Element Solutions Inc's ( ESI Quick Quote ESI - Free Report) business unit MacDermid Enthone Industrial Solutions, a leading manufacturer of chemical compounds used in surface coating applications, has announced its plans to establish a second facility in Japan to serve the local automotive industry better. This state-of-the-art laboratory will be situated in Nagoya and will cater to the technical needs of the region's Tier 1 and Tier 2 suppliers, as well as other essential companies within the automotive ecosystem.
Operating in Japan under the legal entity MacDermid Performance Solutions Japan K.K., the company currently provides technical services to customers in Nagoya from its Hiratsuka location in Kanagawa Prefecture. The new laboratory in Nagoya will significantly reduce response times for existing customers when making crucial decisions regarding their plating bath parameters. This is especially important for many customers who operate around the clock. Furthermore, this expansion into Nagoya aligns with all major automotive OEMs' business continuity planning requirements.
After a preliminary soft launch on October 1, the company is set to achieve full operational capability by April 2024. The remarkable growth experienced in its automotive sector has acted as a catalyst for this expansion into Japan. Given Japan's unwavering commitment to sustainability, the company eagerly anticipates broadening its product portfolio within the electric vehicle segment. This strategic investment in Aichi Prefecture allows the company to deepen its market presence among Japan-based manufacturers specializing in brake calipers, door handles, emblems, fasteners and other pivotal components.
The company is thrilled to establish a footprint in Nagoya, where it has been providing customers with specialized chemicals for over four decades. This strategic investment reaffirms its enduring dedication to Japan, a nation that deeply appreciates the worth of its eco-friendly products. Moreover, they anticipate this established trust will pave the way for new business prospects.
Shares of Element Solutions have gained 4.4% in a year compared with an 11.9% rise of the
industry. Image Source: Zacks Investment Research
In the second quarter, Element Solutions achieved adjusted earnings per share of 31 cents, meeting the Zacks Consensus Estimate, while experiencing a 13% decline in net sales at $586.1 million, falling short of the Zacks Consensus Estimate of $626.9 million due to challenges in the electronics market. The company expects adjusted EBITDA of approximately $125 million for the third quarter of 2023. It has revised its full-year 2023 adjusted EBITDA guidance to a range of $490-$500 million. They also estimate full-year 2023 adjusted earnings per share to be around $1.30 and anticipate generating approximately $265 million in free cash flow for 2023.
Zacks Rank & Key Picks
Element Solutions currently carries a Zacks Rank #3 (Hold).
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