Degussa examining sale of construction chemicals

By Liz White, UT staffDüsseldorf, Germany-Degussa AG announced 14 Dec that it has authorised its management board to examine selling the group's Construction Chemicals Division.Sales for this construction chemicals unit reached Euros 1788 million in 2004, with earnings (EBIT) of Euros 201 million. The business has nearly 7400 employees and claims to offer some 40 000 products worldwide. The business is split into admixtures-chemicals for concrete systems-and building systems, which covers flooring, coatings & facades and expansion joints. One speciality of this business is its range of polyurethane-based systems for coating, sealing and waterproofing, as well as the Conipur brand of multilayered complex polyurethane surfaces such as racing tracks. Degussa, with total 2004 sales of Euros 11200 million, and operating profits (EBIT) of Euros 965 million, claims to be "the global market leader in speciality chemicals. Only the day before this announcement, Degussa said it strategy is, "stepping up its pursuit of profitable growth, and streamlining its management organisation." No operational redundancies are planned in connection with these changes, which take effect 1 Jan 2006, said Degussa. Going forward, we are now positioned even closer to the market and leaner in the global specialty chemicals markets," said Prof Utz-Hellmuth Felcht, chairman of Degussa, in a company statement. It will aid the group's performance enhancement program-Degussa 2008-that will allow the group to achieve our demanding profitability and growth targets, Felcht added. As part of the recent changes, Degussa's management board will take on a "significantly more operational role," with two new members. And in future the five divisions will report directly to the management board, reinforcing the decentralised corporate structure. Degussa claims this will speed decision-making and further increase its flexibility in the market. Degussa will also cut its business units to 17 from 20 to 17, by integrating similar activities. Starting in 2006, Degussa will report in four segments: Technology Specialties, Construction Chemicals, Consumer Solutions and Specialty Materials. The group's recent examination of strategy "identified high-return businesses with growth potentials that have not yet been fully exploited," including anorganic specialties, special applications for coatings and adhesives, solutions for the cosmetics industry and high-performance plastics, Degussa added. Over the next few months, Degussa said, it will determine priorities for carefully and selectively expanding these activities and identify specific action needed to implement this growth strategy.The picture shows application of a Conipur polyurethane-based surface for track and field events at Berlin's Olympic stadium. This coat was later covered with a blue and white top coat-the colours of football league team Hertha BSC, which is based at the stadium."