Paper Chemicals

  • Sales significantly below previous year’s level
  • Decline in sales largely due to lower prices and negative currency effects
  • Earnings decrease significantly, mainly on account of lower margins
Paper Chemicals – Sales by region (Location of customer)
Performance Products – Paper Chemicals – Sales by region (pie chart)Enlarge image

Sales to third parties in the Paper Chemicals division fell by €122 million to €1,442 million compared with 2012 (volumes –2%, prices –4%, currencies –2%). Adjusted for the effects of restructuring measures, sales volumes matched the level of the previous year. This meant that our business developed better than the rest of our market, which shrank slightly in 2013. Lower raw material costs and an aggressive competitive environment led to declining prices. Negative currency effects additionally dampened sales.

The market development for graphical paper and packaging goods was considerably weaker than expected in all regions. Demand for paper chemicals declined as a result. While the paper industry in Europe and North America was marked by consolidation, massive overcapacities arose in Asia, especially in China. In this environment, we continued to realign our portfolio toward chemicals for packaging paper. Furthermore, we continued to concentrate on product lines with clear competitive advantages for us and for our customers. For example, we significantly increased sales volumes of VFA-based cationic polymers, which enable paper manufacturers to increase efficiency and reduce costs in the production process, thereby growing faster than the market.

Income from operations before special items fell considerably, mostly as a result of lower margins. Fixed costs were at the prior-year level. Our continuous cost-reduction programs and restructuring measures, such as exiting the optical brightener business in North America, were able to compensate for higher costs from the startup of new plants in Asia as well as from investments in our Center for Sustainable Paper Packaging.