* CEO moving company into specialty chemicals
* Growth seen in automotive, solar, medical sectors
* Asia seen as growth area
* Adjusted EPS forecast for 2010 of more than $3
By Ernest Scheyder
NEW YORK, May 11 (Reuters) - Celanese Corp CE.N has traditionally been one of the more staid members of the chemicals industry, but lately Chief Executive David Weidman has been shaking things up by trying to make the company less reliant on economic cycles and more of a technology leader.
Where once the company’s signature product was acetate tow, which is used to make cigarette filters, Weidman has been slowly pushing Celanese to become, as he calls it, a “technology and specialty materials company.” Products for the automotive, medical, solar and food industries, Weidman hopes, will boost Celanese’s earnings to more than $3 per share this year, up from $1.71 per share in 2009, excluding one-time items.
By that measure, analysts expect earnings of $3.02 per share for 2010, according to Thomson Reuters I/B/E/S.
On Tuesday, Weidman said adjusted earnings should grow about 75 cents per share in 2011.
“We had been known as a company of ‘also-rans,’” Weidman told Reuters at Celanese’s annual investor day in New York. “Our brand has shifted dramatically over the last 10 years.”
Last month, the Dallas-based company posted a better-than-expected first-quarter profit due in large part to surging volumes, or the physical amount of product sold. [nN26206985]
Weidman said the economic recovery will play a part in his company’s earnings growth, but he also sees geographic diversity, research and development and cost cuts as key.
North and South America is the company’s smallest business area. Europe and Asia are the largest.
“Innovation is playing a larger part in the earnings growth,” said Weidman, 54. “Asia continues to be an important part of our future.”
After the company posted first-quarter results, BB&T Capital Markets analyst Frank Mitsch boosted his earnings forecast, predicting a strong 2010.
“It is clear the company has emerged from the last recession in a nice position to take advantage of the recovery,” Mitsch said.
For his part, Weidman expects a full recovery in 2013.
Part of the appeal of moving away from basic chemicals into specialty chemicals is the economy. Demand for basic chemicals ebbs and flows with the broader economy, whereas demand for specialty chemicals tends to be more resilient.
That keeps investors happy, and makes long-term growth planning easier, Weidman said.
Though while many of Celanese’s chemical industry peers tout innovation and research spending, Weidman says that he worries the science can often come before the sale.
“I think our industry has spent time in the lab, and not spent enough time with our customers,” he said. “Sometimes I see technology solutions in search of problems, rather than problems get solved with technology solutions.”
Weidman spends much of his time visiting customers, and said in the last four weeks he’s been to China, Japan, Canada, Holland, Germany, Italy and Switzerland.
All that travel has kept Weidman from one of his favorite pastimes: fly-fishing. Though he said he’s planning a trip to Alaska for later this year.
And while there are not too many fly-fishing venues near Celanese’s headquarters, Weidman says he nevertheless has plenty of options. “There’s a really good airport in Dallas,” he said.
(Reporting by Ernest Scheyder. Editing by Robert MacMillan)
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