Elementis may sell Linatex rubber business

By Liz White, ERJ staff

London--Linatex, the speciality rubber unit of UK chemicals group Elementis plc, may be sold, now that it is back in profit, chief executive Geoff Gaywood revealed during the group's 2004 results briefing.

“Now we've been able to demonstrate, two years in a row, more than 20 per cent per year sales growth,” for Linatex, a supplier of proprietary abrasion- resistant rubber, said Gaywood. "The question is: 'Is Elementis the right owner for that business going forward or are there other potential owners who might gain even more value out of it?' " the Elementis boss asked.

Elementis reported 2004 sales of £389.2 million (2003: £368.2 million) with before-tax profits of £11.8 million (2003: £24.5 million). As well as its speciality rubber unit, with sales in 2004 of £45.0 million, Elementis' main divisions are chromium (sales £238.2 million) and specialities & pigments (sales £110.5 million).

Gaywood described the Linatex business--with “a strong, highly efficient manufacturing base in Malaysia,” as having “unique product differentiation, performance differentiation, …strong brand recognition, … great global positioning for the mining industry.”

Greg McClatchy, who has been running the rubber unit, and has been credited with turning the Linatex business around, is now moving on to head the Elementis chromium business. During 2004, Linatex saw high sales growth and showed improved margins,although it still made an operating loss, of £0.2 million, before excpetional items.