second half of the year averaging better than the first half performance.
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