Profile: Taminco Corp (TAM)

Taminco Corporation, incorporated on December 12, 2011, is a producer of alkylamines and alkylamine derivatives. The Company's products are used by its customers in the manufacturing of everyday products primarily for the agriculture, water treatment, personal and home care, animal nutrition and oil and gas end-markets. It operates in 19 countries with seven production facilities and, as of December 31, 2012, had an installed production capacity of 1,272 thousand tons. The Company has three business segments: Functional Amines, Specialty Amines, and Crop Protection.

During the year ended December 31, 2012, its products are primarily used in the agriculture, water treatment, personal and home care, animal nutrition and oil and gas end-markets, which combined accounted for approximately 79% of its volume. During the year ended December 31, 2012, through its network of production facilities, it sold 48% of its volume in North America, 36% of its volume in Europe, and 16% of its volume in the emerging markets (7% in Latin America and 9% in Asia).

Functional Amines

Functional Amines segment serves the needs of external customers , which uses alkylamines products as the integral element in their chemical processes for the production of formulated products applied in a variety of end-markets , such as agriculture, personal and home care, animal nutrition, and oil and gas. Through this segment, it also produces basic amines, which are used as building blocks to produce its downstream derivatives through its Specialty Amines and Crop Protection segments, serving a variety of attractive, non-cyclical end-markets.

The Company's functional Amines segment produces amines through the reaction of primary alcohols with ammonia. The products generated from this reaction are methylamines and higher alklylamines, the key building blocks that are used in the production of specialty chemicals and active ingredients for an array of widely applicable chemical products in diversified end-markets.

The Company produces several basic amines, including methylamines (mono-, di- and tri-methylamine) and higher alkylamines that are used as intermediates in more than 200 different downstream applications across many growing end-markets. Its amines businesses differ from region to region. In Europe, it manufacture methylamines but not higher alkylamines; in the United States, it manufactures both methylamines and higher alkylamines.

The Company's products include MMA, DMA and TMA (methylamines) and DEA, TEA, MNPA, DIPA, N-Butyls and Iso-Butyls and Amylamines (higher alkylamine). It is a global producer by volume of MMA, DMA, TMA, TEA and DEA. These products are available as gases and solutions, and are packaged in various forms including rail trucks and ISO tanks. Several of the products produced by its Functional Amines segment, including DMA, DMAc and TMA, have applications in the animal nutrition and agriculture end-markets and are sold to customers, including Dow, Nufarm, Balchem and Nutrinova. The Company's Functional Amines segment produces a number of solvents for industrial and professional uses for a diverse set of customers in the global market, with a focus on Europe, including manufacturers of textile fibers, artificial leather and electronics, which include C-base, NMP, DMF and DMAc.

The Company also supplies higher alkylamines. The agriculture end-market is the single outlet for its products as they are primarily used in the formulation of herbicide amines, including MIPA and MEA, key ingredients in glyphosate and atrazine.

Specialty Amines

Specialty Amines segment sells alkylamine derivatives for use in the water treatment, personal and home care, oil and gas and animal nutrition end-markets, and specialty additives for use in the pharmaceutical, industrial coatings and metal working fluid end-markets. This segment is downstream from the Functional Amines segment and uses that segment’s production as one of its key raw materials.

The Company's Specialty Amines segment produces amine derivatives and other chemical intermediates, the building blocks that are used in the production of specialty chemicals and active ingredients for the water treatment, personal & home care, oil & gas and animal nutrition end-markets, as well as for industrial and other applications. This segment, through its integration model, sources its raw materials from the Functional Amines segment and other chemical companies.

The Company serves the water treatment end-market primarily through specialty derivatives such as DMAE (Amietol M21), DEAE and DEHA, and other derivatives. Its products primarily include intermediates for coagulants and flocculants used to eliminate particles and impurities from liquids in industrial applications, to treat municipal wastewater and boiler water, and to prevent corrosion and scaling in closed circuits. It also supplies basic methylamines, including MMA, DMA and TMA, and higher alkylamines, including DEA, TNPA and TNBA, to customers in the water treatment end-market.

The Company serves the personal & home care end-market primarily through a type of specialty amine derivative that is used as a chemical intermediate in the production of surfactants. These chemicals are key building blocks for use in the production of fabric softeners, detergents, biocides and personal & home care products such as shampoos.Its two main derivative products are DMAPA, which is used in personal & home care products and DIMLA, which is used in the production of detergents and biocides.

The Company serves the oil & gas end-market primarily through a range of basic methylamines, such as MMA, DMA and TMA, higher alkylamines, such as DEA, TEA, MNBA, DNBA and TNBA, and specialty derivatives, such as Amietol M12, ACT M12, MDEA and choline chloride, which are used in refineries and off-shore production facilities to remove impurities from crude oil and natural gas, principally, hydrogen sulphide and carbon dioxide, and referred to as oil & gas sweeteners.

The Company serves the animal nutrition end-market primarily through choline chloride, a methylamine derivative also known as vitamin B4. Choline chloride is chiefly used in poultry feed, swine, fish and pet feed to allow better nutrient conversion and therefore reduce overall feed costs for the industry’s customers.

The Company's products for the pharmaceuticals end-market include a variety of basic methylamines, higher alkylamines and solvents, as well as specialty amine derivative products, each with their own specific properties and particular market dynamics. These products include DMA HCl and 2-Pyrrolidone.

The Company's Specialty Amines segment also supplies a number of specialty products for use in coatings and metalworking fluids, fuel additives and polymer additives to manufacturers and other industrial customers. Among these products, it chemicals developed for use in coatings, Advantex, Vantex T, Amietol M21 and Amietol M12, and metalworking fluids by a margin. Chemicals used in fuel additives include specialty additives used to enhance the properties of fuel and chemicals used in polymer additives, Terminator P and AN/FMI.

Crop Protection

Crop Protection segment sells alkylamine derivatives, active ingredients and formulated products for use in the agriculture and crop protection end-markets. The majority of the segment’s customers range from multinational crop protection and agricultural enterprises to local farms.

The Company's Crop Protection segment produces alkylamine and alkylamine derivatives that are used directly in the agriculture and crop protection end-markets.It serves the agriculture end-market by supplying several crop protection products designed to increase the yields and longevity of crops, including fungicides, soil disinfectants, plant growth regulators and formulation of third party active ingredients.

The Company produces three fungicide end-products for use as fungicides or seed treatment agents: Thiram, Ziram and Ferbam. Its soil fumigation products comprise two active ingredients, metam sodium and metam potassium, which are used prior to planting or sowing in order to clean soil of bacteria, weed seeds and nematodes, primarily in connection with growing high value fruit and vegetable crops, such as strawberries.

The Company's formulations products comprise free formulation Water Dispersible Granules (WDG), a specific technique that it uses to formulate third parties’ active ingredients. Each of the regions in which it operate is a key market for its formulations products, which are shipped globally from its production facilities in Ghent. Its plant growth regulators comprise products such as chlormequat chloride formulations, which regulate plant hormones to strengthen root systems and stems in cereals. These products include CCC, C5, Adjust, Barlequat, Stimul, Bettaquat, Tyran/Regus and Desikote. Its Crop Protection segment also produces biocides that serve a variety of industrial uses as well as rubber chemicals. These products are produced alongside its crop protection products within its Crop Protection segment because of their similar chemical properties.

The Company's biocides are used in industrial processes to protect products, such as sugar, paper and leather, from bacterial erosion. In addition, its biocides are used to treat cooling water. Its rubber chemicals are used in niche plastics or rubber markets and include, for example, vulcanization accelerators used to solidify rubber on a molecular level. The key market for its biocide and rubber chemicals products is Europe. It sells biocides primarily to a relatively concentrated customer group, consisting of companies that provide industrial water treatment services to manufacturers.