16 January 2013 20:30 [Source: ICIS news]
BRUSSELS, Belgium (ICIS)--Belgium-based Solvay is sticking to ambitious medium-term growth targets even though market conditions in its home market of Europe remain challenging, its CEO said on Wednesday.
The current challenging European market conditions are being offset by recovery in the US and stronger performance in Asia and, together with operational improvement and organic growth, mean that the company can still attain growth targets set in 2011, according to the company's CEO, Jean-Pierre Clamadieu.
In 2011, Solvay set the target to grow earnings before interest, tax, depreciation and amortisation (EBITDA) from €2bn/year ($2.7bn/year) to €3bn/year between 2011 and 2016.
Speaking on the day the company unveiled its new corporate structure, he said: "There is no reason to change the target today. The economic conditions of 2015/16 are probably more important to achieve these targets than those of today."
He said the target will be achieved through innovation, capacity increases and operational improvement.
"Even in tough economic conditions, we can work on all these levels, and, in these conditions, we're placing even more emphasis on operational improvement."
In December 2012 Solvay unveiled plans to rationalise soda ash capacity in southern Europe. Solvay has three soda ash plants in Italy, Spain and Portugal.
Clamadieu declined to give more details about the plan ahead of an announcement later in 2013, but he conceded that the company's chlorovinyls and polyamide divisions are also under pressure.
Commenting on economic performance outside Europe, he said: "Asia seems to be going back into quite a dynamic economic situation. North America is quite good also, though Latin America is a little bit soft. I was at the Detroit Motor Show yesterday, and they are talking about 5-6-7% or maybe 10% growth expected in US auto industry this year."
Clamadieu said that if conditions worsen in Europe, he would put more emphasis on operational improvements. "We have always had a strong emphasis on cash and that will continue. We will continue to announce specific adjustments in specific businesses because of the economic situation."
($1 = €0.75)
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