The Specialty Polymers division of German chemical group Degussa (D-40474 Düssseldorf; www.degussa.com) has reported a 21% setback in EBIT to EUR 146m for 2003, with sales unchanged at EUR 1.3 bn. The group blames worldwide economic conditions, higher raw materials costs, the decline in the value of the US dollar and start-up costs for new production capacities for polyamide and methacrylate monomers for the downslide.

In the high performance polymers business unit, earnings also were affected by slack business in such key markets as automotive, textiles and domestic appliances. Price pressure – especially from China – buffeted the telecommunications sector, where Degussa manufactures speciality PBT for fibre optic applications. This, coupled with higher feedstock costs, has led to the mothballing of some production capacity. Talks are in progress with employees in performance polymers about cost-saving measures that could include reduction of working hours and pay, along with the phase-out of profit sharing schemes. Some 150 jobs are on the line, executives told PIE.

By contrast, business in polyamide 12 and related polymers is said to be developing well in some high-tech segments. As a reaction to booming demand from China for such PA 12 applications as fuel hoses, air brake systems for trucks and shoe soles for professional sport shoes, Degussa will consider building additional capacity in China. A decision is expected in one to two years.