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AkzoNobel Pulp and Performance Chemicals


“All three main businesses made an important contribution to the overall performance improvement”

Overview

The momentum we have been building up over the last few years continued as we achieved another record performance. EBITDA improved significantly, driven mainly by strong margin management, which helped to mitigate the impact of the economic slowdown.

Analysis

Having refocused our strategy to concentrate on activities with global leadership positions, all three of our main businesses made an important contribution to the overall performance improvement. Bleaching Chemicals had a strong year in Latin America, but also did well in Europe and North America, while Specialty Products (with our Expancel microspheres) outperformed its record year in 2011. It was more of a mixed picture for Silica and Paper Chemicals, primarily due to the weak economic conditions in North America and Europe. Raw material prices were not as volatile as the previous year, and although 2012 began well in terms of volumes, they progressively came under more pressure, particularly in the paper chemicals sector. However, we were able to manage our margins very effectively and consolidated our positions in our key markets.

Highlights

We introduced our new strategy in April in order to globalize our business operations and further strengthen our market positions. This included divesting some non-core activities and optimizing the production footprint, as well as changing the name of the business to Pulp and Performance Chemicals, which better reflects our focus on three core technologies with global leadership positions. We are now better placed to build on the market strength of these activities, further increase profitability and give current and future customers full value from our position as a world leader in our industries. Many customers, however, still remember us by the Eka Chemicals name, so we will continue to use the Eka name as a product brand for the pulp and paper industry. Another major highlight was the €80 million investment in the construction of a new Chemical Island facility in Brazil which will supply the Suzano Maranhão pulp mill. The project should be completed by the end of 2013. The Suzano investment came just a year after we announced plans to build a €90 million Chemical Island in Três Lagoas, also in Brazil, which was ready to start production in early 2013. Meanwhile in Europe, we took steps to right-size the organization in order to better align with prevailing market conditions.

Developments

The €32 million investment in our Stockvik site in Sweden was completed by the end of the year, giving us 30 percent more production capacity for our Expancel expandable microspheres. Our biggest innovation was EcoFill, a product which has advanced from a concept stage and has now been launched into the market. It enables paper makers to make a stronger paper with less fiber and higher filler levels, allowing for drying times that result in less energy consumption during the production process, resulting in cost and environmental benefits. Progress was also made in the area of safety, which received a lot of attention.

Ruud Joosten, Managing Director – Pulp and Performance Chemicals (photo)

Ruud Joosten
Managing Director

Revenue
in € millions

Pulp and Paper Chemicals – Revenue in € millions (bar chart)

Geo-mix revenue by destination
in %

Pulp and Paper Chemicals – Geo-mix revenue by destination in % (pie chart)

Main products

  • Bleaching chemicals
  • Paper chemicals
  • Separation products
  • Expandable microspheres
  • Colloidal silica dispersions for various applications

Key markets

  • Pulp and paper industry
  • Pharmaceuticals industry
  • Colloidal silica dispersions for industrial use

Key brands

Pulp and Paper Chemicals – Key brands (logo)
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