Date: Thu, 20 Nov 1997 20:39:28 GMT Server: Apache/1.2.4 Last-Modified: Fri, 30 May 1997 18:34:10 GMT ETag: "15e09a-c93-338f1da2" Content-Length: 3219 Accept-Ranges: bytes Connection: close Content-Type: text/html Millennium Specialty Chemicals

Millennium Specialty Chemicals

Through a combination of an enriched product mix, higher selling prices, and slightly higher volumes, Millennium Specialty Chemicals, formerly known as Glidco, posted its seventh consecutive year of record profit. This performance was achieved in spite of a 49% increase in the cost of the key raw material for this business, crude sulfate turpentine (CST). The business was helped by improved manufacturing performance, in part due to increased internal production of key intermediate materials.

This was achieved by an expansion program launched in 1995 that increased capacities in high-margin aroma chemicals, like geraniol and linalool, as well as a significant increase in dihydromyrcenol capacity.

The overall success of the specialty chemicals business was achieved in the face of a worldwide softness in the aroma chemicals industry. Millennium estimates that industry demand was flat in 1996 as compared to 1995. This weakness was caused by a combination of modest demand and inventory reductions by several major consumers of aroma chemicals. Competitive activity heightened in 1996 as several direct competitors brought new capacity on stream and, in some cases, introduced new products in competition to ours.

Despite the heightened competitive activity and global market weakness, Millennium achieved double-digit growth in its aroma chemicalsí market segments. Pine oil volumes declined again in 1996 as the Company shifted the raw material to higher value-added products.

CST receipts increased, in part, due to a strategy of offering technical service resources at existing and new suppliers. Millennium has added further investment to programs designed to assist its key suppliers in improving CST quality and recovery rates.

Our new dihydromyrcenol plant is a world-class facility. It represents a four-fold capacity increase, and we believe this new unit is the largest and most competitive in the world. Dihydromyrcenol has been one of the fastest growing fragrance materials for the past five years.


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