Main activities in 2011
Market conditions for Borregaard Chemicals were generally favourable in 2011, with good demand and stable or rising prices for key product groups, particularly for speciality cellulose. However, the impact of this trend on profitability was limited by continued high energy and raw material prices and weaker foreign exchange rates. Production at the Sarpsborg plant was better than in 2010.
The company’s innovation projects were further developed during the year, supported to some extent by research funding from the EU and the Norwegian authorities. Work began on a large pilot plant for the manufacture of bioethanol and biochemicals from new raw materials, and a pilot plant for microfibrillar cellulose was almost completed. Furthermore, new market applications were developed for several product groups.
The business unit
Borregaard has one of the world’s most advanced biorefineries. Using timber as a raw material, the company manufactures a broad range of advanced biochemicals, biomaterials and biofuels that are sustainable alternatives to oil-based products. An attractive innovation portfolio strengthens this position. The company also holds interesting positions in the additives and fine chemicals segments. Borregaard is an international enterprise with production facilities and sales offices in the most important industrial markets.
Goals
- Further develop its biorefinery concept
- Generate new growth through increased specialisation and new products based on the company’s platform of expertise
- Improve its cost position
Strategy
Based on existing competence, Borregaard aims to create new growth in the biochemicals, biomaterials and biofuel segments. By commercialising and renewing its innovation portfolio, it will further increase its specialisation, strengthen its market position and lower its costs. The company will also achieve growth through new, higher added-value products and by further developing its unique biorefinery concept. Borregaard will further increase its competitiveness through continuous growth in productivity, with particular focus on the Sarpsborg plant.
More about Borregaard Chemicals in 2011
Borregaard Chemicals achieved significantly improved profit in 2011. More favourable market conditions in the chemicals area, particularly for speciality cellulose, were counteracted to some extent by high energy and raw material prices and a weakened net foreign currency situation.
Borregaard LignoTech is the world’s leading supplier of lignin-based binding and dispersing agents, with production in eight countries. Results in 2011 were slightly weaker than in 2010. Somewhat improved market conditions and higher volume were counteracted by higher costs and a stronger NOK exchange rate. The markets in Southern Europe and the Middle East were generally slow, especially for products for the construction industry, while there was growth in the USA, Latin America, Asia and Northern Europe.
Borregaard ChemCell is a leading European supplier of speciality cellulose for chemical applications, and a global leader in certain areas of application in the food, cosmetics, filter and construction industries. Profit improved significantly in 2011 due to the fact that higher selling prices in all product segments more than offset increased costs and less favourable exchange rates.
Borregaard’s ingredients and pharmaceuticals businesses supply advanced products that meet high quality and hygiene standards. Overall, the business area achieved a stronger result than in 2010, primarily due to structural adjustments and cost reductions in the fine chemicals business. Market conditions were relatively stable.
Products and Areas of Application
Lignin: Additives for use in concrete, ceramics, agricultural and fishery products, batteries and mining.
Speciality cellulose: Used in construction materials and in the manufacture of filters, food products, tablets, cosmetics, paint, varnish, plastics and textiles.
Bioethanol: is used in the pharmaceutical industry, paint, varnish, fuel and car-care products.
Vanillin product: For use in food, cosmetics, pharmaceutical industry and other selected niches products.
Pharmaceutical products: Intermediates for X-ray contrast media (diagnostics) and medicines.
*Operating profit before amortisation and other income and expenses.