Last Update: 03/11/2010
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Dispersions & Pigments

  • Higher sales due to integration of Ciba businesses
  • Sharp decline in demand impacted all business areas and led to capacity adjustments
  • Earnings negative due to low capacity utilization and high special items
  • Outlook 2010: sales growth and significantly positive earnings thanks to stable margins and continued cost discipline

Dispersions & Pigments – Sales by region
(location of customer)

Performance Products – Dispersions & Pigments – Sales by region (pie chart)

In 2009, sales to third parties were €2,445 million, an increase of €206 million compared with the previous year (volumes –11%, prices –4%, portfolio 22%, currencies 2%). Sales grew thanks to the inclusion of the Ciba businesses.

Demand dropped as a result of the global economic crisis. The decline affected all business areas, but to varying degrees. Sales volumes for pigments were significantly lower as a result of the slump in automotive production. For the dispersions unit, the construction sector downturn resulted in a decline in sales volumes, in particular in Europe, as well as in North and South America. However, over the course of the year volumes steadily recovered toward the level of the previous year. Sales of resins were only slightly below the previous year’s level, supported by demand from the printing and packaging industry. The business with coatings additives was also negatively affected by the economic crisis. Margins in all business sectors could generally be maintained and even slightly improved in some cases. However, weak demand and volatile raw materials prices led to increasing pressure on margins in the second half of the year.

In 2009, we adjusted global production to meet declining demand and reduced our inventories. Lower capacity utilization rates at our plants adversely affected income from operations. We minimized the negative impact of higher fixed costs with rigorous management. Significant special items resulting from the Ciba acquisition led to negative earnings.

In the fourth quarter of 2009, we started up a new resins plant in Wyandotte, Michigan.

We expect the economic environment in 2010 to remain challenging. Our key customer industries – automotive, construction and packaging – are only slowly recovering from the global recession. Overall, we expect to grow somewhat faster than the market and to increase sales. Due to stable margins and continued cost discipline, we expect clearly positive earnings. The rapid implementation of integration and restructuring measures associated with the Ciba acquisition will also contribute to a significant improvement in earnings.

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