In € millions
National Starch is the leading supplier globally of specialty starches with a principal focus on supplying the food industry. We also serve niche papermaking markets and supply high value industrial starch applications for a variety of other consumer and industrial products and processes.
Although 2007 results were equaled, we have booked a non-cash impairment loss on goodwill allocated to this business, mainly due to the changed economic outlook and a reclassification to continuing operations. Margin management and volume growth, due to sustained strength in food sales, offset the sharply higher cost for corn and synthetic chemicals. In this business, profitability depends on the corn price. During 2008, we hedged the corn price into 2009. At year-end 2008, the corn price had fallen to a level lower than the hedged price, which will have an adverse impact in the first half of 2009.
Throughout most of 2008, our National Starch business was held for sale. During this time, the business functions were engaged with a program to work through the separation from the former infrastructure. Good progress was made in this regard and will further this agenda in 2009.
In parallel, the business continued to drive its innovation and sustainability agenda. National Starch traditionally has a strong HSE focus and continued to deliver good results on its safety statistics. It also made very good progress with its environmental endeavors, namely a very successful recycling program resulting in much reduced non-hazardous waste, as well as continued engagement with community activities throughout its global operations.