- Sales improve significantly; strong global demand, particularly in the first half of 2011
- Increase in earnings thanks to positive margin development, especially in the first half of the year
- Expansion of the Verbund site in Nanjing, China
- Outlook 2012: sales at previous year’s level; earnings below very good level of previous year as a result of lower margins
Petrochemicals – Sales by region
(Location of customer)
Mainly as a result of higher prices, sales to third parties in 2011 rose by €1,246 million to reach €8,839 million, thus significantly exceeding the level of the previous year (volumes –3%, prices 20%, portfolio 2%, currencies –3%). Until the third quarter, we benefited in all business areas from strong global demand for our products. As supplies on the market were limited in some cases, we were able to raise prices to pass on higher raw material costs to customers.
Overall, capacity utilization rates at our plants were good. As a result of strong demand, there were temporary supply bottlenecks for some products, in particular acrylates and solvents. Our margins therefore developed positively, especially in the first half of the year. Income from operations was above the level of the previous year.
During the third quarter, increasing uncertainty about global economic development began to have a negative impact on our market environment. In the fourth quarter, we were unable to maintain the high levels of the previous quarters due to declining demand.
During the year, we started up several new production plants at our Verbund site in Nanjing, China, including a butadiene extraction plant, an isobutene extraction plant and a 2-propylheptanol production plant. Furthermore, we successfully completed the expansion of the steam cracker. With the development of our Nanjing site, we are further strengthening our market position in China.
We expect our business development to remain good in 2012. Sales are expected to match the high level of the previous year, despite declining prices. According to our forecast, earnings are unlikely to reach the very good 2011 level due to lower margins.