Pharmaceuticals Sector - Solvay

38
Solvay Global Annual Report 2005
Expansion of VCM and PVC
capacities in Brazil began in
November 2005 as scheduled.
This investment strengthens the
competitiveness of the Elclor site
in particular and of the activity
in Mercosur in general.
In a highly competitive environment
with major price rises for raw
materials and utilities,
Vinythai (a Thai listed company
in which Solvay holds a signifi cant
stake) also achieved high earnings
thanks to its excellent competitiveness,
reliable installations and
an ability to react fast in a volatile
market.
The Vinythai Board of Directors has
decided to double the company’s
VCM capacity from 200 to
400 kilotonnes/year and its caustic
soda capacity from 130 to 260
kilotonnes/year, by building a
membrane electrolysis unit which
will provide a fully integrated supply
of chlorine and ethylene dichloride
(EDC) for its VCM production.
A contract has been concluded
to supply VCM to APEX, a nonintegrated
PVC manufacturer in
Thailand. The expanded VCM
facility is scheduled to come into
operation in the fourth quarter of
2006 and the electrolysis unit in
the fi rst quarter of 2007. These
investments will make Vinythai
even more competitive.
Solvay is also participating, as
a shareholder, in a VINYLOOP ®
project in Japan in partnership with
Kobe Steel. This unit, which is currently
under construction, should
begin production on schedule in
the second quarter of 2006.
Results of Performance
Compounds were very
differently affected in 2005 by
variations in the costs of the basic
raw materials - PVC, polyolefi ns
and elastomers.
Results for PVC compounds
improved considerably from 2004
under the combined effects of
lower PVC prices during much
of the year, cost reduction and
productivity improvement efforts,
and new product launches.
Soligran, a joint venture with the
Nikos group, which began operations
in 2003 at Tver in Russia,
got off to a good manufacturing
and commercial start in a growing
market.
Solvay Engineered Polymers (USA),
which is active in polypropylene
and elastomer compounds, continued
to diversify its products and
applications, strengthen customer
contacts and improve processing
effi ciency. In 2005 these efforts
were rewarded by volume and
profi t increases of over 40%
in its specialties (thermoforming
and vulcanized thermoplastic
polyolefi n) lines.
In polyethylene compounds at Padanaplast
(Italy), sharp price rises
for raw materials were only partially
offset by diversifi cation efforts, the
launch of new products and cost
reduction in more mature activities.
The joint venture with Original
(Shanghai, China) began operations
in February with specialties
for the cabling market. Innovation
holds the promise of future successes,
with the launch of 10 new
grades and the development
Plastics Sector
“ 2005 was a record
year for Pipelife.
”
of reticulated specialties and
foams in fi elds such as hot-water
distribution pipes, special cabling,
and insulation for metal piping.
Over 25% of sales in 2005 were
of new products.
The Plastics Sector has decided to
simplify its structure by distributing
the activities of the Performance
Compounds Strategic Business
Unit as follows:
– “PVC Compounds” (Benvic and
the Soligran and Dacarto Benvic
joint ventures) have been attached
to SBU Vinyls;
– “Compounds and Polyolefi ns”
(Padanaplast and Solvay
Engineered Polymers) have
been attached to the Specialty
Polymers SBU.
The fi nancial consolidation of the
Performance Compounds SBU
activities will be adjusted effective
from January 1, 2006.
Pipelife, the 50/50 joint venture
with Wienerberger in pipes and
fi ttings, benefi ted from the favourable
economic climate in 2005,