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

Dispersions & Pigments

  • Sharp sales increase due mainly to economic upturn and inventory restocking
  • Margins for dispersions, pigments and resins maintained, and even improved in some cases, despite increasing raw materials costs
  • Earnings far above previous year’s level
  • Outlook 2011: slight sales growth; substantial earnings increase despite rising pressure on margins

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

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

In 2010, our sales to third parties were €3,197 million, an increase of €752 million over the previous year (volumes 13%, prices 4%, portfolio 8%, currencies 6%). The strong growth in sales resulted from the general economic upturn as well as inventory restocking along the entire value-adding chain and was also boosted by the full-year inclusion of the integrated Ciba businesses.

As a result of the global economic recovery, demand rose considerably in all business areas. Owing to the temporary shortages of raw materials and the high capacity utilization rates at our plants, we could not always fully meet additional demand. In our business with dispersions, volumes in all regions increased significantly. We also posted substantial growth in sales and sales volumes of pigments. Our sales of resins exceeded the previous year’s level; only our business with products for the printing industry stagnated. In our additives business, higher sales were due in part to the success of our business with specialties for the manufacture of liquid crystal displays, which were in high demand in Asia.

Margins for dispersions, pigments and resins were maintained, and even improved in some cases, despite increasing raw materials costs. In the additives business, margins declined slightly. Fixed costs were higher than in 2009, mainly owing to structural effects from the Ciba integration. Thanks to strong business performance, income from operations was far above the previous year’s level.

In 2011, we expect a minor increase in overall demand. Our key customer industries – automotive, construction and packaging – will continue to grow in the coming year. We therefore expect our sales to rise slightly compared with 2010. However, the increasing availability of raw materials will put more pressure on margins. Earnings should climb substantially as we maintain our cost discipline and realize further synergies from the integration of Ciba. In coming years, we will continue the restructuring of our pigments business and expand our production capacities in Asia.

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