Degussa plans Euro2.3bn capex over next three years

29 December 2004 12:36  [Source: ICIS news]

LONDON (CNI)--German specialty chemicals company Degussa said Wednesday it planned about Euro2.3bn ($3.1bn) in capital expenditure over the next three years.

Degussa said the proposed expenditure was roughly in line with depreciation and reflected the difficult economic situation and its determination to maintain a 'focused' investment policy.

Around Euro850m is earmarked for investment next year, including Euro150m for a fourth methionine plant in Antwerp, Belgium. The plant, being built to meet rising demand for amino acids in animal feed, is expected to cost a total of Euro350m and is due for completion in late 2005. 

This year Degussa said its capital expenditure would probably not exceed Euro750m, some Euro75m or 9% less than forecast in August.

Utz-Hellmuth Felcht

Capital expenditure in 2005-07 will include an estimated Euro80m-90m on a new production line for isophorone products at its Herne, Germany site. The investment, which Degussa has quantified only as being in the "high double-digit million euro range" is subject to formal approval by the company's management and supervisory boards. Assuming this is granted, the new line would begin operating in 2007.

Degussa chairman Utz-Hellmuth Felcht said about Euro100m a year would be invested over the next few years in China. Felcht said this was in line with the company's strategy of focussing on opportunities for organic growth and enhancing the company's position in regional growth markets such as China, Eastern Europe and the Middle East.

The company also plans to increase its annual spending on research by about Euro100m over the next few years. Degussa said this would boost its research-to-sales ratio to 4% over the mid term. It confirmed that over the next five years Euro50m would be spent on a nanotronics science to business centre at Marl, Germany.

By: Neil Sinclair
+44 20 8652 3214

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