2009 - Jaarverslag

REPORT OF THE EXECUTIVE BOARD > Geosynthetics & Grassprevious years – the aim in the fourth quarter was to achieve a lowersales volume. This provides a better starting point for demand in thenew season.The operating result before amortisation of intangible fixed assetsdeclined by 55% to € 16.8 million (2008: € 37.8 million). EBITA declinedto a relatively greater extent and there was considerableunderutilisation of capacity. Active control of working capital andslowing of production also contributed to this decline. The EBITAmargin decreased to 4.3%.The market is devoting increasing attention to the positiveenvironmental aspects of geosynthetics. The use of environmentalarguments and the reduction of environmental effects are thereforereceiving greater emphasis in the promotion, design and specifications.Alternatives to our geosynthetics are usually concrete, stone and steel,which often have to be transported over long distances. In the case ofgeosynthetics, by contrast, locally available materials (sand, sludge)are used. In the case of land reclamation (hydraulic filling with sand)there is usually considerably less need for dredging, which producesenvironmental effects.TENCATE GEOSYNTHETICS ANDTENCATE INDUSTRIAL FABRICSMARKET POSITION AND STRATEGYTenCate is the largest producer worldwide of (high strength) fabricsand nonwovens for infrastructure, construction and the environment(geosynthetics), as well as industrial fabrics for applications such asagriculture, horticulture and the recreation sector (industrial fabrics).With manufacturing sites in Europe, the US and Asia, TenCate alwaysoperates on the basis of market proximity which also gives rise tologistical and price advantages. Geosynthetics by far contributed thelargest proportion of revenues in this group. A distinction must bedrawn between wovens and nonwovens (fleeces). In general, wovenproducts are stronger and withstand greater forces.The nonwoven market is a volume market. The important factor forTenCate is that the company is strongly represented in both marketsegments and provides extensive technical advice on the use ofgeosynthetics for civil engineers, construction managers andcontractors. Here too, the aim is to achieve a system approach focusedon solutions. Geosynthetics form part of the overall structure anddeliver functional added value.GENERAL PERFORMANCEIn the US, where the economic decline has already been a factor since2007, the Geosynthetics group has gradually adjusted the cost level tothe market situation. As a result, the negative effect on the result wasrelatively more limited than in the Grass group.Worldwide, TenCate Geosynthetics got off to a hesitant start in 2009.Particularly in the US, the volume was low, as a result of the almosttotal absence of the usual infrastructure projects. The US market stillshowed no recovery at the end of 2009, although the US Governmenthas announced stimulus measures for the infrastructure market.However, the stimulus funds have not yet shown any positive effectsin the public geosynthetics market.In Europe there was a limited decline in sales compared to 2008.Asia continued to show growth due to infrastructure projects in civilengineering. Geographic markets such as Africa are also showinggrowth. Since there is a worldwide trend in the sector and amongmarket players such as TenCate, which have responded promptly andappropriately to developments, TenCate’s market share increasedfurther.44Royal Ten Cate