QUOTE AND NEWS
SeekingAlpha  Apr 5  Comment 
By Stephen Simpson, CFA: There are a lot of really good things about FMC Corporation (FMC). The company's unusual model in agricultural chemicals allows for exceptional margins, and the company's food/nutrition business is a leader in close to...
StreetInsider.com  Mar 18  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Guidance/FMC+Corp.+%28FMC%29+Sees+Lower+Q1+Agricultural+Solutions+Profit/9291949.html for the full story.
Benzinga  Mar 13  Comment 
In a report published Thursday, Bank of America analyst Kevin W. McCarthy reiterated a Neutral rating on FMC (NYSE: FMC), and raised the price target from $77.00 to $86.00. In the report, Bank of America noted, “We favor FMC's plan to...
TheStreet.com  Mar 11  Comment 
NEW YORK (TheStreet) -- FMC Corp  was downgraded to" market perform" from "outperform," said Wells Fargo on Tuesday. The firm said the business split is already priced into the stock.  Must Read: Warren Buffett's 10 Favorite Stocks STOCKS TO...
Reuters  Mar 10  Comment 
Chemical manufacturer FMC Corp said it would split into two companies, one comprising its minerals business and the other its agricultural solutions, health and nutrition...
StreetInsider.com  Feb 18  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/FMC+Corp.+%28FMC%29+Declares+%240.15+Quarterly+Dividend%3B+0.8%25+Yield/9186005.html for the full story.
StreetInsider.com  Feb 5  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/FMC+Corp.+%28FMC%29+Tops+Q4+EPS+by+11c/9130233.html for the full story.
StreetInsider.com  Jan 15  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Upgrades/Longbow+Research+Upgrades+FMC+Corp.+%28FMC%29+to+Buy/9056686.html for the full story.
Market Intelligence Center  Jan 7  Comment 
A covered call identified by MarketIntelligececenter.com's patented algorithm on FMC Corp. (FMC) could yield about 4.62% (16.52% annualized, for comparison purposes only) in 102 days. Pair a long position in the stock with the Apr. '14 $75.00 call...
Market Intelligence Center  Dec 16  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with FMC Corp. (FMC) that should provide a 5.54% return in just 124 days. Sell one Apr. '14 call at the $75.00 level for each 100 shares of FMC...




 

FMC Corporation (NYSE:FMC) is a chemical conglomerate that specializes in herbicides, insecticides and lithium products. Insecticides are used in agriculture to enhance crop yield and quality by eliminating pests and herbicides are used to reduce the need for manual or mechanical weeding by inhibiting weed growth. The purpose of both is to increase crop yield for farmers. Their products are used in various regions including North America, Asia-Pacific, Europe-Middle East-Africa, Latin America South and Latin America. FMC benefits when countries devote more land to agriculture or have a particularly good growing season.

FMC's Lithium Division is the world's largest developer and supplier of Lithium based materials for primary and rechargeable batteries used in cell phones, laptops, and hybrid, energy efficient automobiles known as ZEVs and PZEVs.[1] The markets for lithium chemicals are global with demand growth occurring in developing markets of China and India. The products derived from lithium chemicals are used in many markets including construction to (prolong the life of concrete), energy (specifically, rechargeable batteries), and other chemical markets (polymers). Toyota announced that it would accelerate development of lithium batteries for use in their hybrids, reflecting a general trend that lithium batteries are becoming more prevalent in the automotive industry.[2]

Company Overview

Business Financials

FMC products are divided into three segments. Agricultural Products primarily focuses on insecticides and herbicides. The Specialty Chemicals consists of BioPolymer and lithium businesses. The BioPolymer business focuses on food ingredients that are used to enhance texture, structure and physical stability. Finally, the Industrial Chemicals segment manufactures a wide range of inorganic materials, including soda ash, hydrogen peroxide, specialty peroxygens and phosphorus chemicals. Such chemicals have a wide range of applications, including animal nutrition, cleaning products, and personal care cosmetics.

In 2009, FMC had total revenues of $2.8 billion, a significant decline from its 2008 total revenues of $3.1 billion. This decline in revenues led to a negative impact on FMC's net income. Between 2008 and 2009, FMC's net income declined from $305 million in 2008 to $239 million in 2009.

Business Segments

Agricultural Products (37.2% of 2009 revenue)[3]

The Agricultural Products segment, which represents approximately 37.2 percent of FMC’s 2009 revenue, markets products for crop protection, with a strong R&D focus on environmentally compatible solutions that can effectively increase farmers’ yields and provide more cost-effective alternatives to older chemicals to which insects or weeds may have developed resistance. The majority of sales in Agricultural Products are insecticides, particularly pyrethroid and carbamate chemistries, in which they maintain leading market positions based on revenues. Pyrethroids are a major class of insecticides most effective against worm pests. Carbamates are broad spectrum insecticides used to control a wide variety of pests in both soil and foliar applications. There is a seasonal tendency for the agricultural segment, as it depends on growing seasons of various countries.

Specialty Chemicals (26.6% of 2009 revenue)[3]

The Specialty Chemicals segment, which represented 25 percent of FMC's 2009 consolidated revenues, is focused on food ingredients, pharmaceutical products, biomedical technologies and lithium specialty products. Important to the specialty chemicals segment is FMC's BioPolymer business, which is organized around the food, pharmaceutical and medical device markets. Trends driving market growth include increasing consumer interest in healthier foods, greater convenience and growth in per capita consumption of processed foods in emerging markets. The trend toward health and convenience drives the need for more functional ingredients to impart desired food tastes and textures. In 2009, this segment earned $753 million in total revenues.[3]

Industrial Chemicals (36.2% of 2009 revenue)[3]

The Industrial Chemicals segment, which represents 41 percent of FMC’s 2009 revenues processes and sells refined inorganic products that are sought by customers for their critical reactivity or specific functionality in markets such as glass, detergents, animal nutrition and pulp and paper. In 2009, this segment had total revenues of $1.03 billion.[3]

Key Trends and Forces

Increased Investor Interest in Corporate Responsibility for Environmental Impact

On March 29, 2009 the CBS News program "60 Minutes" aired a segment exploring the issue of the use of the chemical pesicide "Furadan" manufactured by FMC Corporation in the intentional poisoning of lions in Kenya. FMC explained that Furadan had been restricted for sale in Kenya but 60 Minutes reported that Furadan was still found to be freely available for sale in Kenya, possibly due to continued sales by FMC to neighboring countries which are also reported by 60 Minutes to have incidents of lion poisonings[4]. Investors in general are becoming more concerned with the responsibility for corporations for the environmental effects of corporate policies.

Rise of Lithium based products and Renewable Energy

Lithium Ion batteries, known for their compactness, duration as measured by capacity, power and lightweightness, make them the battery of choice for battery electric vehicles [BEV], fuel-cell vehicles [FCV], and plug-in hybrid electric vehicles [PHEV]. Over 60% of the worldwide cell phones and 90% of the laptops are powered by lithium batteries.[5]The growth of Zero Emissions Vehicles [ZEV] and Partial Zero Emissions Vehicles [PZEV] is bolstered by government mandates to fight urban pollution, the harmful effects of greenhouse gas emissions, and rising consumer sentiment to drive less polluting and better fuel economy vehicles. [6]Further bolstering this growth is national sentiment to reduce dependence on foreign oil and the distribution of rebates for the purchase of these energy efficient vehicles by local governments.[7]As the world's largest developer and supplier of Lithium based materials for primary and rechargeable batteries used in cell phones, laptops, and ZEVs and PZEVs, FMC benefits from increased interest in renewable energy.

Declining demand for biofuels in Europe

Rising food prices, trade tensions and social unrest, all highlighted in a Times article from March, 2008 are reasons that the European Union is rethinking its hopes for running its cars and trucks on biofuel.[8] s a result of such protests and other arguments that biofuels investment is causing a rise in food prices, The European Environment Agency, which advises the European Commission, has recommended that the E.U. suspend its 10% biofuels target.[9] Leading the charge is economist Jeffrey Sachs, special adviser to U.N. Secretary General Ban Ki-moon, who in May, 2008 advocated against the European Parliament's goal of increasing biofuel's share in Europe's diesel and gasoline consumption to 10% by 2020.[10] Last year, E.U. governments spent an estimated € 3.7 billion ($5.2 billion) on subsidising biofuel production.[11] As a result of such protests and other arguments that biofuels investment is causing a rise in food prices, The European Environment Agency, which advises the European Commission, has recommended that the E.U. suspend its 10% biofuels target.[12]

Competition

The three segments that make up FMC include very different markets and FMC must compete with different companies in each of them both the United States and markets outside of the United States. FMC has a number one or number two market position in many of their product lines, based on revenue, either globally or in North America. The following product lines accounted for the majority of our 2007 consolidated revenue.

The Agricultural Products segment competes in the global chemical crop protection market for insecticides, herbicides and fungicides, an industry which has a relatively small number of large competitors and a large number of smaller, often regional competitors. Some main competitors in this area are:

Specialty Chemicals competes in the biopolymer and lithium-based products businesses. Two domestic producers of lithium are FMC Corporation (FMC), and Chemetall GmbH, a German company that was acquired by US based Rockwood Holdings (ROC) in 2004.[13]

Industrial Chemicals serves the soda ash markets worldwide, the peroxygens markets predominantly in North America and Europe and the phosphorus markets in Europe, the Middle East and Latin America. In North America, the soda ash business competes with four domestic producers of natural soda ash, three of which operate in the vicinity of their mine and processing facilities in Green River, Wyoming. They are listed below:

  • General Chemical (Soda Ash) Partners3
  • OCI Chemical Corp
  • Searles Valley Minerals, Inc
  • Solvay Chemicals

References

  1. seekingalpha.com
  2. http://www.hybridcars.com/technology-stories/lithium-ion-batteries.html
  3. 3.0 3.1 3.2 3.3 3.4 FMC 10-K 2009 Item 7 Pg. 29
  4. CBS News- "60 Minutes" episode aired 2009-29-09; retrieved 2009-29-09
  5. seekingalpha.com
  6. seekingalpha.com
  7. seekingalpha.com
  8. The Clean Energy Scam
  9. Europe Grapples Over Biofuels
  10. Europe Grapples Over Biofuels
  11. Europe Grapples Over Biofuels
  12. Europe Grapples Over Biofuels
  13. strong growth in lithium demand
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