Polymer Chemicals was unable to equal the 2007 performance level due to an unprecedented decline in volume during the last quarter. This was due to an increased weakness in key markets such as construction, automotive and durable goods. Currency translation was also a major hurdle, along with unprecedented hikes in raw material costs resulting from the high oil prices. Extreme weather events had a further significant impact on our US operations. Despite all of this, we kept a tight control on costs throughout the year and continued to focus on developing sustainable technologies for our customers.
Top line was slightly down, but we increased market share in the BRIC countries and grew with the market growth in South America. Results in Western Europe were also strong until the economy slowed down towards the end of the year. In North America – which is an important market for us – our High Polymer Specialties (HPS) business was affected by the housing and economic downturns. HPS mainly supplies initiators to the PVC industry, which in turn serves the housing and construction markets, which felt the impact of the slowdown. The performance of our Cross-Linking Peroxides, Thermoset Chemicals and Polymer Additives business, and our Organometallic Specialties activities, more than compensated for the difficult year in HPS. Both of these businesses are less sensitive to any single segment of the economy, while the strong demand for our products also helped to offset some of the pressure we faced.
Hurricane Ike had a major impact on our US operations. We lost production at our two plants in the Houston area for several weeks and a number of customers and suppliers were also affected. Fortunately, none of our employees were hurt. However, the hurricane did have a significant effect on our results. The Beijing Olympics also caused major logistics disruption in China. Transportation and operation restrictions were put in place which froze the transportation, import and export of certain goods – including many of our own products and key raw materials – which was obviously a hindrance to our operations. Overall, the restrictions were in place for about a month.