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AkzoNobel Pulp and Paper Chemicals

The year began with a continuation of our good performance in 2007, which was a record year for our business. The first quarter of 2008 was actually our best ever quarter. We achieved volume and revenue growth and enhanced our position in the market, both in bleaching and paper chemicals. However, our markets came under pressure and demand declined during the second half of the year.

We had to contend with extended shutdowns at customer mills, as well as customer consolidation. We therefore ended the year with a lower result than in 2007. One area where we made significant advances was in our efforts to become more sustainable, with a growing percentage of our turnover now coming from eco-premium products.

Geographic overview

We achieved strong growth in South America, building on the success of 2007. By the end of the year we successfully completed construction of a new chlorate line in Jundiai, Brazil, which will supply our new chemicals island at the Três Lagoas mill. Operations at the mill are scheduled to commence in the second quarter of 2009. The total investment in these projects amounts to €50 million.

Our business also grew in North America, although conditions were tough in Europe, where the market gradually slowed down due to decreasing demand. We were also burdened with energy price hikes and increased fiber costs. An important development in Europe was our acquisition of Levasil, the silica sol business of the German H.C. Starck Group. This also enabled us to make substantial in-roads into non-pulp and paper markets such as electronics and other specialty products. In addition, the transaction will further improve our business as a strong producer of silica sols and help us to become more competitive by enhancing our production and application technology.

Jan Svärd, Managing Director Pulp and Paper Chemicals (photo)

Jan Svärd
Managing Director
Pulp and Paper Chemicals

In € millions

Revenue – Pulp and Paper Chemicals (bar chart)
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