Schulman rides on Asian gains and buys Prime Colorants

US-based compounder A. Schulman has plenty of reasons to pop a champagne bottle: not only is its adjusted net income from for the first quarter of fiscal 2014 up 14% to US$16.7 million but it has also purchased Prime Colorants Incorporated, a manufacturer of custom colours and additive concentrates in Franklin, Tennessee, for approximately US$15.1 million.

For the fiscal 2014 first quarter, Schulman brought in more than US$585 million in sales, representing a gain of 10%. Driving the gains was last year’s purchase of UK-based compounder/resin distributor Perrite Group, which has had a plant in Malaysia since 2003. Perrite helped drive the group’s Asia Pacific region's sales up 50%, compared with the same prior year period. Other strong segments included EMEA, which saw sales rise 11.7%. Sales volume increased, again boosted by Perrite, while profit went up largely due to operational efficiencies at the company's European plants.

Joseph M. Gingo, Chairman/President/CEO, said, "We are extremely encouraged by our strong start to fiscal 2014 and expect to continue the trend of earnings improvement. During the quarter, we successfully capitalised on operational efficiencies in Europe, benefitted from prior restructuring in Europe and Latin America, as well as gained solid contributions from our bolt-on acquisitions globally." However, Gingo cautioned that raw material costs may rise more than anticipated and that the global company has not seen a complete rebound in all its markets.

Meanwhile, he commented on the most recent acquisition, "This latest acquisition is part of our ongoing strategy to grow our custom colour capabilities in the US, as well as further transform our US operations from commodity products to a business focused on niche products and services. Colour remains an area of opportunity for us in the US, and the acquisition of Prime will enable us to serve customers better by offering colour expertise in an area of the country where we were not previously located.” In addition, Gingo said this added capacity will complement its recent acquisition of the Perrite Group as well as its other acquisition of Network Polymers, which added to its niche business in the US

For 38 years, Prime has provided pelletised colour concentrates and dry powder colour expertise to customers in the automotive and building and construction markets. Prime also provides an entry point for A. Schulman in the liquid colour market. Prime employs approximately 50 people and expects revenues in calendar 2013 to be approximately US$12 million.


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