Arch Chemicals, Inc.(NYSE: ARJ) announced that the U.S. Department of
Commerce (DOC) has made its final determination for the second
administrative review period that reduces the antidumping duty rate from
76 percent to less than 1 percent, subject to a review for clerical
errors. This ruling relates to chlorinated isocyanurates (isos) that the
Company imported from its major Chinese supplier for the period from
June 1, 2006 through May 31, 2007. This final determination supersedes
the DOC’s preliminary ruling published in
April of this year, which estimated the final rate to be 23 percent for
the period under review.
Arch estimates that the impact of the duty rate being reduced from 76
percent to less than 1 percent is an $11 million pre-tax benefit.
Previously when the preliminary ruling of 23 percent was published, the
Company had estimated a benefit of $8 million. The added $3 million
benefit will offset lower volumes the HTH Water Products business
experienced in August. The Company expects to recognize the $11 million
benefit in the third quarter of 2008, compared to its previous guidance
which assumed the benefit would be recognized in the fourth quarter of
2008.
In addition, the Company will begin paying cash deposits for future
imports of isos at this reduced rate of approximately 1 percent. The
Company expects this reduced rate to mitigate the anticipated higher
costs for the purchase of isos that it will incur in the upcoming pool
season.
"We are extremely pleased with the DOC’s
ruling, which significantly reduced the antidumping duty rate on our
imported isos,” said Arch Chemicals’
Executive Vice President and COO Louis S. Massimo. "Our
HTH Water Products business remains on track to deliver improved
operating income in 2008 and is well positioned to achieve our
longer-term target of 15 to 17 percent return on sales.”
About Arch
Headquartered in Norwalk, Connecticut (USA), Arch Chemicals, Inc. is a
global Biocides company with annual sales of approximately $1.5 billion.
Arch and its subsidiaries provide innovative, chemistry-based solutions
to control the growth of harmful microbes. The Company’s
concentration is in water, hair and skin care products, treated wood,
paints and coatings, building products and health and hygiene
applications. Arch Chemicals operates in two segments: Treatment
Products and Performance Products. Together with its subsidiaries, Arch
has approximately 3,000 employees and manufacturing and customer-support
facilities in North and South America, Europe, Asia, Australia and
Africa. For more information, visit the Company’s
Web site at http://www.archchemicals.com.
Except for historical information contained herein, the information
set forth in this communication contains forward-looking statements that
are based on management's beliefs, certain assumptions made by
management and management's current expectations, outlook, estimates and
projections about the markets and economy in which the Company and its
various businesses operate. Words such as "anticipates," "believes,"
"estimates," "expects," "forecasts," "intends,”
"opines," "plans," "predicts," "projects," "should," "targets" and
variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions ("Future Factors"), which are difficult to
predict. Therefore, actual outcomes and results may differ materially
from what is expected or forecasted in such forward-looking statements.
The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise. Future Factors which could cause actual
results to differ materially from those discussed include but are not
limited to: general economic and business and market conditions; lack of
growth in U.S. and European economies; increases in interest rates;
economic conditions in Asia; changes in foreign currencies against the
U.S. dollar; customer acceptance of new products; efficacy of new
technology; changes in U.S. or foreign laws and regulations; increased
competitive and/or customer pressure; the Company's ability to maintain
chemical price increases; higher-than-expected raw material and energy
costs and availability for certain chemical product lines; a change in
the antidumping duties on certain products; price increases due to
changes in Chinese taxes related to exports from China; increased
foreign competition in the calcium hypochlorite markets; inability to
obtain transportation for our chemicals; unfavorable court decisions,
including unfavorable decisions in appeals of antidumping rulings,
arbitration or jury decisions or tax matters; the supply/demand balance
for the Company's products, including the impact of excess industry
capacity; failure to achieve targeted cost-reduction programs; capital
expenditures in excess of those scheduled, such as the China plant;
environmental costs in excess of those projected; the occurrence of
unexpected manufacturing interruptions/outages at customer or Company
plants; a decision by the Company not to start up the hydrates
manufacturing facility; unfavorable weather conditions for swimming pool
use; inability to expand sales in the professional pool dealer market;
the impact of global weather changes; changes in the Company’s
stock price; and gains or losses on derivative instruments.
