Published: March 10, 2010
Fitch: Global Acetate Tow Producers Will Remain Resilient in Challenging Economy
NEW YORK - (BUSINESS WIRE) - Global acetate tow market dynamics should continue to stabilize the
credit profiles of existing players as acetate tow has remained
decoupled from the broader challenging economic cycle, offering
relatively robust margins and volumes, according to a new special report
issued by Fitch Ratings. Growth for the acetate tow market is expected
to remain mature as it continues to be highly correlated to the growth
of cigarette consumption. Fitch estimates that the global market will
grow at an annual rate of 1%-2% to reach approximately 840,000 to
850,000 metric tons by 2015 from the current size of 760,000 metric tons.
"Credit implications for Fitch-rated chemical manufacturing acetate tow
producers are favorable," said Thomas Dohrmann, Director at Fitch.
"Emerging markets should perform well with population increases and
rising wealth, however, growth will be limited in North America and
Western Europe as the trend of shrinking tobacco consumption will
continue."
According to the report, growth of the acetate tow market will be driven
primarily by population increases and rising wealth in emerging markets,
thus making tobacco products more affordable for a broader share of the
population. Additional support may come from substitution of unfiltered
cigarettes and of polypropylene-based filters from acetate tow, as well
as replacement of shorter filters with longer ones. These factors
combined could drive growth in emerging markets at a rate of up to two
times faster than growth of cigarette consumption.
At the same time, the acetate tow market is expected to remain highly
concentrated with three top producers (Celanese, Eastman Chemicals and
Rhodia) currently having a share of more than 80% including their joint
ventures. The long operating history coupled with mature growth and
required substantial investments represent substantial barriers and
discourage new players from entering the market.
The full report, 'Acetate Tow: Market Outlook and Credit Implications'
is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING
THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS.
IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE
AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'.
PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS
SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS
OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES
AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF
THIS SITE.
Fitch Ratings
Thomas Dohrmann, +1-212-908-0637 (New York)
Oliver
Kroemker, +49-69-768-076-253 (Frankfurt am Main)
Media Relations
Cindy
Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com
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