By Liz White, UT editor
All of Elastogran's three polyurethanes businesses-basic products, systems and special elastomers-saw increased sales and earnings for 2006. And this was despite the effects of "historic highs of raw material prices," said the group.
"Capacity bottlenecks of individual raw materials for polyurethane systems," also had a negative effect on Elastogran's results, a 27 Feb statement from the BASF subsidiary said.
Elastogran Group net sales rose by just under 13 percent to Euros 2080 million, while income before tax increased a small extent in terms of percentage. Spending on research and development was again at a high level, the company said, but gave no figures.
With 1719 employees the Elastogran Group increased its workforce by three percent Europe-wide.
Elastogran said increased sales came from all market segments. Meanwhile raw material prices were significantly higher than in the previous year, and it proved impossible to pass them all on to the market, the company said.
In the second half, raw material prices "levelled off at an historic high," said Elastogran, adding that the strong Euro slightly relaxed the situation towards the end of the year.
During 2006, Elastogran bought a controlling interest in a South African Systems house CHC. Last week the group also announced its intention to buy Dutch systems operation, Polymer Chemical Co.
"Further establishments or acquisitions of Polyurethane systems houses are planned," the company revealed.
For the coming year, Elastogran said, the conditions continue to remain positive. In the light of the forecasts for steady economic growth in Europe, "Elastogran expects a slight increase in sales volumes for polyurethane base products and PU systems," in 2007 compared to 2006.
But the company added that, "Limited polyurethane production capacity … restricts sales volumes."
It will be vital for the enterprise to achieve "higher specific margins on average compared to past years," through "optimum pricing and cost transfer of raw material prices," Elastogran added, in its results statement. If this happens, 2007 net sales and income should slightly exceed the 2006 level.
Elastogran reiterated that the main challenge lies in the development of both "market and raw material prices," and of the Euro exchange rate against the dollar."