17 February 2011 16:32 [Source: ICIS news]
LONDON (ICIS)--Solvay's fourth-quarter plastic sales in 2010 improved significantly from the same quarter of 2009, which was largely due to a sharp increase in sales volumes of speciality polymers, the Belgium-based plastics and soda ash manufacturer said on Thursday.
Solvay reported fourth-quarter plastics sales up 23% year on year at €861m ($1.16bn), while full-year plastics sales were up 27% at €3.78bn. Sales volumes of speciality polymers in 2010 were up 36% from 2009, the company added.
Solvay cited strong demand, particularly in Asia, as a major factor driving the plastics segment's positive sales figures.
Recurring earnings before interest and tax (REBIT) in Solvay's plastics segment stood at €360m in 2010, up more than four-fold from the €86m recorded at the end of 2009, it said.
Results in Solvay's vinyls sector were more modest. Although demand continued to recover, slow activity in the construction industry in some western European countries limited growth.
Sales volumes of polyvinyl chloride (PVC) at SolVin, a joint venture between Solvay and BASF, held at a good level, although a seasonal slowdown in December weighed on figures, Solvay said.
Indeed, a number of PVC manufacturers had reported that this traditional slowdown in demand had actually pushed their margins into negative territory, as upstream ethylene had begun to steadily climb in November, outpacing movements in the PVC market.
Further downstream, sales volumes at pipe converter Pipelife, a joint venture of Wienerberger and Solvay, were on a similar level to those recorded in 2009. However, the 2010 operating result was below that seen in the previous year on weak construction activity in Europe, Solvay said.
Solvay's figures highlighted the plight of many PVC converters, which continued to report that they were absorbing most of the upstream price hikes, as it was impossible to pass the increases on to their own consumers.
Looking ahead, Solvay said it plans to increase its presence in the growing Russian market as construction of its 330,000 tonne/year RusVinyl PVC plant, a joint venture with Sibur, got underway.
Solvay said it will also be converting its electrolysis process at its Lillo facility in Belgium to membrane technology by the end of 2012.
Solvay’s net profit in the fourth quarter slumped 92% year on year to €16m ($21.6m) as overall sales fell 25% to €1.65bn.
($1 = € 0.74)
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