Kemira first-half results - tough times for pulp and paper chemicals

Kemira announced their first-half, 2008 results today - these are clearly troubled times for the paper chemicals giant, but they are not alone. Highlights for the Pulp and Paper business are (1H08):

• First-half sales of EUR 517.5 mio (down from 529.7 mio in 2007) - Kemira point to mill closures in Europe and North America for loss of sales with some effect of unfavourable currency exchange rates
  
• Operating profit 5% of sales (down from 8.7% in 2007) - Unable to increase sales prices sufficiently and compensate for the cost hikes - especially higher oil and energy-related costs
• There was an impact on cash-flow from the EU fine for operating a chlorate cartel (see earlier blog)
  

Kemira has made a commitment to paper chemicals and will no doubt be able to survive the current market climate. It is doubtful that they will, in the short term, participate in the future market consolidation as they are yet to effectively integrate their recent acquisitions.