Sales in local currencies up in Asia, Americas - Ciba
19 Aug '08
5 min read
Sales in local currencies up in Asia, Americas - slower in Europe : Sales of CHF 3,088 million (2007: CHF 3,308 million) were flat in local currencies and 7 percent lower in Swiss francs. Growth was strong in Asia, with good sales across the business, in particular double digit growth in lubricant additives and electronic materials. China itself was up 10 percent in local currencies.
Sales in the Americas were 1 percent higher over the same period in 2007 in local currencies, and 10 percent lower in Swiss francs, as a result of the much weakened US dollar. Growth in the Americas came through strongly in the water treatment business in NAFTA, as well as South America.
European sales were weaker than the previous year, 5 percent lower in local currencies and 7 percent lower in Swiss francs. There was growth in some areas of the plastics businesses, as well as in lubricant additives and water treatment, however, there were declines in paper as a result of weaker demand in the industry.
Gross profit margin of 26.8 percent (2007: 29.0 percent) was impacted by the high levels of raw material costs. Production costs were flat over the first half of 2007, despite a 10 percent increase in energy costs, reflecting the success of the lean manufacturing initiative, which is delivering considerable savings in the production network.
Raw material prices increased 8 percent (CHF 119 million) over the first half of 2007, with the strongest impact felt largely in April and May, where there were double digit increases in a number of areas of the business.
Sales contracts with some of the largest customers were concluded before the impact of heavy escalations in raw material costs took place and this added to the normal implementation lag between higher costs coming through and sales prices fully compensating. By mid June, however, increased sales prices had started to offset the higher costs and the margin erosion was stemmed. Significant increases in sales prices are now very visible in the first part of the third quarter, with a substantial increase from June to July.
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-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
