Sales breakdown 2004 - Solvay

The “minerals” pole:
Soda ash and derivatives, barium
and strontium carbonates,
Advanced Functional Minerals
Global Annual Report Solvay 2004
24
2004 saw a steady increase in world demand for Soda Ash.
Production plants pushed up output, reaching their capacity
by the end of the year. A major contributing factor was the
continuing growth of demand in China. Even with more
local capacity coming on line, China’s soda ash production
has been unable to keep up with growth in the region, and
American and European exports to the Asia-Pacific region
have continued or increased.
Production costs have risen sharply worldwide. Reasons
are specific to each region, but in each case relate to rising
raw material and energy costs:
– China: a shortfall in salt and the need to import from
Australia
– Europe: rising energy and fuel (coke, etc.) prices
– USA: higher gas prices.
Action has been taken to contain the erosion of margins,
increase competitiveness in this area and to be physically
present in Asia, the fastest growing market.
The Group has also discontinued structurally unprofitable
units. American Soda, in Colorado (USA) used an
unprofitable, energy-intensive solution mining process.
Soda ash production was halted there in mid-2004.
Also announced was the cessation of soda ash production
at Ebensee (Austria) in mid-2005, given low capacity and
prohibitive logistics costs.
Parallel with this, in April 2004 a letter of mutual interest
was signed with Nanjing Chemical Industries (NCI),
a subsidiary of Sinopec (China), to create a joint venture
to operate a production unit in China. Negotiations with
NCI / Sinopec are continuing.
These actions will together give a broader dimension and
an increasingly worldwide structure to our carbonates
activity, with highly competitive production centres on the
three consumer continents.
Specialist soda ash derivatives, in particular Sodium
Bicarbonate, continue to grow. In Europe a new unit will
be built at Bernburg (Germany) and come into production
in early 2006.
In the USA, it was decided to continue to operate American
Soda’s bicarbonate production facilities in Colorado, despite
closure of soda ash production there.
These decisions confirm Solvay’s position as the world’s
largest sodium bicarbonate producer and the second largest
in the USA.
As well as operating at almost 100% capacity in 2004,
our production units achieved excellent safety results. 2005
started with all units expected to operate at full capacity.
Our Barium and Strontium Carbonates activity remains
below expectations. The reason lies in falling demand for
strontium carbonate in Europe and the USA, with the
closing of four customer sites producing special glass for