Businessmodel of Huntsman

Customer Segments

Huntsman provides an extensive range of chemicals products to a diverse selection of customers and end-users. The Company provides products and services to customers across the following industries:

• Aerospace and Defense, including aviation original equipment manufacturers, and aerospace repair and maintenance companies;
• Automotive and Marine, including vehicle manufacturers, automotive after-market service providers, and marine engineering companies;
• Consumer Goods, including manufacturers of detergents, personal care items, cosmetics, and food products;
• Construction, including construction companies, specialist contractors, civil engineering firms, and manufacturers of construction supplies;
• Electronics and Electrical Engineering, including manufacturers of electronics, and electrical engineering companies; and
• Chemicals and Adhesives, including producers of agrochemicals, coatings, adhesives, and lubricants. Huntsman also serves customers across the sports and leisure, energy, and paint and coatings sectors. The Company includes a number of high-profile companies among its clients across multiple sectors, including household names such as BMW, Procter and Gamble, Chevron, Unilever, Colgate, and Monsanto.

Huntsman serves an extensive customer base across the its native US, as well as a broad network of international customers. In addition to the US, the Company’s major markets include China, Mexico, and Germany, as well as other markets across Europe, Asia Pacific, and Latin America.

Value Propositions

Huntsman provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company holding a market leading position in the US and internationally, with a track record for providing high-quality products in an efficient and reliable way;
• Its broad portfolio of products and solutions, with the Company offering an extensive range of products, including acrylic, dyes, textile chemicals, and pigments that are designed for a diverse range of uses across multiple industries and end-users;
• Its international sales reach, with the Company serving an extensive customer base in its home market of the US, as well as doing significant business across Asia Pacific, Europe, and Latin America, notably in China, Germany, and Mexico;
• Its commitment to innovation, with the Company dedicating a significant portion of its funds to the development of innovative products and processes, which it goes on to utilise in its products and solutions; and
• Its industry expertise and experience, with the Company employing specialist technical personnel across its five operating segments, as well as a team of experienced industry executives. ### Channels

Huntsman operates a website at www.huntsman.com, through which it provides information on its products, solutions, and target industries. The Company does not operate an online sales channel, nor does it provide customers with an online portal through which they can manage transactions.

Huntsman principally makes sales through its in-house direct sales force, which is organised by geographic region and operating segments. These sales personnel deal directly with clients, operating out of the Company’s network of offices across the Americas, Europe, Asia Pacific, the Middle East and Africa, including in hubs such as Hong Kong, Mexico, Singapore, and the United Arab Emirates.

In addition to its focused direct sales force, Huntsman utilises the services of an extensive global network of distributors and agents that sell products on the Company’s behalf. The Company works with technically-oriented specialist distributors to support its sales efforts in niche markets and certain overseas jurisdictions, as well as mass general distribution channels where technical expertise is less important.

Huntsman additionally operates its own manufacturing and distribution infrastructure, spread across its various operating regions.

Customer Relationships

Huntsman does not provide products and services to its customers on a self-service basis. Instead, the Company makes sales through a dedicated specialist sales force, which consults directly with clients in order to provide tailored services and solutions. The Company’s facilities are strategically located close to its customers, enabling it to focus on customer support and technical service. This level of customer and technical service is intended to encourage repeat business and the establishment of longstanding customer relationships.

Huntsman additionally provides extensive post-sales technical service support to its customers, providing assistance directly to customers through its dedicated team of technical service professionals. Customers are able to contact support teams across the Company’s various operation jurisdictions, receiving personalised care over the phone or online. The Company’s technical support personnel work closely with its research and development functions to tailor the Company’s product offerings to meet the needs of its customers.

Huntsman maintains ongoing contact with its customers through its news portal, as well as through its social media accounts – including with Facebook, Twitter, LinkedIn, Google+, and YouTube – which allow the Company to interact directly with customers.

Key Activities

Huntsman operates as a manufacturer of differentiated organic chemical products and of inorganic chemical products, managing its business primarily via subsidiary company businesses Huntsman International LLC.

The Company aligns its operations into five reportable business segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. Huntsman’s Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce a range of organic chemical products, while its Pigments and Additives segment produces inorganic chemical products.

The Company’s product portfolio serves a broad range of uses across multiple industries, including the adhesives, aerospace, automotive, construction products, personal care and hygiene, electronics, medical, packaging, paints and coatings, power generation, synthetic fiber, textile chemicals, and dye industries.

Key Partners

Huntsman works closely with a broad network of companies and organisations in order to ensure the efficient and reliable operation of its business. These partners can be arranged into the following partner categories:

• Supplier and Vendor Partners, including suppliers of suppliers of raw materials, equipment and tools used in the Company’s manufacturing processes, as well as suppliers of services and technologies that are utilised across the Company’s operating segments more broadly;
• Distribution and Channel Partners, including the Company’s network of specialist and general distributors, and sales agents, that assist in extending the reach of the Company’s in-house sales force;
• Joint Venture Partners, including various manufacturing and industrial companies with which the Company jointly provides products and services through mutually owned entities; and
• Strategic and Alliance, including market leading companies across multiple industries, with which the Company collaborates on marketing, branding, development, and other projects. Huntsman has a number of partnerships in place. This includes a distribution partnership with Kohl Marketing, a research and development partnership with DuPont Industrial Biosciences, and a joint venture partnership with Chemtura Corporation.

Key Resources

Huntsman’s key resources are its intellectual properties and technologies, its raw materials and supply chain, its manufacturing and distribution facilities, its sales channels, its partnerships, and its personnel.

Huntsman owns approximately 440 unexpired US patents, approximately 135 patent applications currently pending at the US Patent and Trademark Office, and approximately 4,180 foreign issued patents and pending patent applications. Research identified numerous patent applications filed in the Company’s name with the US Patent and Trademark Office, including applications entitled ‘Crop oil concentrate adjuvants containing amine surfactants’, ‘Accelerators for polymerization of epoxy resins’ and ‘Amine suitable as PU-catalyst’.

Huntsman also owns and or leases a number of key physical properties around the world, notably its network of manufacturing and distribution facilities.

Cost Structure

Huntsman incurs costs in relation to the development of its technologies and solutions, the procurement of supplies and services, the operation of its manufacturing and distribution facilities, the operation of its sales channels, the implementation marketing and promotional campaigns, the management of its partnerships, and the retention of its personnel.

In 2015 Huntsman recorded total cost of goods sold in the amount of $8.45 billion and total operating expenses in the amount of $1.14 billion. This included research and development costs totalling $160 million for the year.

Revenue Streams

Huntsman generates revenue through the production and sale of various chemical and adhesive products. The Company’s revenue is derived primarily in the form of sales, as well as in the form of service revenue.

In 2015 Huntsman generated annual revenue in the amount of $10.30 billion, down on the 11.58 billion recorded by the Company in 2014. The Company’s largest revenue generator was its Polyurethanes segment, which alone recorded revenue for the year of $3.81 billion. This was followed by the Company’s Performance Products segment with $2.50 billion, and the Pigments and Additives segment with $2.16 billion.