SOLVAY GROUP LONDON MORNING MEETING

Transcription

1 SOLVAY GROUP LONDON MORNING MEETING June 25, 2008

2 READY FOR TOMORROW A WARM WELCOME P. Verelst Deputy Investor Relations 2

3 «CHEMICALS SECTOR : ON THE PATH OF GROWTH» M. V. DECUYPER General Manager of the Chemicals sector 3

4 Our Chemicals sector 67% 26% 7% Continuous review of business portfolio Exploit growth opportunities in emergent regions 19% 12% 10% 17% 4% Glass 4 Paper Detergents Chemicals Construction

5 Strategic priorities Geographic expansion Through investments in flagship products in high-growth areas Technological Innovation & Growth in specialties In existing businesses, extending products range and developing new usages and markets Consolidation in Essentials Following a policy of continuous improvement Managing the product portfolio 5

6 Delivering on a strong model Leverage and exploit synergies among businesses common success factors Selective leadership Global presence Global supply chain & sourcing Feedstock integration Energy Management Strong cost management Disciplined & ambitious use of cash Growing performances REBIT/employee (EUR) Selective leadership Main Products Europe World Soda ash 1 1 Hydrogen peroxide 1 1 Sodium bicarbonate 1 1 Caustic soda 2 3 6

7 Energy management : some examples 2006 Combined cyle Roselectra, Italy Conversion Conversion trona calcinors, U.S.A % Energy Exp. Group/sales Oil Gas US Gas Zeeb Elec D Membrane technology Replacing mercury cells Rosignano, Italy Electricity Exeltium consortium, France Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06 Q2/06 Q1/06 Q4/05 Q3/05 Q2/05 Q1/05 Q4/04 Q3/04 Q2/04 Q1/04 Q4/03 Q3/03 Q2/03 Q1/03 Av 2002 Steam Future - High efficiency boiler Devnya (2009) - Steam/heat recovery in Germany (2010) Renewable combustible - Biomass thermal power plant, Tavaux (2010) Q1/08 7

8 CAPEX allocation Medium term capital expenditures (incl. acquisitions) Maintenance Geographic expansion Soda ash Bulgaria +300kT/y Egypt (ongoing) acquisition of ASCC +130 kt/y Hydrogen peroxide HPPO projects : Belgium 230 kt/y Thailand 330 kt/y Electrochemistry Epicerol Thailand 100 kt/y Growth in specialties +320 M EUR sales 8

9 «Sodium Carbonate and derivated products : Strategic Minerals» Ms. C. Tahon General Manager of SBU Soda Ash 9

10 The story 1861 Industrialization of Sodium Carbonate process patented 1863 Solvay & Cie st Solvay Soda Ash factory (Couillet Belgium) 1865 : 1 st Phase - Rapid expansion in Europe and USA by building Factories Dombasle (1874), Berezniki & Donetz (1882), Syracuse (1884), Detroit (1897) 1916 more than 20 Solvay soda ash production sites in Europe & USA 1917 : 2 nd phase - downturn due to wars 1917 seizure of the Russian sites 1946 Yalta Seizure of 7 sites (E-Eu) 1958 : 3 rd phase - Consolidation 1995 : 4th phase - Expansion through sites expansions and acquisitions 1995 : Acquisition of Green River (USA) 1997 : Acquisition of Sodi (Bulgaria) 2003 : Acquisition of American Soda (USA) 2008 : Acquisition of ASCC (Egypt) - ongoing 10

11 SOLVAY SODIUM PRODUCTS CARBONATE SODIUM CARBONATE Derivated product an example : SODIUM BICARBONATE 11

12 Solvay Sodium Carbonate n 1 in the world, n 1 in Europe Main applications Glass Industry - Flat Glass Glass Industry - Container Glass Detergent Paper Industry 13% Flat Glass 12% 30% Container Glass Chemicals 15% Detergent Others 12 30% (in % of present sodium carbonate sales)

13 Market development Million Tons Offer* Offer* Demand** Availability for Export Europe 9,6 10,7 9,1 1,6 Nafta 11,8 12,6 8,0 4,6 China 21,9 28,1 27,8 0,3 India / Pakistan 3,1 4,1 3,4 0,7 South America 0,3 0,3 2,5-2,2 Asia / Pacific 0,9 1,1 4,8-3,7 FSU 3,9 4,6 4,6 0,0 MENA / Africa 2,5 5,0 4,8 0,2 Total 53,8 66,4 64,8 1,5 * Based on published nameplate capacities ** Solvay assumptions 13

14 Market landscape Business fundamentals currently good Increasing soda ash demand worldwide ~ + 4% > fast growth in emerging regions (Eastern Europe, CIS, Asia, Mercosur) Growth of derivatives of soda ash (e.g. bicarbonate) Soda Ash World Market (Mt/y) CAGR= 3,9%/y 88% H1/08 Market very tied due to -badweatherconditions worldwide - plants problems due to high production rates 0 80% Total Capacity (Mton/y) Demand (Mton/y) Operating rate (%) Source: CMAI 14

15 Our present market position 15

16 Our growth strategy (1) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 16

17 Positioning as top world producer Current operations USA = 30% of Solvay s total capacities (around 40% of Chemicals sales) Europe = 70% of Solvay s total capacities 17

18 Positioning as top world producer New capacities at existing sites e.g. Solvay Sodi (Bulgaria) : today s largest European sodium carbonate operation (1.2 Mt/y) Optimal access to large raw material resources Excellent logistics with direct connection to Black Sea via Port of Varna West Investment programs: EUR 50 M to expand capacity to 1.5 Mt/y: to support growth in the dynamic markets of Balkans, Community of Independent States (CIS), Mena EUR 70 M to upgrade the site s power supply 18 CIS+Baltic Soda Ash Consumption (Mt/y) 2,7 CAGR= 4,1%/y 3,6 4, Source: CMAI

19 Positioning as top world producer Geographical expansion of our production implantations 25,0 20,0 Soda Ash Consumption per Capita (kg/inhabitant) ,0 10,0 5,0 0,0 USA EU15 Europe China FSU Saudi Arabia MENA Brasil India 19

20 Positioning as top world producer Geographical expansion of our production implantations ASCC (Alexandria Sodium Carbonate Company) Privatization of Egyptian soda ash plant Alexandria-based Egyptian state-owned soda ash manufacturer Nameplate capacity : 130 kt/y Final auction on March 27, 2008 : Solvay : the preferred candidate for the acquisition of 80% of the company Relevant Egyptian regulatory process ongoing - Signature expected within the next months Expansion plan 20

21 Our growth strategy (2) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 21

22 Highly performing production facilities Integrated production facilities Production sites integrated for salt, limestone through quarries and salt/brine plants e.g.: Torrelavega (Spain) 2008 : start up of new quarry Reserves of 30 years of limestone Environmental protection management Environmental certifications for all sites 22

23 Highly performing production facilities Energy sources management Coke + 400% Challenges : Further optimize Coal + 225% - energy production - consumption Gas + >100% 23

24 Highly performing production facilities Energy management (1) Best available technologies programs - Co-production of steam and electricity in all plants (8 units) - New boilers multipurposes: e.g.: Devnya-Bulgaria modern fluid bed coal boiler - Power plants using alternative fuels e.g.: Bernburg - Germany municipal waste derivated fuel 24

25 Highly performing production facilities Energy management (2) Energy savings programs - Process optimisation through changes toward more performing production technologies e.g.: new equipments concept and design - Intensification of recycling of available thermal sources - Portofolio of diversified solid fuels (origins, qualities, types ) 25

26 Highly performing production facilities CO 2 emissions management Energy savings program to support CO 2 emissions reduction - Implementation of best available technologies (cogeneration) - Production process optimisation through changes toward more performing technologies CO 2 emissions reduction program Alternative fuels uses - New combustion units based on recycled fuels or biomass 26

27 Our growth strategy (3) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 27

28 Efficient, streamlined and networked supply chain operations e.g. Europe : Distribution network For Soda Ash Factory Warehouse New warehouse Extended set of warehouses Reach new geographical areas Improve global flexibility of plants Optimize logistic costs Innovative solutions in shipments 28

29 Our growth strategy (4) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 29

30 Development of new markets and new applications Fast growing applications serving new markets contributing to people well being increasing the efficient use of mineral resources Glass for High energy Performance buildings Glass for Photovoltaic cells Glass supports for Solar power plants AGC Flat Glass Europe LED lighting in glass Ore leaching Insulation for Passive houses 30 AGC Flat Glass Europe

31 SOLVAY SODIUM PRODUCTS CARBONATE SODIUM CARBONATE Derivated product an example : SODIUM BICARBONATE 31

32 SOLVAY SODIUM BICARBONATE Solvay Sodium Bicarbonate n 1 in the world, n 1 in Europe Detergent 7% Others (incl. Flue Gas Cleaning) 13 % Animal Feed 54% Pharmaceutical 12% Food Applications 14% 32 West European Market for Sodium Bicarbonate by end use estimation from publication «Trona Patch»

33 SOLVAY SODIUM BICARBONATE Market review Europe Growth of 6% to 8% in the next 5 years in various markets - Animal feed : 3% to 7% - Flue gas cleaning : ~ 9 % - Pharmacy : ~ 7% USA Development of new applications : - Animal feed - Flue gas cleaning World - Annual growth rate of 9-10 % 33

34 SOLVAY SODIUM BICARBONATE Our growth strategy (1) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 34

35 SOLVAY SODIUM BICARBONATE New capacities at existing sites Europe Strong presence with increases of capacities e.g.: - Germany, Spain and Portugal new capacities - Rosignano (Italy) construction of a new unit (+ 100 kt/y) by 2009 USA e.g. : Green River: development of 125 kt/y production of technical grade sodium bicarbonate : Solvair product for flue gas cleaning solutions 35

36 SOLVAY SODIUM BICARBONATE Our growth strategy (2) Positioning as top world producer in quality and volumes Highly performing production facilities aiming at optimizing chemical, economical and environmental performances Efficient, streamlined and networked supply chain operations for our customers Development of new markets and new applications 36

37 SOLVAY SODIUM BICARBONATE Development of new markets and applications Sodium Bicarbonate, a plenty of potential applications for people s well being Domestic uses Baking Powder Vegetable cleaning Vegetable cooking Utensils cleaning Whitening powder Deodorization Swimming Pool Water treatment Agribusiness Animal feed (Poultry, ruminants, swines) Crop protection Parasits treatment Vegetables / fruits protection 37

38 SOLVAY SODIUM BICARBONATE Development of new markets and applications Sodium Bicarbonate, a plenty of potential applications for people s well being Health care & cosmetics Haemodialysis Anti-allergen Parasits treatment Tooth paste Deodorant Skin Care Industrial uses Drilling muds Flue gas cleaning Leather treatment Paper manufacturing Water softening Plastic foaming Surface cleaning 38

39 SOLVAY SODIUM BICARBONATE Development of new markets and applications Flue gaz cleaning technologies : Application markets of Neutrec & Solvair Incineration municipal waste, hospital waste, special hazardous waste used tyres wastewater purification sludge animal waste Industries combustion units, urban or district heating secondary metal melting (aluminium, copper, lead, ) flat and container glass production ceramics, bricks, cement production 39

40 SOLVAY SODIUM BICARBONATE PRODUCTS CONCLUSION Sodium carbonate and derivated products : strategic minerals GDP data source : IMF Solvay GDP 40

41 THANK YOU! Q&As 41

42 To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes, all-in scenario of R&D projects and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "believes," "may," "could" "estimates," "intends", "goals", "targets", "objectives", "potential", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update any forward-looking statements"