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Presentation of the groupPresentation of Sequana 1Minerals and chemical productsThe main minerals and chemical products used to produce paperand coatings include latex, polymers, carbonates and starch.Arjowiggins buys these minerals and chemical products fromvarious leading producers worldwide. It may enter into long-termcontracts to secure supplies of critical raw materials and ensuresthat it uses diverse supply sources at all times. Arjowiggins keepsan up-to-date database of suppliers across the globe.Energy and waterEnergy is a key component of Arjowiggins’ production process.The cost of gas and electricity is heavily dependent on oil and naturalgas prices, and is also affected by the deregulation of energymarkets, particularly in Europe.Arjowiggins’ energy policy seeks to secure reliable gas and electricitysupplies at an optimum cost by entering into fixed- andvariable-price contracts with local electricity and gas suppliers.Arjowiggins Graphic is a member of the Exeltium consortium inFrance, which has signed a fixed-price electricity supply contractwith EDF.Large quantities of water are required to produce paper. AllArjowiggins’ sites are located close to water and respect local andgovernmental drawing rights. Over the past few years, the companyhas reduced the use of freshwater in its production processesthanks to greater recycling efforts. Most of its installations areequipped with wastewater treatment facilities which dispose ofsuspended solids and help reduce the quantity of oxygen in thewater recovered.Arjowiggins – Key strengthsArjowiggins produces specialty papers and boasts a unique positioningon its market.Predominant focus on specialty productsArjowiggins derives more than 70% of its sales from productswith a high technical component:■■papers for banknotes and official documents, brand protectionand anti-counterfeiting/illicit trading solutions (ArjowigginsSecurity);■■premium fine papers and specialty papers such as tracing orcasting paper (Arjowiggins Creative Papers);■■eco-friendly papers, specialty papers such as playing cards,transfer papers or papers for medical use (Arjowiggins Graphic).Standard coated and uncoated papers sold by the Graphic andCoated US divisions account for the remainder of sales.Selling prices for specialty products are far higher than for traditionalcoated papers, reflecting the value-added resulting fromthe technical and environmental components of these papers. Asthe cost of pulp as a proportion of the total production cost is lessthan for commodity goods, Arjowiggins is less sensitive to fluctuationsin paper pulp prices. This is particularly the case in theSecurity division, where products are chiefly manufactured usingcotton fibres.Given the broad range of its business activities, Arjowiggins hasmany competitors.26%Security17%CreativePapers44%Security33%CreativePapersBreakdown of sales by division17%Coated US42%Green29%Specialty29%CoatedBreakdown of EBITDA by division22%Graphic40%Graphic1%Coated USIntegrated recycled pulp operationsArjowiggins is the largest integrated producer of 100%-recycledpulp thanks to its Greenfield plant (Arjowiggins Graphic).Greenfield produces premium, extra-white FSC®-certified recycledpulp, giving it a major advantage amid growing demand foreco-friendly products.Sequana | 2012 Document de référence (English version) | 33