Speaking at the Goldman Sachs Conference in Florida, Gupta said, "We have a more profitable portfolio of products, focused on delivering customers' needs in the fastest growing markets we serve, and we're putting significant investment in areas that will improve our ability to deliver new technology to our customers."
Gupta noted that the company expects to spend approximately $250 million for Research and Development in 2002, an approximately 10% increase over the last year, with a focus on products aimed at several key markets including coatings, electronics and adhesives. The increased investment and innovation focus has resulted in an almost two-fold increase in the number of patent applications in the past several years.
The Chairman also reported that the company is remaining focused on operational efficiency, with good progress on the company's efforts to reduce the overall cost structure of the organization. Gupta noted that cost reductions made by the end of the first quarter have lowered the company's run rate by approximately $150 million, and the goal to achieve a $200 million lower run rate by October 2002 is on track.
Gupta shared with investors that, due to the portfolio changes over the past several years, the company's earnings potential is the function of multiple drivers. "We now have a robust portfolio of businesses focused on a variety of markets, which makes us less susceptible to waiting for any single market rebound for earnings recovery. We have already seen improvements in many consumer driven markets, although industrial markets remain weak," he said.
Gupta did not update the company's financial performance expectations for the quarter, but did say that demand for Rohm and Haas products in April and early May continues to reflect the beginnings of the economic recovery seen in the first quarter, especially in the Architectural Coatings, Plastics Additives and Electronic Materials markets.
Rohm and Haas will provide more specific guidance about its second quarter performance during its regular quarterly update in June.