Financial Statements - Solvay

32
Solvay Global Annual Report 2008
The main growth drivers
in markets
In the Minerals cluster:
4% average annual growth
expected in the global carbonates
market
Faster growth in Eastern Europe,
Asia and Mercosur;
growth of specialties, in particular
bicarbonate;
development of new applications
like glass for high energy
performance buildings and for
supports for solar energy systems.
In the Electrochemistry and
Fluorinated Products cluster:
3%, average annual growth
expected in caustic soda and
6% in epichlorohydrin
For chlorine/caustic soda
co-products:
demand for chlorine defi nes the
market in developed countries;
demand for caustic soda defi nes it
in emerging countries.
For epichlorohydrin:
worldwide development of our
EPICEROL ® process.
In the Oxygen cluster:
4.5% average annual growth
expected
Traditional hydrogen peroxide
markets like paper, chemicals,
textiles (in Asia);
new markets like propylene oxide
production (a captive market);
growth markets like water
treatment, disinfectants, ore
processing, electronics.
The Minerals cluster:
Soda Ash and Derivatives,
Advanced Functional
Minerals
In Soda Ash, strong demand in
2007 from growth markets continued
during the fi rst 10 months of 2008,
forcing sites to produce at maximum
capacity. In the fi nal months of the
year, and more particularly from
mid-December, the impact of the
economic crisis increased, affecting
most soda ash markets to different
degrees and in different timeframes,
depending on the applications and
degree of integration.
2008 also saw the cost of energy,
coal, coke and gas rise to record
levels. This negatively affected
production costs, placing severe
pressure on margins. Recent
investments in co-generation at
several sites have limited, but not
totally offset, the impact on results of
this price increase.
This did not prevent SBU Carbonate
from implementing a certain number
of strategically important projects.
The acquisition of the Alexandria
Sodium Carbonate Company, with
its soda plant close to Alexandria
(Egypt), is part of the Group’s
geographic expansion strategy.
This plant, which was built in 1974
and fully modernized in 1990,
currently represents a production
capacity of 130 kt/year of soda ash.
It will enable Solvay to respond to the
growing needs of Egyptian customers
and to support projects in fastgrowing
Middle Eastern and North
African markets.
In Bulgaria, the capacity expansion at
the Devnya soda ash plant (+ 300 kt/
year) will be operational from 2009.
To diversify energy sources, the
Group has begun building a
power plant fuelled by solid-waste
derivatives at the Bernburg (Germany)
site, in partnership with Tönsmeier.
This plant will provide energy for
the site’s soda ash and hydrogen
peroxide production facilities from
2010 onwards.
Using recycled materials like plastics,
woodworking waste, textiles, paper
and cardboard, this plant embodies
the Group’s commitment to search
for alternatives to fossil fuels and CO 2
emissions.
Specialty soda ash derivatives are
continuing to expand in terms of both
volume and new applications.
Our Bicarbonate activity is growing
dynamically in existing applications,
like the SOLVAIR ® Select 300
process, developed in the United
States. Specifi cally designed to treat
sulfur dioxide (SO 2 ), it supplements
the existing range of products for
treatment of incineration fl ue gases
(NEUTREC ® ). SOLVAIR ® Select 300,
for which a new 125 kt/year
production unit is under construction
and will come into operation in 2010,
will be produced from previously
unutilized by-products, using a new
process and refl ecting the Group’s
commitment to make better use of