By Liz White, UT staffLemförde, Germany-While sales and profits for Elastogran Group rose in 2005, the group issued a "cautiously optimistic" forecast for 2006. Elastogran specifically referred to "limited polyetherol" capacities at BASF's sites at Antwerp, the Netherlands, and Schwarzheide, Germany, which it said would in turn affect turnover in its systems business. Sales for polyurethane specialist Elastogran rose by just under 18 per cent to Euro 1800 million in 2005, while income (EBIT) stood at Euros 115 million, 9 percent above the figure for 2004, said Elastogran in its 22 February results statement. Discussing the outlook for 2006. Elastogran cited only slightly improved macro-economic forecasts and also the polyetherol capacity bottlenecks for raw materials for polyurethane systems referred to above. Elastogran expects business in the European polyurethane market in 2006 to be at the same level as in 2005, and so predicts net sales and income at the same level as in 2005. A pre-condition for this, warned the PU specialist, is that "high raw material prices can be passed on to the customer" in sales prices. Elastogran, a BASF business, said it retained its high spending on research and development, at nearly Euros 27 million. The group added that since it has completed a number of major projects, investment in tangible assets for the year decreased to about Euros 11 million from Euros 21 million the previous year.Sales volumes rose only 3 percent compared to 2004, both in polyurethane base products and in systems. Higher raw materials prices, which had already increased significantly in 2004, were "gradually passed on to the market, particularly in the first half of 2005," said Elastogran. This allowed the net sales increase of nearly 18 per cent, significantly above the growth in sales volumes. Elastogran pointed out that in the second half of 2005, some improvement in raw materials prices-specifically in benzene-was neutralised by strongly increasing propylene prices and the impact of the exchange rate.Elastogran now has 1668 staff, a drop of nearly 100 over the previous year, at its 11 European sites. This reduction has arisen from restructuring, in which the Olching site was closed the business activities in Germany focused on the site at Lemförde. This headquarters site now employs 1198 (previous year1151). Recent acquisitions have seen Elastogran take a controlling interest in a polyurethane system house in South Africa and snap up Chemtura Corp.'s Witcothane PU systems operation, which specifically targets the shoe market. These acquisitions-a reaction to the movement of businesses into regions with a very good economic outlook-"strengthen the international competitiveness of the Elastogran Group thus securing jobs in Germany in the long term," the company's statement said. "