Coatings - AkzoNobel

The continuing trend toward ECF (Elementary Chlorine
Free) bleaching of pulp should benefit sodium chlorate
sales. Environmental Protection Agency (EPA) Cluster
Rules in North America will strengthen ECF bleaching.
However, implementation of the EPA Cluster Rules has
been somewhat slower than anticipated due to the
economic downturn and impending litigation. Our
leadership in the worldwide sodium chlorate market
remains undisputed. New capacity in Mo i Rana,
Norway, which will come on stream early in 1999, will
strengthen this position and keep pace with market
growth.
The hydrogen peroxide market in continental Europe
improved substantially in 1998, but the North
American market remains depressed.
Our paper chemicals business continued its positive
development. Results were satisfactory and higher than
in 1997. We strengthened our position in a number of
major markets and entered several new ones.
Operations in Asia, including the new plant in
Surabaya, Indonesia, benefited from our enhanced
competitiveness and delivered satisfactory results.
Our global position in silica sol improved further from
the completion of capacity expansion in Sweden,
Germany, Taiwan, and North America. The styrene
butadiene (SB) latex business, a 50-percent joint
venture of Eka Chemicals and Polymer Latex GmbH,
reported satisfactory results. Additional SB capacity
came on stream in Oulu, Finland, early in 1999.
Akzo-PQ Silica v.o.f., our 50-percent joint venture with
PQ Corporation, suffered from stiff competition in the
Western European market for silicate commodities. Its
position in specialty products, including deliveries of
silica for the ”green tire” market, further improved
(silica filler in tires helps reduce fuel consumption and
improves wet grip). Output from expanded capacity at
the Düren site in Germany came on stream in the
fourth quarter. Results were lower than in the
previous year.
AKZO NOBEL ANNUAL REPORT 1998
47
CHEMICALS
FUNCTIONAL CHEMICALS
Sales NLG 1,510 million (1997: NLG 1,340 million)
Upward trend continued
Functional Chemicals’ results continued to improve with
good contributions by all business areas.
Business conditions for monochloroacetic acid (MCA)
were stable, but prices were under some pressure.
Denak Co. Ltd., our 50-percent MCA joint venture in
Japan, reported unchanged earnings despite the
adverse economic developments in Asia. Our strategy
of optimizing the product mix and developing
specialties in the carboxymethylcellulose (CMC) unit
was successfully pursued, resulting in higher earnings.
The results for methylamines stabilized. Higher sales
volumes were partly offset by price erosion. Choline
chloride—a trimethylamine-derived animal feed
additive—was affected by significantly lower demand in
Asia. A new plant came on line at Yixing Akzo Nobel
Sanyuan Chemical Company Ltd., a choline chloride
65-percent joint venture in the People’s Republic of
China.
Chelates continued to implement its growth strategy.
The U.S. chelates business of Hampshire Chemical Co.,
which was successfully integrated, provides a strong
foothold in North America. Construction of a new
chelates plant in Lima, Ohio, is under way and will
come on stream in 2000.
Expansions of the micronutrients plant in Kvarntorp,
Sweden, will become operational in 1999 and should
reinforce our leadership in this market.
Overall, the carbon disulfide business continued to
suffer from the stagnating rayon industry in the western
world and the weak U.S. agrochemicals market. Despite
the political turmoil in Indonesia we expect to start up
the Cikampek carbon disulfide plant in Java—built to
serve the Asian rayon industry—by mid-1999.
The former Courtaulds carbon disulfide activities in the
United Kingdom were shut down, following
Akzo Nobel’s acquisition of that company.