- Sales rise in 2011, mainly thanks to higher prices
- Available supply unable to fully meet customer demand, particularly for butanediol and derivatives
- Increase in earnings due to higher prices as well as strong sales volumes and good capacity utilization rates, in particular in the first half of the year
- Outlook 2012: sales increase; earnings below the previous year’s level due to higher pressure on margins and rising fixed costs
Intermediates – Sales by region
(Location of customer)
Thanks to higher prices, sales to third parties rose by €175 million in 2011 to €2,704 million (volumes –1%, prices 10%, currencies –2%). In general, demand from our key customer industries, such as the plastics, agricultural and pharmaceutical industries, remained constant in all regions. During the course of the year, however, growing uncertainty regarding global economic development led to inventory destocking, particularly among our Asian customers in the value-adding chains for coatings and textile fibers.
Demand from our customers in 2011 once again exceeded global product supply in some cases, for example, for amines and polyalcohols, and especially for butanediol and derivatives. The scarcity within these product lines was additionally intensified at the end of May as a result of a temporary shutdown for acetylene and its derivatives due to a disruption at the Ludwigshafen site. This limited our ability to deliver these products until the end of September.
Rising costs for our key raw materials could mostly be passed on to the market through higher sales prices. Thanks to strong sales volumes of our products and high capacity utilization, particularly in the first half of the year, we were once again able to improve income from operations from the very good level of the prior year.
In addition to a methylamines plant in Geismar, Louisiana, we also started up a plant to produce ethanolamines and downstream products in Nanjing, China, in 2011. By contrast, we closed smaller plants producing methylamines and dimethylformamide in Camaçari, Brazil.
In 2012, we expect demand from most customer sectors to slightly exceed the high level of 2011. We therefore assume that our sales will increase. In the product lines amines, acids and polyalcohols, we expect increasing availability on the market to lead to more intense competition. The resulting increased pressure on margins and growing fixed costs will likely lead to earnings below the very good level of 2011.