Imerys results underline commitment to ceramic proppants

By Siobhan Lismore-Scott
Published: Thursday, 27 November 2014

As a leading producer in many mineral industries, Imerys results are a good indication of the state of the market. These are strong results —with the exception of fused minerals — showing that new areas of growth, such as talc in polymers in automobiles and Li-ion batteries, are starting to affect even traditional producers.

Imerys posted revenue across its group of €943.8m ($1.18bn*), and operating income of €127m in Q3 2014,  2.4% and 2.8% year-on-year (y-o-y) increases, respectively.

"On the basis of solid progress since the beginning of the year we can maintain our objective for income for 2014 and therefore say that in 2014 we shall deliver as we have always done," Michel, CEO, said, adding that Imerys retains its outlook for FY 2104.

In a cautionary note, he said that the group would "remain quite watchful in the context of demand development," as Brazil and other emerging countries continue to struggle.

Proppants

The non-conventional oilfield sector continued to expand in the US, a positive trend for the company, as its US, Wrens, proppants plants came online in Q3 2014.

During a conference call to discuss the results, Michel answered questions on whether a trend had been seen by Imerys of producers switching from ceramic proppants to sand, as outlined by CARBO Ceramics.

"The proppant market and exploration on the non-conventional oil market is a market in line with the oil market with the changes in atmosphere, which are quite abrupt," he said.

"The oil price declined and there has been some restlessness in the market. One major producer said he had seen some switch to sand. Is this a structural change? I don’t believe so and we don’t believe so," he added.

"In our case we are in a period of ramp up of our customers’ portfolio and we are acquiring customers that are switching to ceramics (...) I don’t see a structural change but I do see volatility," he said.

Michel explained that he believed Imerys had a competitive advantage over the many Chinese proppant producers because of the quality of its products and its foothold in the North American market.

"There is a degree of uncertainty that we have seen over the last few months -will this challenge our position of ramping up? No, not at all," he added.

Plants coming online

As well as the proppants plant, Imerys reported that its carbon black plant in Belgium and lime plant in Brazil also came online during the quarter, while the company’s fused alumina plant in Bahrain started up in July. Together, these contributed €55m to Imerys’ revenue stream.

All in all, the acquisitions made in this business group contributed to increased revenue. In monolithic refractories this was to the tune of €22.8m from the Indoporlen plant Imerys bought in June 2013, the Tokai plant it acquired in July 2013 and Termorak in February 2014.

Termorak, a Finnish company specialising in the design, trading and installation of refractory materials, last year had an annual revenue of €17m.

In carbonates, the acquisition of Kinta Powdertec Sdn Bhd, a Malaysian producer of ground calcium carbonate for the plastic, polymer and coating industries, is expected to contribute €5m to annual revenue.

*Conversions made November 2014