Last Update:
Mar. 10, 2011
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Part of the audited Consolidated Financial Statements and Management´s Analysis

Asia Pacific

In 2010, our business in Asia Pacific rapidly recovered from the economic crisis, with good performance in all sectors. Thanks to strong recovery in demand, the full-year inclusion of Ciba and our strategic focus on attractive market and customer segments, sales of companies based in this region grew by 46% to €11,642 million. In local currency terms, sales rose by 35%. Sales increased in all segments, particularly in our chemicals business.

We posted record income from operations, which rose by €768 million to €1,271 million thanks mainly to higher volumes. Our cost discipline as well as progress with our Site Optimization Asia Pacific project also contributed to this growth. By 2012 we want to improve earnings by €150 million annually in the Asia Pacific region under the NEXT global excellence program. The savings potential is thus far higher than we had expected.

We also made significant progress in 2010 with the implementation of our Strategy 2020 for Asia Pacific. The main aim of this strategy is to grow on average two percentage points faster than the Asia Pacific chemical market each year while earning a premium on our cost of capital in this region as well. We also continued to develop our investments in the region in line with our 2020 strategic goal of generating 70% of sales from local production. In China, we are planning to construct a world-scale plant for the production of water treatment and paper chemicals in Nanjing as well as a plant to produce the polyurethane specialty Cellasto® in Shanghai. Furthermore, we are building polyurethane system houses in Tianjin and Chongqing. We also continued to optimize our portfolio, divesting our shares in the Wenzhou effect pigment site to our local partner.

To enhance our successful partnership approach in Asia Pacific, we signed two important memoranda of understanding with our partners PETRONAS in Malaysia and Sinopec in China to expand our specialty chemicals activities.

In Chongqing, China, we are planning a production plant for MDI, a precursor for polyurethanes, thus expanding our activities into China’s fast-growing inland provinces.

As part of our global research and development network, we broke ground on our Asia Pacific Innovation Campus at our Shanghai site, where we will provide our customers with local research and development capabilities. In addition, we launched a new technical center for dispersions in Jakarta, Indonesia, for intermediates in Shanghai as well as for environmentally friendly automotive coatings in Seoul, South Korea.

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