+1 - Solvay

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Solvay holds a significant stake)
also staged a significant earnings
recovery in the second half of
2007, thanks to its excellent
competitiveness, reliable
installations and ability to react
rapidly in a volatile market.
The capacity expansions there – of
VCM from 200 to 400 kt/year and
of caustic soda from 130 to 260 kt/
year – were carried out on schedule
and within budget, with the new
units successively brought into
operation from December 2006
onwards. A 80 kt/year expansion
of PVC capacity is under way
and should start production in
mid-2008.
It should be noted that the planned
acquisition of Apex Petrochemicals
has fallen through.
The complete integration of Vinythai
at 400 kt of PVC a year is currently
under examination.
The sixth report of Vinyl 2010,
the Voluntary Accord of the PVC
Industry, was published in May
2007, showing the industry to be
on schedule towards achieving its
objectives.
Production levels, technology and
applications for recycled PVC at
the VINYLOOP ® unit at Ferrare
continue to improve, despite
a still-unattractive European
economic environment for recycling
projects. An additional EUR 8
million investment in improved
technology, approved in 2006, will
come onstream in early 2008. From
then on it will be possible to recycle
composite PVC waste to a quality
close to that of the virgin product,
making recycled PVC available for
higher quality applications.
Despite constantly high PVC prices
and a certain slowing of activity
at the end of the year, the results
of our PVC compounds
activities in Europe have continued
to recover in three of our four
subsidiaries thanks to new progress
in sales and productivity.
An ambitious growth plan, based
on expanding sales in new
countries and bringing new
products to market, is currently
being finalized. Earnings of Dacarto
Benvic, our 50/50 partnership in
Brazil with the Brazilian Carvalho
family, remain good, with excellent
market conditions enabling us to
pass on most of the increases in
PVC resin prices.
In Russia, earnings of Soligran, our
50/50 partnership with the Nikos
group, also progressed well in 2007
in a climate of good cooperation.
More generally, in a context of
high oil prices, PVC is proving
increasingly competitive and ecoefficient
with its low oil content
and excellent recyclability.
Pipelife (50/50
joint venture with
Wienerberger in pipes
and fittings) took full advantage
in 2007 of a favourable economic
climate and of the many measures
taken in recent years to strengthen
its competitiveness and innovation
capacities.
In terms of competitiveness,
Pipeline is capitalizing on the many
cost-reduction and restructuring
measures undertaken since
2001 (site closures, automation,
productivity gains, internal and
external benchmarking, etc.). At the
beginning of 2008, restructuring
started at the Zaragoza (Spain) site,
with a view to reducing costs and
concentrating on the most profitable
markets.
The growth in Pipelife’s activities
has been boosted by:
• the acquisition of Quality Plastics,
not far from Cork (Ireland),
strengthening its position on the
hot & cold market (plumbing
piping using specialty polymers)
and rounding off its European
coverage;
• the start-up of a new plant south
of Moscow (Russia) producing
pipes and fittings for domestic
applications, water distribution
and sewage networks;
• its investment at Debrecen
(Hungary) in a production line
for hot & cold piping for Central
Europe.
Innovation is a permanent feature of
Pipelife’s activity, with at least 15%
of sales each year coming from
new products, new applications and
new technologies.
Pipelife remained very active in
the building and infrastructure
market (drains, irrigation, drainage,
electrical protection, plumbing,
etc.), in particular in Central Europe,
Scandinavia and the Baltic states.
Sales in Europe rose by 7% and the
operating margin in 2007 was 15%
higher than in 2006.
Solvay Global Annual Report 2007