Rohm and Haas Loses Taste for Salt

Rohm and Haas (R&H) says it is considering “strategic options” for its salt business, which could include a divestment or spin-off. The company says it expects to make a decision by year-end. R&H’s salt business posted sales of $505 million in first-half 2007, an increase of 19% from the prior-year period. Earnings for the six-month period were $37 million, an increase of 85%, in line with improved sales performance, and offsetting higher operating costs, R&H says. Revenue increased on stronger pricing in the industrial and consumer markets, as well as increased demand for ice-control salt and other bulk products, R&H says. R&H’s salt business accounts for roughly 10% of its revenues and includes the Morton Salt name and trademark, including the image of the Morton Salt umbrella girl, a well-recognized consumer product symbol in North America. Also, R&H will no longer seek to maintain credit ratios consistent with an “A” rating, according to quarterly regulatory filings made late last month. “Rather, we intend to manage our debt levels in a manner consistent with maintaining investment-grade quality ratios,” R&H says in the filings. The company expects to maintain a debt ratio of 50% over the next several years, up from 35% at the end of the second quarter. R&H says it will use cash to: reinvest in core businesses; build new platforms to address growing needs in health, water, energy, and other areas; make selective acquisitions that add new technology or broaden geographic presence; continue to increase dividends; and to repurchase shares. R&H announced plans last month to repurchase up to $2 billion of its common stock, including $1 billion in shares through an accelerated buyback program this quarter that will be funded by the issuance of new debt.