Solvay | Strategy and Financial Highlights Information from ICIS

Edited from “strategy”, company website

The “change strategy” that was first launched in 1998 focused on two major elements: strengthening the company’s leadership in all of its activities and accelerating the development of the pharmaceuticals sector and its specialties products. These objectives are said to have been met and the company will now strategically focus in 2008 on the following three areas: growth in pharmaceuticals, chemicals and selected plastic areas; innovation; and increasing its presence in Asia, the Americas and Eastern Europe. 

“The strategy we have chosen is clear, such a strategy is possible only within a long-term vision”, says chairman, Christian Jourquin.

Its strategy of leadership and faster development in pharmaceuticals and specialities, and of geographic deployment in high-growth zones, is expected to be of a ‘winning combination’. In addition, the company is benefiting from the results of a group-wide innovation initiative, which is bringing new product, processes and applications, as well as improvements at all levels across the company.

Solvay further says that it 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. 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 business.

It further expects 20% of its pharmaceutical sales 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”, says 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.

Pharmaceuticals strategy for 2010

1. Concentrate on therapeutic fields.
2. Improve profitability with an operating margin of 20%.
3. Annual savings of €300m.
4. Sales in excess of 20% to €3.2bn.
5. Increase R&D/sales ratio.

Chemicals strategy for 2010

1. To follow a policy of continuous improvement.
2. Manage its product portfolio.
3. Growth in specialties (mainly bicarbonate and fluorinated and organic specialties).
4. To open up new paths, especially in organic chemistry, with strong external support from partnering relationships with major customers and internal support from its innovation drive.
5. Continuing geographic expansion through investments in flagship products and in high-growth areas.
6. Pursue technological innovation.

Plastics strategy for 2010 (for the two activity clusters, specialties and vinyls)

1. To capitalise on existing strengths, size and global presence, technological leadership, and potential for synergy.
2. Management of the activities portfolio in terms of added value, growth potential and resistance to business cycles.
3. Constant strengthening of competitiveness, R&D and customer proximity.
4. Restructurings, modernisations, expansions and acquisitions.
5. Strict control of strategic initiatives and operations.
6. Constant search for new business opportunities.

Please also see Solvay may reinvest in Asia after pharma sale – PwC on ICIS news.

ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.

A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.

See the article and analysis of the ICIS Top 100 on ICIS news.

Financial highlights: Solvay, year ended 31 December

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Solvay Company Structure

Solvay operates in pharmaceuticals, chemicals and plastics. In 1861, Ernest Solvay developed a revolutionary ammonia-soda process for producing sodium carbonate. The Solvay group was founded in 1863 to exploit this process.
More about Solvay Structure

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