The Huntsman activist defense presentation highlighted below does a very good job of explaining why Starboard is focused on a set of concerns that the company has already addressed and while we would generally not comment on something like this, we agree with Huntsman’s assessment that the proposed Board changes bring nothing to the table. Where the Starboard activity may help is improving Huntsman’s communications, as while the company has done a good job, in our view, of repositioning, it has done a less good job, until now, of communicating what the changes mean. The presentation linked below does a much better job than anything we have seen from the company in the past. To be fairer to Huntsman, the chemical industry has always had trouble communicating strategy shifts and portfolio transformations to stakeholders and there have been several instances of good stories not turning into good businesses – Eastman had some false starts in the past but has not been alone with these problems. It often takes some time for investors to believe in a new business model and this is where good corporate communications strategies can help. This presentation is a good start for Huntsman.
Source: Huntsman – Annual Meeting of Stockholders Presentation, March 2022
We talk about supply chain issues in other parts of today's daily report and we will be more focused on some of the transactional moves we are seeing to combat supply chain challenges in our Sunday piece this week. The risk for Huntsman and others moving more downstream is that we run out of raw materials that are critical to the Huntsman’s operations. The company has already battled (successfully) higher raw material costs in 2021, but it has been decades since large sectors of the chemical industry have faced real shortages – causing companies to choose between what they make and what they do not make.
