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Functional Chemicals

Following two years of sustained performance improvement in Functional Chemicals, unfavorable market forces in the second quarter resulted in a more mixed performance picture across the business unit. Our High Polymers, XTP, Sulfur Derivatives and Salt Specialties businesses essentially matched last year’s performance. However, the performance of Ethylene Amines, Chelates and Performance Additives was below the second quarter of 2010. While we realized continued volume growth overall, significant year-on-year increases in raw material costs and unfavorable currency effects negatively impacted margin. In addition, an extended maintenance stop in Stenungsund, Sweden and start-up costs in Ningbo, China, further impacted our results in the quarter. These expenses notwithstanding, at the mid-point of the year the performance in our growth platforms remains encouraging and our asset utilization high. Elevated feedstock costs and unfavorable currency developments have increased the pressure on margins and thus heightened the focus on our margin management discipline.

Copyright © 2011 Akzo Nobel N.V.