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Functional Chemicals

Following a strong year in 2010 and a good start in Q1 2011, the performance of the Functional Chemicals’ business was impacted by the economic downturn. For most businesses, sales volumes ended below last year. The new Ethylene Amines’ and Chelates’ plants in Ningbo – which started up during the year – kept the portfolio’s overall sales volumes in line with 2010.

However, as a result of effective margin management – on the back of price increases – revenue increased by 6 percent, seen at some business segments in Q4. Performance in the year was also impacted by year-on-year increases in raw material costs and unfavorable transactional currency impacts.

In Q4, earnings declined compared to the previous quarter. Sales volumes dipped below previous year as the economy slowed down and customers postponed orders to reduce inventory levels towards the end of the year. For many product lines this resulted in volumes being below normal levels, however, market shares were maintained in general. The reduction in performance over the last quarter was most visible in Functional Chemicals, which experienced sales price pressure in some segments towards the end of the year, driven by lower demand and improved product availability in the market. Raw material price increases continued to have an impact, though stabilized towards the end of the year. The main driver for the increases was higher oil prices, resulting in higher prices for oil derivatives.

Copyright © 2012 Akzo Nobel N.V.