Speaking at a conference in New York City, Fitzpatrick characterized 2001 as a transition year, one in which Rohm and Haas instituted stringent cost reduction programs aimed at improving the company's operating run rate by $200 million upon completion in October 2002.He noted that the company strengthened its business portfolio through the divestiture of its agricultural chemicals business and the decision to exit some smaller, lower-performing businesses. Also, small, bolt-on acquisitions were made to support some of the stronger segments of the portfolio. He noted that the company used the net proceeds from these activities to strengthen the company's balance sheet. The debt-to-capital ratio was reduced from 49 percent at the beginning of 2001, to 42 percent as of December 31st.
Fitzpatrick characterized 2002 as a momentum year for Rohm and Haas. He said that the key markets into which the company sells are showing overall signs of stability, but expects to see overall demand in the first half of 2002 similar to that of the last six months of 2001. Nevertheless, the company continues to report growth for new technologies recently introduced, especially those targeted at the high end of the markets in which they compete. He pointed to next-generation versions of opaque polymers, road-marking paints and new water-based emulsions for more environmentally-friendly paints as examples of success in the global coatings market, and noted growth for adhesive technology aimed at the flexible packaging market, as well as new preservative technology for the personal care market. Newer electronic materials technologies, especially those used for making high-performance semiconductors, also are doing well, relative to the depressed electronics market overall.
He concluded by observing that cost reductions and greater operating efficiencies should allow the company to report improved earnings in 2002, even without a significant increase in external economic demand. Said Fitzpatrick, "Rohm and Haas continues to demonstrate that it is actively managing its way through this part of the economic cycle and bringing innovative technology to market to ensure a good return to its shareholders."