Solvay plans to add €1.1bn to sales by 2012

01 October 2008 15:07  [Source: ICIS news]

LONDON (ICIS news)--Solvay is aiming for more than €1.1bn ($1.54bn) in additional sales by 2012 from new projects in chemicals and plastics as well as pharmaceuticals growth, its chairman of the executive committee said on Wednesday.

The company is planning to grow in emerging markets such as Egypt, the Mercosur countries, Russia and Thailand as well as reduce cyclicality in the busines, said Christian Jourquin, speaking at the company’s investors day.

He added that 20% of pharma sales were expected to come from emerging markets.

Due to decreasing availability of fossil energy, leading to higher prices and volatility, a technology push and regulatory pull is making renewable energies increasingly attractive.

Energy has become a crucial competitive differentiator, and fundamental changes are to be expected in the whole industry, said Jourquin.

The risk of supply shortages and less predictable profitability has led Solvay to invest in bioethanol projects in Brazil, as well as to focus on vertical integration in chemicals and plastics, he added.

Specialty polymers were expected to show sustained growth due to lower sensitivity to price evolution.

Jourquin said that for the chemicals business the soda ash market remained tight so far in the second half of the year but costs remained high.

Caustic soda demand was strong and price increases had been implemented in the third quarter, although there was some margin pressure on epichlorohydrin.

The hydrogen peroxide business had oisted volume growth and price increases in Europe and North America in the third quarter, he added.

In plastics, specialty polymers continued to grow, while the vinyls cluster in Europe was still under pressure from ethylene price volatility.

In Asia and the Mercosur zone, vinyls experienced good growth, but the turnaround of a major cracker in Brazil was expected to have an impact in the second half.

Results for Solvay’s pharmaceuticals division were in line with previous expectations and the company was on track to meet its 2010 targets, said Jourquin.

Solvay had sales of €9.57bn in 2007, and restated earnings before interest and tax at €1.19bn.

($1 = €0.71)

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By: Hilde Ovrebekk
+44 20 8652 3214

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