ANNUAL REPORT 2011 A.S. CRÉATION TAPETEN AG

GROUP MANAGEMENT REPORT
54
pean wallpaper manufacturers are currently
no longer able to fully utilise their own
production capacities. While capacity utilisation
has since improved, the Managing Board of
A.S. Création believes that the wallpaper
industry is not operating at full capacity yet.
This is also true for A.S. Création. The Managing
Board sees the risk of this underutilisation
leading to ruinous price competition and,
hence, to a new consolidation process in the
global wallpaper industry. Against the background
of the pick-up in demand for wallpapers
and the resulting better capacity utilisation,
the likelihood of this scenario materialising is
considered to be low, however. Should a new
consolidation process arise nevertheless,
A.S. Création expects to emerge from it as a
winner thanks to its innovation and financial
strength.
Another potential risk for the wallpaper industry
results from the more stringent legal provisions
regarding the use of chemicals in the production
of wallpapers. Just like other industries, the
wallpaper industry uses such additives, e.g. in
the production of flat and expanded vinyl wallpapers.
Should these substances be banned in
general, these types of wallpaper could no
longer be produced with current technology.
There are two reasons, however, why the
Managing Board considers this potential risk
to be relatively low:
• There have been frequent discussions about
the potential health hazards posed by
additives such as plasticisers in the past.
The theoretical hazard depends on the use
of the finished product. If used as intended,
wallpapers do not present any hazard.
Moreover, in accordance with RAL-GZ 479,
A.S. Création exclusively uses non-volatile
plasticisers in its wallpapers. The sale of
the wallpapers produced by A.S. Création
has never been subject to any restrictions
and it is unlikely that the risk classification
of wallpapers will change in future.
• The above additives are also widely used
outside the wallpaper industry. If an additive
is likely to be banned or subjected to
restrictions, manufacturers will be under
great pressure to develop alternative
solutions. A.S. Création liaises closely with
its suppliers and will replace additives with
new, state-of-the-art solutions, which is
something the company has already done
in the past.
In the worst-case scenario of a general prohi-
bition of plasticisers, the entire wallpaper industry
would be equally affected. Such a change
would therefore not lead to any distortions in
the competitive situation. A high risk could
arise only if a competitor were able to secure
exclusive access to an equivalent substitute