Swiss speciality chemicals group Ciba (Basel / Switzerland; www.cibasc.com) has announced first half 2008 operating profits down 41% year-on-year at CHF 161m (EUR 99.4m) on sales 7% lower at CHF 3.09 bn. Operating profit in the company’s plastics additives business was down 48% year-on-year at CHF 83m in the first six months of 2008 on sales of CHF 1.03 bn, compared with CHF 1.08 bn in the same period of 2007.

The company said that it is reshaping its business to deliver more value. This includes establishing a joint venture in plastic additives to expand operational capacity in the Middle East to take advantage of rapid growth in the region. The reorganised group will embrace an “industry-focused” operating model – this will involve grouping all of the company’s plastics businesses, which currently comprise base polymers and polymer products in the plastic additives segment, along with pigments for plastics in coating effects, into one unit. Ciba said that announcements on these initiatives will be made in the next few weeks.

Ciba CEO Brendan Cummins said: “The half year results were unquestionably disappointing. We experienced intense margin pressure from the escalation of raw material and energy costs, which went up 10% in the second quarter alone, with the heaviest impact in April and May. However, by mid-June, we were able to offset these higher costs with sales prices increases and we are seeing further significant sales price increases coming through in July.” He anticipates the conditions going into the second half of 2008 will remain challenging.