Newspaper article THE JOURNAL RECORD

Flurry in Chemical Industry Confirms Suspicions

Newspaper article THE JOURNAL RECORD

Flurry in Chemical Industry Confirms Suspicions

Article excerpt

N.Y. Times News Service

NEW YORK _ The rapid-fire succession of spinoffs, acquisitions or restructurings last week in the chemical industry reinforced what many Wall Street analysts had already concluded: Chemicals are having another bad year, and will probably endure several more before the business pulls out of a prolonged slump.

Texaco Inc. kicked off the flurry by disclosing plans to sell its Texaco Chemical Co. to Jon M. Huntsman, a chemical entrepreneur from Utah, and the Australian billionaire Kerry Packer, for $1.06 billion.

Then American Cyanamid Co. and Ethyl Corp. each announced that they planned to spin off their chemical businesses to shareholders. And E.I. du Pont de Nemours Co. said it would lay off 4,500 employees in its domestic chemicals business.

The announcements barely moved the chemical stocks as a group, indicating the pessimistic attitude about the outlook for the depressed industry.

"There's disillusionment about the industry's prospects," said George J. Krug, an industry analyst at Oppenheimer Co. "It will be a number of years before we see any significant recovery, and then there will be a lot of competition from new players. It's going to be a long, hard battle."

The reshuffling of assets, which has been taking place gradually during the four- to five-year industry downturn, probably spurted last week as a result of uncanny timing, analysts said. But they said the activity also represented a trend they saw continuing during the next year to 18 months as companies shed operations in depressed industries like chemicals, focused on core businesses and tried to enhance shareholder value.

"We'll see ongoing rifle-shooting at businesses that will be divested and pruned over the next year," said Robert S. Reitzes, a chemical industry analyst with C. …

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