Headquartered in Houston, Texas, KMG Chemicals(NASDAQ: KMGB) produces and distributes established specialty chemicals in niche markets in North America and globally. The company is growing primarily by acquiring and optimizing stable checmical product lines and businesses with established production processes. KMG improves operating efficiencies, product quality, distribution and responsiveness to customers, thereby expanding profitability and extending the economic life of mature chemicals. Current operations are focused primarily on wood treatment (79% of last twelve months sales), animal health products (17% of last twelve months sales) and agricultural chemicals (4% of last twelve months sales).
These products protect and prolong the useful life of wood, thus controlling operating costs invarious industries while also conserving forest resources. KMG sells these products to wood treaters who supply the railroad, utility and construction industries with treated lumber.
The animal health sector of the agricultural chemicals market holds significant opportunity for KMGB. It is a sector of the market that is largely ignored by the large chemical companies, yet offers attractive margins and growth potential.
According to the company, the consolidation in the agricultural chemicals space is driven considerably by research and advances in biotechnology. Additionally, the need to fund large research and development budgets compels companies to merge and become more efficient. Maturing chemicals consequently become available for divestiture as the larger companies focus on newer products.
1. KMG Chemicals' Company Fact Sheet
2. Company Fact Sheet
3. Company Fact Sheet