3/1/2012

Vinnolit - Success with Specialty PVC

In the second half of 2011, however, demand has decreased depending on market conditions. In the next years the company will gradually expand capacities for PVC specialties and further invest in the modernisation and expansion of production facilities as well as in safety, environmental protection and energy efficiency.


Business development in 2011

After the partial market recovery in 2010 and a strong first half of 2011, the European PVC business has considerably lost momentum. Vinnolit has still profited on the market side from its strong position in the specialty area and has further strengthened its market position in key global growth markets. The demand for paste PVC was very high mainly in spring to summer. Therefore, attractive margins could be achieved. But in the second half of the year demand has slackened. In contrast, the S-PVC demand has been restrained overall after a good start. Increased prices for raw materials could not be passed on and margins have been unsatisfactory therefore. For caustic soda, sales and prices have been satisfactory. But due to the declining demand for PVC, caustic soda production – which is coupled to PVC production – had to be reduced in the second half of the year.

The turnover in 2011 was 923 million euros – driven mainly by raw material prices – and has exceeded previous year and even pre-crisis level. The financial result (EBITDA) has nominally regained pre-crisis level, but does not yet reflect the expected performance of the company according to the investments in recent years.

Outlook 2012: „Further improving our performance“

The markets for specialty PVC have recovered considerably faster after the economic crisis than the ones for S-PVC. To meet the, in the medium term, globally rising demand, Vinnolit will expand capacities for PVC specialties in the coming years gradually.

The further development of the PVC market in 2012 depends on the general economic development and, therefore, remains uncertain at present. Risk factors include in particular the development of financial markets and, as feared, a further slowdown in the global economy.

Investments

In 2011 Vinnolit has invested 26 million euros, mainly in the expansion of capacities for specialty PVC, modernisation and expansion of production facilities and in safety and environmental protection. An important goal remains to further improve energy efficiency to reduce energy costs and protect the climate. Thanks to the many ideas that have been submitted by Vinnolit employees from all sites within the project "Vinnolit Saves Energy", in the next few years the Vinnolit group will be able to save over 300 million kWh of electricity equivalents (across all types of energy) annually. However, this requires significant initial investments, which will be made gradually over the coming years. For 2012, investments amounting to probably about 21 million euros are planned.

Progress in sustainability

In the summer of 2011 the European PVC industry launched the new sustainability programme VinylPlus. It builds on the successes of the sustainability initiative Vinyl 2010. With VinylPlus, the European PVC industry targets to further increase PVC recycling, to further reduce emissions, to promote the sustainable use of PVC additives and to contribute to climate protection through energy efficiency and the responsible use of resources and raw materials over the next 10 years (www.vinylplus.eu). Vinnolit supports VinylPlus as an "Official Partner" financially, ideally and through active participation.



Editorial:
Dr Oliver Mieden, Environmental Affairs / Corporate Communications
Vinnolit GmbH & Co. KG, Carl-Zeiss-Ring 25, 85737 Ismaning, Germany
Tel.: +49 89 96103-240, Fax: -122, e-mail: oliver.mieden@vinnolit.com

Andrea Walter, Public Relations
Vinnolit GmbH & Co. KG, Carl-Zeiss-Ring 25, 85737 Ismaning, Germany
Tel.: +49 89 96103-240, Fax: -122, e-mail: andrea.walter@vinnolit.com