The year has started off in line with expectations in all of Kemira's growth sectors. In the early months of the year, the Group's earnings are not yet expected to change from last year's - at least not considerably - though the full-year result is expected to exceed them clearly, said Tauno Pihlava, CEO, sizing up the Group's earnings outlook at Kemira Oyj's Annual General Meeting today, 3 April 2002.
Kemira is seeking to step up growth within chemicals for the pulp and paper industry, water treatment chemicals and paints. Apart from organic growth, the core businesses may be beefed up through acquisitions. Within pulp and paper chemicals as well as water treatment chemicals, the goal is to be in the top three worldwide, and the paints units are aiming to be among the leading companies in their main market areas in northern and eastern Europe.
Exploratory talks are being held with the aim of finding an industrial partner for the fertilizer business. Kemira plans to spin off its Agro business into an independent company in which it retains a minority holding.
Demand for pulp and paper chemicals in the first part of the year still reflects the recession in the customer sector. It is nevertheless believed that the business cycle will swing upwards in the second half of the year. The acquisition of Vinings of the USA has strengthened Kemira's position in the global pulp and paper chemicals market significantly: the company's geographical presence has been reinforced and it also offers an expanded palette of products and services.
There has been continued strong demand for water treatment chemicals. Similarly, within industrial chemicals the earnings trend is good, except for titanium dioxide pigments. A turn for the better within titanium dioxide products is expected some time soon because producers' price increase announcements anticipate an upswing in demand and prices in the industry. Full-year earnings of the chemicals business are expected to improve on the result a year earlier.
The market situation for paints in the early months of the year has matched expectations. The growth in the paints business is brisk in Russia, the Baltic countries and Poland. When, furthermore, the synergy benefits from combining the Alcro-Beckers functions with the rest of Kemira's paints business begin to kick in, Kemira Paints and Coatings' full-year result will likewise exceed last year's level.
The year started off well for the specialty fertilizer business. On the other hand, within nitrogen fertilizers, demand in continental Europe has not yet revived, contrary to expectations. After heavy rainfall and floods, the nutrient concentration of the soil is low, but nonetheless sales are sluggish, notably in the British Isles and elsewhere in continental Europe. All in all, Agro's earnings are nevertheless expected to come in above last year's because the cost cuts will begin to bear fruit, and the price of the main raw material, natural gas, has also fallen. Kemira Agro has, among other things, closed down overcapacity in the Netherlands and Denmark, continues boosting the efficiency of its distribution and logistics functions in Europe and that of its nitric acid production in Tertre in Belgium.
Kemira Oyj will publish its 3-month interim report on 6 May 2002 at 9.00 a.m. Helsinki time.
Today Kemira Oyj will issue a further press release on the resolutions passed at the Annual General Meeting.