Kemira sales and profit down in 1Q09 - paper chemicals struggling

Kemira posted a first quarter pre-tax profit of EUR8 mio, down from EUR22 mio a year ago.  Sales fell from EUR684 million a year ago to EUR609 million.

Sales of pulp and paper chemicals declined from EUR247.7 mio a year ago to EUR225 mio and EBITDA fell 21% to EUR19.8 (8.8% of sales).  The reasons given for the poor performance were falling customer demand, especially in the 'traditional' markets of North America and Europe, linked to the global economic slow-down.  There was a positive currency effect of EUR2mio.

There was some mention of the cost saving projects which Kemira has undertaken such as temporary shout downs in production, closure of the AKD wax production in Vaasa, Finland (March 2009), in addition to the 6 production facilities which have been shut in North America in the last 6 years and the planned closure of the polymer production unit in Colombus, Ohio.

As the BASF acquisition of Ciba takes shape it will be interesting to see whether Kemira adapts its business model to gain an advantage - if Kemira wants to increase the size of its pulp and paper buiness to match that of the new BASF, there are some smaller specialist which could be acquired and help in the further, needed consolidation of the Europen paper chemicals industry.

Deatils of the Kemira performance in the first quarter of 2009 are available on their web site.