Ciba warns of fragile economy, slower development

07 March 2008 14:45  [Source: ICIS news]

LONDON (ICIS news)--Ciba Specialty Chemicals CEO Brendan Cummins forecast another demanding year for the speciality chemicals sector at the group’s annual general meeting (AGM) on Friday.

“The outlook for the global economy is uncertain and very fragile,” he told shareholders in Basel, Switzerland.

“We see an inevitable slower pace of industrial development. And raw material costs are expected to remain high.”

Cummins reiterated guidance given when Ciba revealed its 2007 annual results that assuming no significant deterioration in business conditions the aim is to achieve sales growth in local currencies in line with GDP growth and an increasing in operating profits for the year of around 10%.

The new Ciba CEO had warned at the time of the annual results presentations that the slowdown in the US, particularly in the automotive and construction markets, would continue to have an effect on performance.

“There is nothing that we see on the horizon that suggests that all the competitive pressures will ease in the chemical sector," he said.

Cummins called 2007, when the company lifted sales 3% and the operating result 4% to Swiss francs (Swfr) 552m ($541m/€342m), a demanding year. 

Chairman Armin Meyer said the big strategic milestones were behind Ciba.

“The big strategic milestones are behind us, and they are starting to deliver positive results,” he said.

“Our strategy continues to focus on investing into our strengths, on profitable growth, on securing value and on improving operational efficiency,” he added.

“Going forward, we will strive for organic growth and support our positions by adding complementary technology through small or mid-sized bolt-on acquisitions,” he said.

($1 = Swfr1.02/€1 = Swfr1.57)

By: Nigel Davis
+44 20 8652 3214

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