Australia Blazes Boost Israel Chemicals Sales

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Three weeks ago, Australian weathermen had to add two new color strips to the heat bar when a 4-month-long heat-wave afflicting the continent continuously broke records. If it was good news for anyone, it was for suppliers of flame retardant chemicals, including Israel Chemicals.

Temperatures across Australia averaged 40 degrees Celsius, reaching as high as 54 degrees in some places. Conflagrations caused by the extreme weather burned down 500 square miles of forest and scrubland in New South Wales and another 300 square miles in Tasmania.

The string of forest fires that have afflicted Australia every year in the past decade has bolstered Israel Chemical's bottom line ever since the company entered the global market for phosphate-based flame retardants in 2007. In that same year, ICL also acquired Canadian industry competitor Fire-Trol.

ICL markets several types of fire safety products, including aerially dispensed flame retardants, and foam- and gel-based fire suppressants that are mixed with water, says Eddie Goldberg, the business director of ICL's fire safety line.

The flame retardant product line is marketed under the brand name Phos-Check (previously known as Fire-Trol), and constitutes more than 80 percent of ICL fire safety product sales.

According to estimates, ICL has more than 75 percent of the global market share in flame retardants. Its largest competitor is the German company, Chemische Fabrik Budenheim.

In contrast, ICL's in the area of flame suppressant additives, which comprises the remaining 20 percent of ICL's fire safety sales, the company has more than 12 significant competitors and the company's global market share is in the single digits.

Goldberg says that ICL's exceptionally large share of the global market for flame retardants is due to the high technological barrier to entry for competitors and the expensive process for licensing such products in the United States, which takes at least two years because of environmental safety test.

Another factor constraining competition is the intense financial risks in a market dependent on the highly variable occurrence of forest fires.

However, ICL anticipates stable growth of fire safety products due to global warming and other factors, like increased urban building construction near forested areas in the U.S.

Goldberg says that there is a growth trend of between 3 percent and 5 percent for the annual sales turnover of ICL fire safety products, based on figures from the past

Fire burns in the Ku-Ring-Gai National Park, Australia, January 18.Credit: AP
The ICL phosphate works.Credit: Eyal Toueg

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