Albemarle Corp. Q2 2008 Earnings Call Transcript

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2008-07-21 19:20:31.0

Tags: Albemarle Corp.

Question-and-Answer Session

[Operator Instructions]. And your first question comes from the line of P.J. Juvekar with Albero [ph]. Please proceed.

P. J. Juvekar - Citigroup

Yes, hi. Good morning.

Mark C. Rohr - President and Chief Executive Officer

Good morning, P.J.

Richard J Diemer, Jr. - Senior Vice President and Chief Financial Officer

Good morning, P.J.

P. J. Juvekar - Citigroup

Though,in Polymer Additives, most of your sales increase came from volumes with very little pricing. And you had announced several price increases throughout the first half. So my question is how much of this price increases that you have announced are actually sticking?

John M. Steitz - Executive Vice President and Chief Operating Officer

Yes, P.J. This is John. When you look at the numbers, it's a big impact in Polymer Additives, because with the volume decline in mineral, we have actually had a pretty solid mix effect from the brominated flame retardant business. So overall, our negotiated returns on our announced price increases have been quite successful, but there is a big mix effect in polymer additives. So with that said, most of our work now is regaining. Mineral flame retardant, margin losses and the phosphorus flame retardant margin losses because of the dramatic influence in the future on phosphorus going forward.

P. J. Juvekar - Citigroup

So John, with 16% increases in sales, how much of that was pricing versus volume? Can you just break that down for us?

John M. Steitz - Executive Vice President and Chief Operating Officer

I'd say roughly about a third of it is pure pricing. The balance would be, maybe another half of that would be mix and then you have the overall volume impact.

P. J. Juvekar - Citigroup

Okay. And what were your operating rates in your bromine production facilities?

John M. Steitz - Executive Vice President and Chief Operating Officer

Bromine was pretty high P.J. I'd say in the... our bromine, bromine wells in 85% to 90% range yielding about the same. Our specialties in brominated flame retardants have been higher. The real volume downturn is occurring in our mineral business and those rates are probably in the low 70s.

P. J. Juvekar - Citigroup

Okay and then one last question on Fine Chemicals. You talked about raw material and energy costs. Now what is the mechanism in Fine Chemicals to pass through this cost? Is it a contract based pass through or do you have great prices on ibuprofen and other products?

 

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