Annual Report 2008 English [PDF, 2.69 MB] - Tessenderlo Group

annual report 2008 

MAKING IT SUCCEED

MAKING IT WORK 

MAKING IT TOGETHER 

MAKING IT INSPIRING 

MAKING IT CONVINCING 

MAKING IT LASTING 

MAKING IT FIT


The group 

in a few figures 

The group in a few figures 

over 10 years (*) 

(millions EUR) 

Revenue 

Rebitda 

Rebit 

Non-recurring items 

Ebit 

Profit (+) / loss (-) 

Net cash flow 

Profit (+) / loss (-)/Revenue 

Rebit/Revenue 

Net cash flow/Revenue 

Capital Employed (CE) 

Working Capital 

Roce 

Capital expenditure (PP&E) 

Equity attributable to equity shareholders of the group 

Return on equity (ROE) 

Net financial liabilities 

Net financial liabilities/Equity (Gearing) 

Net financial liabilities/Rebitda 

Interest coverage 

Dividend paid 

Pay out ratio 

Headcount 

(*) A financial glossary is available on pg 182

Tessenderlo Group 

IFRS 

2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 

2,765.0 2,405.9 2,238.3 2,149.6 2,062.9 1,972.0 1,934.0 1,890.0 1,818.0 1,571.0 

344.7 261.6 188.4 191.8 220.8 204.0 259.0 230.0 251.0 213.0 

239.1 152.3 72.3 67.4 106.2 82.0 115.0 109.0 135.0 102.0 

- 26.9 35.1 - 76.9 - 8.2 - 25.0 

212.2 187.4 - 4.6 59.2 81.2 

140.4 128.7 - 24.3 35.1 53.6 43.0 71.0 65.0 90.0 70.0 

280.1 248.1 142.8 161.0 195.6 162.0 207.0 168.0 211.0 180.0 

5.1 5.3 -1.1 1.6 2.6 2.2 3.7 3.4 5.0 4.4 

8.6 6.3 3.2 3.1 5.1 4.2 5.9 5.8 7.4 6.5 

10.1 10.3 6.4 7.5 9.5 8.2 10.7 8.9 11.6 11.5 

1,282.7 1,118.9 1,181.3 1,258.0 1,166.0 1,136.0 1,141.0 1,259.0 1,114.0 1,013.0 

552.5 367.0 392.7 447.0 413.2 425.0 436.0 521.0 452.0 390.0 

18.6 13.6 6.1 5.4 9.1 7.2 10.1 8.7 12.1 10.1 

94.2 98.6 119.3 172.5 171.1 119.0 110.0 133.0 137.0 133.0 

900.0 800.2 709.5 774.3 755.5 756.0 758.0 836.0 796.0 729.0 

16.5 17.0 - 3.3 4.6 7.2 5.7 9.5 9.2 13.3 10.5 

294.6 243.8 411.0 428.9 351.4 339.0 303.0 341.0 242.0 209.0 

32.7 30.4 57.8 55.4 46.5 44.8 40.0 41.0 30.0 28.0 

0.9 0.9 2.2 2.2 1.6 1.7 1.2 1.5 1.0 1.0 

14.3 10.9 0.5 3.9 5.2 5.0 8.0 5.0 7.0 9.0 

36.9 35.0 33.3 32.7 32.7 30.7 30.6 30.5 30.3 26.8 

26.3 27.2 n/a 94.4 58.0 71.5 43.1 46.9 33.7 38.3 

8,237 8,121 8,124 8,123 8,181 8,223 7,934 7,849 7,087 6,847


Summary 

1 The group in a few figures 

Key figures p. 2 

Financial calendar p. 7 

2 Message from the chairman p. 10 

3 General presentation 

Company profile p. 14 

Strategy p. 16 

International presence p. 18 

Markets and Applications p. 22 

4 Activity Report 

Highlights of 2008 p. 26 

Chemicals p. 28 

Inorganics p. 30 

PVC/Chlor-alkali p. 35 

Plastics Converting p. 40 

Profiles p. 42 

Plastic pipe systems p. 46 

Compounds p. 50 

Specialities p. 54 

Fine chemicals p. 56 

Gelatin p. 60 

Natural derivatives p. 64 

1 

5 Commitments 

Human Resources p. 70 

Environment, Quality, Safety and Risk Management p. 74 

Corporate Governance p. 81 

6 Information for shareholders p. 92 

7 Financial report 

Annual accounts 2008 

- Consolidated Financial Report p. 100 

- Statutory Financial Report p. 168 

8 General information 

Production units p. 172 

Addresses of the plants and sales offices p. 175 

Index p. 181 

Financial Glossary p. 182


Tessenderlo Group in a few charts 

Revenue (millions EUR) 

 

 

 

 

 

 

IFRS 

2,765 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

Rebitda (millions EUR) 

2 

 

345 

 

 

IFRS 

 

 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


Profit (+) / loss (-) (millions EUR) 

 

140.5 

 

 

 

IFRS 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008


ROCE (%) Net financial liabilities/Equity (%) 

 

18.6 

 

IFRS 

 

 

IFRS 

 

 

 

33 

 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


Working capital / Revenue (%) Return on equity (%) 

3 

 

 

 

IFRS 

20.0 

 

 

16.5 

 

 

IFRS 

 

 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


Equity attributable to equity 

shareholders of the group 


Capital expenditure (PP&E) 


 

IFRS 

900 

 

IFRS 

 

 

 

 

 

94 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 



Synthetic consolidated balance sheet 

IFRS 

(millions EUR) 2008 % 2007 % 

Property, plant and equipment 652.0 677.8 

Goodwill 38.3 37.2 

Intangible assets 39.9 36.9 

Other non-current assets 79.9 71.9 

Non-current assets 810.1 45 823.8 49 

Inventories 473.7 339.9 

Trade and other receivables 474.9 425.9 

Cash and cash equivalents 53.5 93.6 

Current assets 1,002.1 55 859.4 51 

Non-current assets held for sale 0.7 0.0 

Assets 1,812.9 100 1,683.2 100 

4 

Issued capital and share premium 181.3 179.0 

Reserves 313.4 238.6 

Retained earnings 405.3 382.6 

Minority interests 2.0 2.0 

Equity 902.0 50 802.2 48 

Provisions and deferred taxes 171.9 146.7 

Financial liabilities 

- Non-current 96.7 122.6 

- Current 251.4 214.8 

Other liabilities 390.9 396.9 

Liabilities 910.9 50 881.0 52 

Equity and Liabilities 1,812.9 100 1,683.2 100 

Synthetic consolidated P&L account 

IFRS 

(millions EUR) 2008 2007 

Revenue 2,765.0 2,405.9 

Cost of sales -2,165.9 -1,873.6 

Gross profit 599.1 532.3 

Distribution expenses -144.6 -165.2 

Sales and marketing expenses -62.7 -77.4 

Administrative expenses -126.1 -125.2 

Other operating income/expenses -26.6 -12.2 

REBIT 239.1 152.3 

Non-recurring items -26.9 35.1 

EBIT 212.2 187.4 

Finance costs -21.6 -17.6 

Share of result of investements accounted for using the equity method 11.5 6.0 

Profit (+) / loss (-) before tax 202.1 175.8 

Income tax expense -61.7 -47.1 

Profit (+) / loss (-) for the period 140.4 128.7 

Attributable to : 

Equity holders of the group 140.5 128.9 

Minority interests -0.1 -0.2


Distribution of the revenue 2008 

Per business group 

Per destination 

Specialities 

21 % 

Chemicals 

51 % 

Rest of the world 

12 % 

USA 

11 % 

Europe 

77 % 

Plastics Converting 

28 % 

5 

Per country of production 

Per consumption market 

The Netherlands 

6 % 

Italy 

4 % Other 

5 % 

Belgium 

45 % 

Health & Hygiene 

14 % 

Household 

5 % 

Building Industry 

& Public Works 

32 % 

USA 

10 % 

Great Britain 

10 % 

France 

20 % 

Industry 

20 % 

Fertilisers & 

Animal Nutrition 

29 %


Key figures per business group 

Rebit 

Specialities 

13.6 % 


8.8 % 

Chemicals 

77.6 % 

Capital expenditures (PP&E) 

Headcount 

6 

Specialities 

33 % 

Chemicals 

33 % 

Specialities 

33 % 

Chemicals 

24 % 


34 % 


43 % 

Key figures per share 

EUR 2008 2007 

Basic earnings per share 

(Basic EPS) 

5.08 4.69 

Net cash flow per share 10.11 8.98 

Shareholders’ equity per 

share 

32.55 29.04 

Net dividend per normal 

share 

1.00 0.95 

Net dividend per normal 

share with VVPR strips 

1.13 1.08 

Number of shares 27,713,288 27,626,444 

 

 

 

 

 

 

Evolution of the net dividend 

per share (EUR) 

1999 

2000 

2001 

2002 

2003 

IFRS 

2004 

2005 

2006 

2007 

1.00 



Financial calendar 

Results 

Tessenderlo Group publishes quarterly releases of its consolidated results through the news 

media. The dates of the releases will be as follows: 

• 31 December 2008 results March 12 th , 2009 

• 1 st quarter 2009 results April 23 th , 2009 

• 1 st half-year 2009 results August 27 th , 2009 

• 3 rd quarter 2009 results November 5 th , 2009 

General Meeting 

• Approval of the financial statements 2008 June 2 nd , 2009 

• Approval of the financial statements 2009 June 1 st , 2010 

Dividend 

• Payment dividend 2008 June 9 th , 2009 

(coupon n° 72) 

7 

News releases: see our website www.tessenderlogroup.com under ‘News & Media’ - ‘News’. 

Contacts 

Shareholders’ service 

Jo VERSPECHT 

Tel.: +32 2 639 18 31 - e-mail: jo.verspecht@tessenderlo.com 

Investor relations 

Christian VREBOSCH (CFO) 

Tel.: +32 2 639 18 87 - e-mail: christian.vrebosch@tessenderlo.com 

Media relations 

Geert DUSAR 

Tel: +32 2 639 17 75 - e-mail: geert.dusar@tessenderlo.com

MAKING 

IT 

TOGETHER

To find out what our customers exactly need, we visit them. 

Together we find the answers to their specific questions. 

Not every type of feed phosphate is suitable for every 

breed. To determine exactly which products the farmers need, 

our sales representatives provide guidance for cattle feed 

manufacturers and cattle farmers. 

9


Message from the 

chairman 

Gérard Marchand 

Chairman 

10 

In 2008, the group encountered variations 

in the prices of its primary raw materials 

on a scale that had never seen before. The 

spectacular increases in the first half of the 

year reached historical records during the 

summer. After that prices declined until 

the end of the year, to return by the start of 

2009 to more normal price levels. 

This exceptional context was constantly 

taken into account in the management 

decisions of the group, which was therefore 

able not only to bear these increases, but 

even to raise its margins. 

The group thus recorded excellent results 

for 2008. Its revenue increased by around 

15 % and its recurring operating result by 

57 %. 

In practice, the improvement came entirely 

from the Chemicals business, and more 

particularly from products intended for 

the agricultural sector. Demand in this 

sector has remained very high, borne by 

the growth in the food needs of the world 

population. 

The group, one-third of whose activity is 

focused on these markets, historically in 

Europe but now also in the United States, 

therefore benefited from this excellent 

economic climate. 

The PVC & Alkalis activities recorded less 

impressive performances than those for 

2007, even if the sustained demand for 

alkali products significantly offset the 

impact of the decline in PVC.


The Specialities are also progressing. The 

good performance of gelatin, animal byproducts 

and the continued recovery of the 

organic chlorine derivatives compensated 

for a weak year in pharmaceutical 

intermediates. 

At the end of the year, Plastics Converting 

notably suffered from the difficulties 

of the construction sector. All building 

professions are affected, but it is once 

again that of profiles which has been 

hardest hit. 

harder-to-find credit with a balance sheet 

which is relatively unencumbered by debts. 

We are also continuing the cost-cutting 

efforts. The creation in the spring 2008 of 

a shared service centre for the accounting 

operations on the European level is one 

example of this. Naturally these efforts will 

continue in 2009. 

We are recording a net profit of 

140.5 million EUR, which is a new historical 

result for the group. 

11 

The events of 2008 and the economic crisis 

are not causing us to modify our strategy, 

which consists of having ultimately less 

than 30 % of commodities in our activities 

portfolio and retaining only the businesses 

where one can obtain at least a 12 % return 

on capital employed. 

The acquisitions of the year in the sector of 

plastics converting and in the specialities 

of our American subsidiary Tessenderlo 

Kerley Inc. are in conformity with this line. 

These good results make it possible for 

your Board of Directors to propose to the 

General Meeting to raise the dividend to 

1.00 EUR net per ordinary share, i.e. an 

increase of slightly more than 5 %. 

On behalf of the Board, I wish to thank all 

employees and managerial staff whose 

excellent work has enabled us to present 

these results. 

We are poised to seize the new growth 

opportunities which are certain to present 

themselves. However, the economic crisis 

has led us to be more selective, so as to get 

through this period of more expensive and 


Chairman

MAKING 

IT 

FIT

The products and services of Tessenderlo Group match the 

requirements of users perfectly. Whenever possible, we offer 

our customers a total solution. Like at Dyka Plastics. 

Our specialists use a plan to calculate which plastic pipes and 

fittings are necessary for water, gas and electricity. The next 

morning, everything is ready to be picked up at a Dyka sales 

point of choice, as close to the customer as possible. 

13


Company profile 

14 

Chemistry between 

three business groups 

Tessenderlo Group is a diversified, 

international group active in many areas of 

the chemical industry, plastics converting, 

gelatin, pharma and natural derivatives. 

The group is characterised by an extensive 

integration of its activities. 

Tessenderlo Group’s activities are divided 

into three business groups: 

• Chemicals with two business units; 

inorganics and pvc/chlor-alkali; 

• Plastics converting and its business 

units profiles, plastic pipe systems and 

compounds; 

• Specialities with its business units 

fine chemicals, gelatin and natural 

derivatives. 

To emphasise the cohesion of some of the 

group’s activities and to link them even 

better to the strategy of the group, the 

business groups will be reshuffeld as 

from 1 January 2009: 

• Chemicals will, in addition to sulfates, 

phosphates and PVC/chlor-alkali, include 

the organic chlorine derivatives coming 

from fine chemicals. Tessenderlo Kerley 

moves to the Specialities business group. 

• Plastics converting remains the same; 

• Specialities adds Tessenderlo Kerley to 

its portfolio. It also includes pharma, 

gelatin and products of natural origin. 

Present in everyday 

life 

Tessenderlo Group’s products form an 

integral part of our everyday lives and 

are used in various applications, from 

high-quality fertilisers and animal feed to 

medicine and car dashboards. A little bit 

of Tessenderlo Group can also be found 

in sweets, perfumes, batteries, blood


bags, water treatment products, washing 

powders and window profiles – just to 

mention a few examples. 

This explains the group’s motto: ‘Bringing 

chemistry to life’. 

A few figures 

• A worldwide personnel count of 

about 8,200. 

• More than 100 establishments in over 

20 countries. 

• Consolidated revenues of 2.8 billion EUR 

in 2008. 

• A net dividend per share set at 1.00 EUR 

in 2008 . 

Tessenderlo group as a 

market leader 

Tessenderlo Group occupies a position of 

leadership in a number of diverse markets. 

At the world level, the group is: 

• The largest producer of liquid 

sulphur-containing fertilisers, benzyl 

acetate, benzyl chloride, and alphahexylcinnamaldehyde; 

• The second largest supplier of 

phosphates for animal feed, potassium 

sulphate for specialised fertilisers and of 

triacetin; 

• The third largest manufacturer of highquality 

gelatins; 

• One of the leading suppliers of 

compounds for dashboard skins. 

At the European level the group is: 

• The number one producer of caustic 

potash; 

• The second largest supplier of ferric 

chloride 

• The fourth largest manufacturer of PVC 

compounds; 

• The fifth largest supplier of PVC. 

15


Tessenderlo Group’s 

strategy 

16 

At the general meeting of 5 June 2007 

Tessenderlo Group’s strategy for the 

coming years was modelled. 

This strategy can be summarised as 

follows: 

• Leading market positions in niche 

markets. 

• Strengthening and further 

diversification of a balanced and 

integrated activity portfolio. 

• Increase of the specialities share to 

70 % of the revenue by 2012 by: 

- further developing the Plastics 

Converting activities in Europe 

- strengthening the gelatin activity’s 

top-three position in the world 

- further developing the activities 

that combine customer service and 

by-product valorisation. 

• Continuously increase profitability. 

• A return on capital employed 

(ROCE) of minimum 12 % for all 

businesses by 2012. 

• Dividend policy aimed at stable 

growth.


Tessenderlo Group’s 

assets 

• World leadership and European 

leadership for the vast majority of 

its niche markets’ products; 

• A large and diversified product 

range; 

• The industrial integration of the 

various production processes, 

focusing on valorisation of byproducts, 

which in turn become raw 

materials for new products; 

• The orientation to products with a 

high added value and a non-cyclical 

market; 

• A sound financial situation; 

• Close to end-user markets and a 

strong development of distribution 

networks in Plastics Converting; 

• Annual investments in the amount 

of 100 million EUR average (excl. 

acquisitions) 

• The devotion of experienced and 

highly qualified employees; 

• Permanent focus on cost control in 

order to maximise profitability 

17


International presence 

59 Production units 

1 Canada 

11 United States of America 

1 Argentina 

4 Great Britain 

7 Belgium 

5 Netherlands 

2 Poland 

1 Germany 

22 France 

3 Italy 

18 

2 China 

Sales offices & 

distribution centres 

Belgium 

Chile 

China 

Czech Republic 

France 

Germany 

Great Britain 

Hong Kong 

Hungary 

Italy 

Lebanon 

Mexico 

Netherlands 

Peru 

Poland 

Romania 

Slovakia 

Spain 

Switzerland 

Turkey 

Canada 

1 

United States of America 

11 

Argentina 

1


4 22 7 5 1 2 3 

Great Britain France Belgium Netherlands Germany Poland Italy 

19 

China 

2



Tessenderlo Chemie NV 

WYMAR 

INTL. 

(BE) 

TESSENDERLO NL 

HOLDING BV 

(NL) 

TESSENDERLO 

HOLDING UK 

(GB) 

TEFIPAR 

(FR) 

DYNAPLAST 

EXTRUCO 

82 % (CA) 

PB LEINER 

ARGENTINA 

(AR) 

PB GELATINS 

UK (GB) 

SAV (FR) 

SAPLAST (FR) 

TC 

ROTTERDAM 

(NL) 

TESSENDERLO 

FINE CHEMICALS 

(GB) 

PC LOOS 

(FR) 

CALAIRE 

CHIMIE (FR) 

20 

DYKA 

BV 

(NL) 

John 

Davidson 

Pipes 

(GB) 

TESSENDERLO 

FINANCE NV 

(BE) 

EUROCELL 

(GB) 

PLASTIVAL 

(FR) 

SOTRA- 

SEPEREF (FR) 

CHEMILYL 

(FR) 

AKIOLIS 

GROUP (FR) 

LVM 

LIMBURG 

(NL) 

THERMOPLASTIQUES 

COUSIN-TESSIER 

(FR) 

FERSO 

50 % (FR) 

TESSENDERLO 

CHEMIE 

MAASTRICHT (NL) 

PROFEX 

(FR) 

TESSENDERLO 

SERVICES (FR) 

PB GELATINS 

GmbH (DE) 

PB GELATINS 

PINGYANG Co Ltd 

(CN) 

TESSENDERLO 

TRADING 

SHANGHAI (CN) 

NYLOPLAST 

EUROPE 

(NL)


TESSENDERLO 

PARTICIP (IT) 

TESSENDERLO 

USA (US) 

LVM 

(BE) 

TESSENDERLO 

ITALIA (IT) 

PB LEINER 

USA (US) 

IMMO 

WATRO 

(BE) 

FARCHEMIA 

(IT) 

CHELSEA B.P. 

(US) 

TESSENDERLO 

KERLEY (US) 

JUPITER 

SULPHUR 

50 % (US) 

ALKEMIN 

49 % (MX) 

TAILE (CN) 

TCT 

POLSKA 

(PL) 

21 

H Holding 

C 

K 

S 

D 

Chemicals 

Plastics converting 

Specialities 

Service company 

MPR 

SERVICES 

(US) 

TESSENDERLO 

AGROCHEM 

(TR) 

DYKA 

PLASTICS 

(BE) 

DYKA 

POLSKA 

(PL) 

ZEOLINE 

50 % (BE) 

TERELUX 

(LU) 

TCI 

(BE) 

T-POWER 

33 % 

(BE)


Markets and applications 

Tessenderlo Group: Bringing Chemistry to Life 

CONSTRUCTION INDUSTRY 

PVC and Compounds C P plastic pipe systems, door and window profiles, facade 

cladding, panelling, cable sleeves and cable insulation, 

floor covering, conservatories 

Zeolites C double-glazing 

AGRICULTURE 

22 

Ammonium, calcium and 

potassium thiosulphate 

C 

Animal fats S animal nutrition 

liquid fertilisers for large-scale cultivation 

Caustic potash C horticulture, fertilisers for irrigation systems 

Cereal based by-products S animal nutrition 

Crop protection products C plant health of speciality crops 

Dehydrated proteins S fertilisers, composting 

Feed phosphates C animal feed ingredients 

Glycine and derivatives S animal feed, agrochemicals 

Organic chlorine derivatives S advanced intermediates for agrochemicals 

Potassium sulphate C specialised fertilisers, which are particularly suited 

for vegetable, flower, fruit and tobacco growing and 

fertirrigation 

Sulphuric acid C fertilisers, crop protection products 

Triazone: slow release nitrogen 

fertilisers 

C 

speciality and broadacre crops 

INDUSTRY 

Acetates C antifreeze products, for e.g. runways 

Animal fats S biodiesel, lipochemistry, green energy (combustion) 

Benzyl alcohol S paints 

Caustic potash C batteries, oildrilling, biodiesel 

Caustic soda C aluminium, rayon, paper, pulp 

Dehydrated proteins S green energy 

Electrolysis products C photography, leather tanning, water treatment, mining


Ferric chloride C water treatment 

Gelatin S photographic paper and -film, paintballs, electro-plating 

Mono-ammonium phosphate C fire extinguisher, fire retardant 

Organic chlorine derivatives S paint, photography, coatings 

Potassium sulphate C plasterboards 

PVC and Compounds C P automotive industry: dashboards skins, airbag covers, 

seals, interior trim 

other: road safety cones, furniture, shoe soles, 

tarpaulins, cables, fencing systems, 

Sulphuric acid C batteries, car windows, billiard balls 

HEALTH AND HYGIENE 

Active pharmaceutical ingredients S medicines 

Caustic soda C detergents, soaps 

Chlorine C water disinfection, disinfectants, PVC 

Gelatin S capsules for e.g. drugs, skin cream, treatment of wounds 

Glycine S pharmaceutical products eg. buffer in isotonic solutions 

Organic chlorine derivatives S various pharmaceutical products for people, plants and 

animals, perfumes, shampoo, UV stabilisers 

Pharmaceutical intermediates S a wide range of medicines 

PVC and Compounds C P blood bags, infusion bags and tubes, catheters, gloves, 

bottles for shower and bath foam, toothbrush grip 

Sodium hypochlorite C sanitiser, water treatment, bleaching 

23 

HOUSEHOLD 

Animal fats S pet food 

Electrolysis products C detergents 

Dehydrated proteins S pet food 

Feed phosphates C pet food 

Gelatin S foodstuffs such as dairy and ‘light’ products, 

confectionery, energy bars and drinks 

Glycine S foodstuffs, aspics 

PVC and Compounds C P packaging films, tablecloths, shower curtains, credit 

cards, furniture, inflatable articles such as balls, 

swimming pools, boats, seals for refrigerators, tool 

handles. 

Caustic soda C detergents 

Zeolites C washing powders 

C Chemicals P Plastics Converting S Specialities

MAKING 

IT 

INSPIRING

Tessenderlo Group looks ahead. Every day we work on 

products that make life more comfortable and benefit the 

environment. These range from recyclable plastics for cars 

to low-calorie gelatins and environmental-friendly fertilisers. 

This is precisely why we want to inspire young people 

too. 

25


Highlights of 2008 

26 

March 

Eurocell, a UK subsidiary company 

of Tessenderlo Group and British 

market leader for the production and 

distribution of pvc profiles, acquires 

the distributor Peninsula Plastics and 

reinforces its position in the North West 

of England. 

April 

Eurocell acquires the assets of Sprint 

1233, formerly Plastmo Profiles Ltd 

(Northampton, UK). This acquisition 

will secure Eurocell’s position as the 

number one PVC-window profiles 

extruder in the UK, as well as 

complementing its existing product 

range 

Tessenderlo Group sets up a Shared 

Service Centre (SSC) in Leuven 

(Belgium) to centralise its accounting 

department at the European level. The 

aim of the SSC is to further optimise all 

its accounting processes and systems 

and standardise and harmonise them. 

The expansion of SSC will take place 

gradually between 2008 and 2011. 

September 

Tessenderlo Group announces 

changes in management, effective as 

from 1 January 2009. Frank Coenen 

is appointed Chief Operating Officer 

(COO) of Tessenderlo Group. He will 

lead the business groups Chemicals, 

Plastics Converting and Specialities, 

that respectively will be headed by 

Pol Deturck, Albert Vasseur and Jan 

Vandendriessche 

October 

Tessenderlo Group acquires the 

Dutch company Nyloplast Europe 

BV. Nyloplast manufactures 

large-diameter plastic fittings for 

pressureless pipe systems used for 

draining sewage and rain water. This


acquisition enables the Plastic Pipe 

Systems Business Unit to extend its 

range of products and services for total 

water management and to strengthen 

its position in Europe. 

November 

Caillaud, a French subsidiary company 

of Tessenderlo Group that specialises 

in the collection, processing and 

valorisation of organic by-products 

changes its name to Akiolis. This 

is with a view to the international 

development of its activities. 

December 

Eurocell Profiles Ltd (UK) acquires 

Cavalok Building Products. 

Cavalok manufactures window and door 

cavity closer systems made from postconsumer 

recycled PVC. 

is extended for 20 years. Tessenderlo 

Group has made a clear choice for a 

sustainable approach and will invest in 

additional environmental activities. 

T-Power, a joint venture between 

Tessenderlo Chemie NV, Siemens 

Project Ventures GmbH, and 

International Power plc, achieved 

financial close of its 420 MW CCGT 

(Combined Cycle Gas Turbine) power 

plant in Tessenderlo (Belgium). 

The power plant will commence 

operation in 2011 and will increase the 

competitiveness of the production plant 

in Tessenderlo. 

The phosphates activities are clustered 

in a new dedicated organisation named 

Aliphos. 

27 

The environmental permit for the 

Ham and Tessenderlo plant (Belgium)


Chemicals 

The Chemicals business group is comprised of two business units: 

Inorganics and Chlor-alkali/PVC. It is characterised by an integrated 

production process in which the various end-products and by-products are 

utilised internally in order to create maximum added value. The business 

group’s products are used in industry and agriculture and have applications 

in a large number of aspects of everyday life, from batteries and paper to 

animal nutrition, speciality fertilisers and water treatment. 

28 

2008 in a nutshell 

2008 was a record year for the Chemicals business group following a very successful 

year in 2007. The lower results in Chlor-alkali/PVC were amply compensated for by 

Inorganics. Despite the high raw material prices, among other things due to rising 

oil prices in the first three quarters, profitability was improved. The Inorganics 

business unit in particular was able to improve margins for agricultural products. 

For the Chlor-Alkali activity, the margins for caustic potash and caustic soda were 

higher than in 2007. However, this could not compensate for the decline in the PVC 

activity. The results of the latter were unsatisfactory in the last quarter. The new 

strategy whereby Tessenderlo Group and the Chemicals business group focus more 

on specialities and less on commodities, has resulted in excellent performance in the 

United States with Tessenderlo Kerley Inc. (TKI) recording strong figures.


Key figures 

2008 2007 

Revenue (millions EUR) 1,402 1,027 

REBIT (millions EUR) 197 83 

ROCE (%) 33 18 

Capital expenditures (PP&E) (millions EUR) 28 37 

Headcount 1,965 2,009 

Market leadership 

• The largest producer of liquid sulphurcontaining 

fertilisers (thiosulphates) at 

world level. 

• The second largest supplier in the world 

of phosphates for animal feed and of 

potassium sulphate for specialised 

fertilisers 

• The largest producer of caustic potash 

in Europe. 

• The second largest producer of ferric 

chloride at European level. 

29 

Revenue breakdown over 10 years 


1,500 

1,402 

1,200 

900 

IFRS 

600 

300 

0 

99 

00 

01 

02 

03 

04 

05 

06 

07 

08


Inorganics 

In 2008, the Inorganics business unit was confronted with a historical increase in raw 

material prices. However, these increases could be passed on to the market through 

higher sales prices. Margins for agricultural products were finally restored after 

several difficult years. Sales of potassium sulphate for fertilisers remained at the 

level of 2007, while demand for animal feed phosphates fell in the second half of the 

year. 

30 

Activities and products 

The Inorganics business unit operates in 

a variety of different markets. Potassium 

sulphate is a fertiliser that is extremely 

suited for use in dry areas and for 

highly sensitive crops such as flowers, 

vegetables, fruit, and tobacco. Tessenderlo 

Group invested mainly in potassium-based 

specialities for modern agriculture. 

Sulphur-based liquid fertilisers (including 

ammonium, potassium, calcium and 

magnesium thiosulphate) are used in 

North America as fertilisers for cereal and 

broad-acre crops, and for arboricultural 

and vegetable cultivation. Other sulphur 

derivatives are used for different industrial 

applications including mining, water and 

waste-water treatment and in a wide range 

of chemical processes. 

Mineral phosphates are used in the animal 

feed industry. The range of phosphate 

products is so diverse that Tessenderlo 

Group is able to offer the required quality 

for all kinds of feed applications. The 

optimal digestibility of the animal feed 

phosphates allows a perfect balance to be 

struck between the development of the 

animal and respect for the environment. 

Trends and facts in 2008 

Raw material prices continued to rise until 

September. In some cases, prices were 

300 % higher than in 2007. Tessenderlo 

Group succeeded in passing these price 

increases on to the market.


The range of 

fertilisers continues 

to evolve towards 

high-grade 

specialities 

Potassium sulphate volumes remained at 

their 2007 level. SoluPotasse®, 

a highly water-soluble potassium fertiliser, 

strengthened its position as world leader 

in irrigation fertilisation. GranuPotasse®, 

that is used extensively by fertiliser 

formulators, advanced strongly. 

This success is helping Tessenderlo Group 

to drive its product range towards highgrade 

specialities. 

Given that the majority of sales is in euros, 

the exchange rate evolution of the American 

dollar had little impact on the results. 

Sales of animal feed phosphates dropped 

across Europe, with a dramatic fall in 

Central Europe. Due to the low prices for 

pork, East European farmers have reduced 

their pig inventories by 30 %. The shortage 

of animal feed phosphates in the first 

quarter of 2008, combined with very high 

prices, has led to many feed producers to 

use the phytase enzyme alongside mineral 

phosphates. 

31


32 

Margins for 

agricultural products 

could be restored 

A closer look at 

Tessenderlo Kerley Inc. 

(US) 

Tessenderlo Kerley, Inc (TKI) and its 

business units in the United States 

achieved solid performance under very 

challenging conditions in the market place. 

Fertiliser volumes for 2008 were on an 

increase due to higher farm commodity 

prices in the first half of the year. TKI was 

able to maintain margins in 2008. 

The speciality fertiliser products,KTS® 

(potassium thiosulphate), N-Sure® and 

Trisert® slow release nitrogen products as 

well as CaTs® (calcium thiosulphate) have 

enjoyed a strong year in 2008. Demand has 

been strong in all cropping areas and in 

several cases exceeded supply in most of 

the broadacre and speciality crop areas. 

Fertilisers and crop 

protection products are 

doing very well in the US 

in 2008 

NovaSource®, TKI’s crop protection 

business unit, enjoyed a year of strong 

growth and above average profitability in 

2008 as the result of the Surround® and 

Sinbar® product acquisitions made in 

late 2007. In addition, good growth was 

experienced in its existing business range. 

In 2008, Tessenderlo Kerley Inc. acquired 

the assets of Agrochem in Turkey. It also 

acquired an interest in Wolf Mountain 

Products. 

MPR Services, Inc, TKI’s Solvent 

Services Business that supplies 

services to refineries for the treatment 

of flue gasses and solvents, continued its 

world-wide growth in both 

mobile services and permanently installed 

units. In addition to its international 

sales agents, MPR became the operating 

company for MPR Middle East WLL (MME), 

a joint venture between Gulf Technologies 

WLL and Tessenderlo NL Holding BV., 

based in the Kingdom of Bahrain. 

MME will service the energy industry in the 

GCC and Egypt. 

The TKI Refinery Services model is being 

pursued with refineries in the U.S.A. TKI 

has production plants linked to refineries 

to recover sulphur and other residuals that 

are in turn used to manufacture sulphurbased 

fertilisers.


Strategy and prospects 

for 2009 

The volumes for potassium sulphate 

are expected to fall below 2008 levels in 

Europe. Farmers have trouble obtaining 

credit from their banks and will not be able 

to place orders. 

Sales of SoluPotasse® will continue to 

rise. The growing shortage of water and 

agricultural land forces farmers to switch 

to drip irrigation that requires more watersoluble 

fertilisers. 

It is yet to be seen how the world 

financial markets will affect 

Tessenderlo Kerley and its business 

unit’s performance in 2009. It will 

be a challenging year, one that will 

be influenced by commodity pricing, 

availability of raw materials, declining 

world oil prices and the availability of 

water in the Western US for agriculture 

enterprises. TKI will continue to 

develop and extend its activity model of 

diversification and profitable growth by 

acquisitions and maintain its position as a 

lower cost producer in its major markets. 

Prices will probably remain stable or 

drop slightly. However, margins will be 

maintained. 

With the set up of a dedicated division for 

feed ingredients, Aliphos, Tessenderlo 

Group wants to optimise its production 

facilities for animal feed phosphates. 

Demand for animal feed is declining 

fast due to dropping meat consumption, 

the result of the worldwide economic 

crisis. Phosphate prices are expected to 

drop significantly compared to late 2008. 

Volumes will however be similar to 2008 

levels because more mineral calcium will 

again be used in animal feed instead of the 

phytase enzyme. 

After a strong 2008, Thio-Sul® (ammonium 

thiosulphate) fertiliser sales of TKI will 

come under pressure in the first quarter 

of 2009 due to carry-over inventory on the 

dealer/distributor level and further fear 

of prices moving downward in the market 

place. Lower farm commodity prices 

in relationship to input costs will be an 

influence in 2009. 

Allocation of speciality fertiliser products 

in the market place will continue through 

2009. The completion of the KTS® 

(potassium thiosulphate) and CaTs® 

(calcium thiosulphate) plant in Ham, 

Belgium in 2009 will help in alleviating a 

portion of the supply situation. TKI’s plant 

nutrients main challenge will be the 

33


availability of raw materials and the rising 

costs of these inputs. 

of the Specialities business group as from 

1 January 2009. 

34 

The challenges for the crop protection 

business unit in 2009 will be to expand 

the cropping applications for the new 

products; striving to become the least-cost 

producer in all of the NovaSource ® range 

and adding profitable new products to its 

existing business base. 

Unlike the other products of the Chemicals 

business group which can be considered as 

commodities, TKI products are specialised 

products for Tessenderlo Group and as 

such constitute an area of growth for the 

future. For this reason, financial reporting 

about TKI activities will be part 

Strategy for the 

inorganics business 

unit 

• Reduce production costs 

throughout the value chain as 

much as possible. 

• Seek alliances in order to 

strengthen our competitive 

position.


PVC / Chlor-Alkali 

The PVC activity has experienced a difficult year. Until the start of the autumn, 

sales volumes were at the same level as in 2007. Prices were generally high but 

with gradually decreasing margins. Demand and margins plummeted in the fourth 

quarter. 


Vinyl chloride monomer (VCM) is the main 

raw material in the production of polyvinyl 

chloride (PVC). VCM is produced from 

chlorine or hydrochloric acid and ethylene. 

Chlorine and hydrochloric acid are 

produced at the same site at Tessenderlo 

(Belgium) making road transport 

unnecessary. Ethylene is bought in 

externally and delivered via a specially 

designed secure and environmentallyfriendly 

pipeline network. 

Netherlands and in Northern France. 

These two plants are among the largest 

in Europe, with a total capacity of 480,000 

tonnes. 

PVC is one of the most versatile plastic 

resins in the world. It has a very extensive 

range of applications, ranging from plastic 

pipe systems, window and door profiles, 

flexible and hard films and sheathings for 

cables and wires. 

Trends and facts in 


35 

Chlorine is produced in the group’s 

electrolysis units, while hydrochloric 

acid is a by-product of the production of 

sulphates, allowing a unique integration of 

raw materials to be achieved. Tessenderlo 

Group’s annual VCM production capacity is 

550,000 tonnes. 

The polymerisation of VCM to PVC occurs 

at two locations, in the South of the 

The crisis in the 

construction and 

automotive industry has 

resulted in a sharp 

decline in PVC use 

During the first six months of the year, 

sales volumes were slightly higher than in 

2007. Margins deteriorated as a result of


the continued increase of ethylene prices 

that follow the evolution of oil prices. 

Demand quickly slowed down after the 

summer and the fourth quarter turned 

out to be a catastrophe. Sales dropped by 

an average of around 30 %, a reflection of 

the crisis in the most cyclically sensitive 

sectors, such as the construction and 

automotive industries. In addition, the 

plummeting of raw material prices at the 

end of the year and scarce credit resulted 

in a general reduction of stocks. 

Outlook for 2009 

has resulted in a sharp downturn of the 

construction industry in Eastern Europe as 

well. 

In the long term, PVC will continue to 

be a competitive commodity business. 

Therefore, Tessenderlo Group is continuing 

to focus on cost reduction, increased 

productivity and the improvement of 

quality and service. This is the only way 

for Tessenderlo Group to strengthen its 

position as a specialist in the field of 

suspension PVC. 

36 

Forecasts remain unfavourable as long as 

the general economic climate does not pick 

up. This seems to be improbable for 2009. 

Ethylene prices will probably be negotiated 

on a monthly basis instead of every quarter. 

This means PVC prices will fluctuate even 

more. Furthermore, imports from the 

United States and Asia, where production 

costs are lower, also threaten prices. 

Focus on low costs and 

high productivity to 

strengthen our market 

position 

Strategy for the PVC 

activity 

Forecasts for PVC 

for 2009 are not 

very bright 

The European PVC market has become 

a mature market with minimal growth 

potential. The current financial crisis 

• Keep costs throughout the value 

chain as low as possible. 

• Offer maximum added value 

with existing products and 

resources. 

• Pursue maximum productivity.


Chlor-Alkali / PVC 

In 2008, the profitability of the Chlor-Alkali activity was mainly determined by caustic 

soda and caustic potash. Although the margins of these products were higher than 

in the previous year, they were not sufficient to compensate for the deteriorating 

margins of the PVC activity. The project for the construction of an electricity power 

station by 2011 is on schedule. 


The electrolysis departments of 

Tessenderlo Group have an annual capacity 

of 400,000 tonnes of chlorine. This is 

mainly used internally for the production 

of vinyl chloride monomer (VCM), used to 

make polyvinyl chloride (PVC), and in fine 

chemicals. 

Caustic potash and caustic soda are 

released during the production of chlorine. 

Caustic potash is used in food processing, 

fertilisers, alkali batteries, defrosting 

products for airports, detergents and 

other processes within the chemical 

industry. Caustic soda is used for water 

purification and in the manufacture of 

soaps and detergents. In addition to these 

areas, there are many applications in the 

chemical, the aluminium and the paper 

industry. 

From these electrolysis basic products, 

various products are derived which are 

used in photography, the food sector, water 

purification and the extraction of ores. 

Ferric chloride and aluminium chloride 

are also produced in addition to the classic 

electrolysis products. Both products are 

indispensable in the fast-growing water 

purification sector. 



The prices of caustic potash rose in the 

second half of the year above the level 

of 2006-2007 due to the shortage of the 

product in the United States. European 

stocks were practically consistently below 

the long-term average. Demand remained 

high until the autumn but dropped sharply 

in the last two months of the year. 

37


The prices of caustic 

potash and caustic soda 

were higher than in 2007 

This had no effect on the margins for the 

derivatives bleach and ferric chloride. 

The prices for sodium sulphide lagged 

behind. 

From the third quarter onwards, the prices 

of caustic potash rose to unprecedented 

heights, the result of an acute and 

worldwide shortage of the raw material 

potassium chloride. This meant demand 

could not be fully met. 

The construction of 

our own electricity power 

plant in Tessenderlo 

has started 

38 

The margins of caustic soda as well as 

caustic potash both rose in comparison 

with 2007. 

The T-Power project has started for the 

construction of a 420 MW natural gas-fired 

electricity installation at the Tessenderlo


site. Completion is targeted by 2011, has 

started. The modern, high-performance 

power plant will result in a reduction of 

electricity transportation costs, and in 

addition, increase the competitiveness of 

the site in Tessenderlo. 


remains scarce and expensive. However, 

lower demand should soon restore the 

balance. 

The prices of caustic soda continued 

to rise at the beginning of 2009, and a 

considerable price reduction is unlikely in 

2009. 

The expansion of the ferric chloride 

capacity in Tessenderlo (Belgium) with 

30,000 tonnes has been delayed slightly 

and is sheduled for a spring start-up. This 

expansion will help meet the growing 

European demand for ferric chlorides 

mainly used as coagulants in the treatment 

of drinking water and the purification 

of wastewater. This investment also 

strengthens the position of Tessenderlo 

Group as the number two producer of ferric 

chlorides in Europe. 

Increased capacity 

shall strengthen our 

position on the ferric 

chloride market for water 

purification 

The cost price of electricity may rise once 

again. Currently, potassium chloride 

used for the production of caustic potash 

The margins for caustic potash are less 

predictable. They will mainly depend on 

the evolution of supply and the price of 

potassium chloride. 


Chlor-Alkali activity 

• Reduce costs and offer 

maximum added value 

with existing products and 

resources. 

• Maximise our competitive 

advantages. 

• Invest in specific projects with a 

high added-value potential. 

39



For over twenty years, Tessenderlo Group has resolutely pursued a 

downstream integration policy. With this goal in mind, the group has 

taken over several PVC converters holding numerous patents and 

registered trademarks in Europe and the United States. The products, 

comprising profiles and plastic pipe systems, are almost all intended for 

the construction and renovation sectors. Another activity that is closely 

linked to PVC processing is the production of compounds for the injection 

and extrusion market. The Plastics Converting business group is also 

responsible for distribution to end-users in a number of countries. This 

40 

enables it to improve its market position and profitability. 


Overall, 2008 was a difficult year for the Plastics Converting business group. Total 

sales fell by 3 %. Plastic Pipe Systems were initially affected less than Profiles and 

Compounds. However, the economic crisis also made its impact felt in this sector 

over the last quarter. The decline of the construction market which started in the 

United States in 2007, hit Great Britain and the European continent in the second half 

of 2008. Activities dropped while raw material prices remained high, in line with the 

cost of oil. Lower oil prices at the end of last year will only be felt in 2009, with lower 

raw material prices and higher margins.


Key figures 


Revenue (millions EUR) 776 816 


ROCE (%) 7 13 




• The number one producer of plastic 

pipe systems in Benelux and the third 

largest in France 

• The largest TPE compounder 

(thermoplastic elastomers) and 

the fourth largest producer of PVC 

compounds in Europe 

• British market leader for pvc-profiles 

• One of the leading suppliers of 

compounds for dasboards (Marvyflo®) 

at world level. 

41 



800 

600 

IFRS 

776 

400 

200 

0 

99 

00 

01 

02 

03 

04 

05 

06 

07 

08


Profiles 

The sharp decline of the construction market in 2007 spread across the whole of 

Europe in 2008. Sales in the Profiles business unit dropped as a result of this decline 

by 3 %. Lower sales were also accompanied by an increase of raw material prices 

which reduced profitability. 

42 


The Profiles business unit brings together 

the production of various PVC profiles for 

the construction industry, such as door, 

window and conservatory profiles, profiles 

for roofline, fences, the cladding of façades 

and various finishing products. 


The market slowed down substantially in 

Great Britain, especially in the second half 

of the year. Despite these unfavourable 

conditions, the Profiles business unit is 

continuing to invest in the development of 

its activities. 

This is reflected in the further growth of 

the distribution network that consisted 

of 90 depots at the end of the year, and a 

number of acquisitions: 

• Eurocell, a subsidiary of Tessenderlo 

Group and the British market leader 

in the production and distribution 

of PVC window and roofline profiles, 

acquired distributor Peninsula Plastics 

in March. Peninsula Plastics recorded a 

turnover of more than 3 million pounds 

and has distribution branches in the 

northwest of England. The locations 

complement the existing Eurocell 

branch network, resulting in the 

company strengthening its presence 

in this part of the country. 

• In April, Eurocell announced the 

acquisition of the assets of Sprint 

1233, formerly known as Plastmo 

Profiles Ltd. based in Northampton. 

The acquisition and the transfer of the 

activities to the Alfreton production 

site increase production efficiency and 

Eurocell’s market share.


• In December, Eurocell acquired 

Cavalok Building Products. Cavalok 

produces window and door cavity 

closer systems made from postconsumer 

recycled PVC. The range 

complements Eurocell’s existing 

products and serves to strengthen the 

company’s market position further. 

Substantial expansion 

of the product range and 

distribution network in 

Great Britain 

The product offering in Great Britain was 

further expanded to include a number 

of innovations. In 2008, the range of 

composite doors was expanded with new 

products that do extremely well in terms of 

safety as well as looks. The Thermologik 

window system was introduced on the 

market to meet the new standards for 

energy-friendly homes. Two new systems 

for rotating and vertically sliding windows 

were also launched. 

Thanks to the acquisitions and new 

products, sales – expressed in pound 

sterling - in the UK rose by over 9 %, 

despite a slowdown of the market. Due to 

high raw material prices, profitability was 

much lower than previous years. 

In Eastern and Central Europe, where the 

market also slowed down, we consciously 

chose to scale down activities in regions 

where margins are too low. From the third 

quarter, this was reflected by 10 % lower 

sales compared to the same period in 2007. 

Profitability was also considerably lower. 

43


44 

In this context, the business unit 

concentrated its activities on the European 

continent in Benelux and France. The 

introduction of new window systems and 

the improvement of existing products meet 

new market requirements with respect to 

durable and energy-efficient construction 

materials. 

New window systems 

meet the demand 

for durable and 

energy-efficient 

building 

The strategy of creating synergies between 

Wymar (Belgium) and Plastival (France) 

gained momentum during 2008. 

The situation in the United States was 

even less favourable than in 2007. The 

number of new-build and renovation 

projects alike dropped dramatically. With 

the introduction of new products, Chelsea 

Building Products (CBP) again succeeded 

in confining the sales decline to less than 

10 % while the market contracted overall 

by 20 %. Due to the dollar exchange 

rate, high raw material prices in the 

United States had a stronger impact on 

profitability than in Europe. 

In 2008, efforts were made in the 

development of composite windows, 

where metal is replaced with plastic. 

This important innovation has the major 

benefit that own materials can be used and 

purchasing of metal can be limited. 

Sales of Chelsea 

Building Products (US) 

fell less than the market 

average 

Wymar, which produces PVC profiles for 

windows and doors, as well as interior and 

exterior finishing systems, is continuing 

to develop new, lead-free systems. The 

objective in the long term is to phase out 

lead as a material to stabilise PVC. Thanks 

to the wider range of products, sales of 

these new environment-friendly systems 

are increasing while the share of the 

traditional systems is dropping. 

In Canada, an oil-producing country, the 

impact of the economic crisis was only 

felt at the end of the year, when oil prices 

began to drop. Slightly higher sales could 

not compensate for raw material price 

increases which meant profitability also 

decreased in this country. 

In 2008, the merger of the production units 

in Jonquière and Montreal on one site


in Montreal was completed. The site in 

Jonquière was closed. 

Innovations in 2008 included the 

development of new patio doors. These will 

be introduced onto the market in 2009. 

material prices following the drop in oil 

prices towards the end of 2008, will provide 

the leverage to restore margins. 

The synergies between Wymar and Plastival 

will also bear fruits from 2009 onwards. 


Due to the worldwide economic 

uncertainty, it is very difficult to make 

predictions. Improvements in the 

construction sector are not predicted for 

the immediate future. Low margin levels 

in Central and Eastern Europe should bring 

Tessenderlo Group to reveiw its position in 

these markets. 

The development 

of new products 

continues 

To meet these challenges, the Profiles 

business unit will adjust its production 

capacity to market conditions where 

necessary. In the United States and Great 

Britain, the development of new products 

will continue. The distribution network in 

Great Britain will also be expanded further. 


Profiles business unit 

• Increase the profitability of 

the European continent region 

through operational excellence 

and synergies between the 

production units. 

• Expand and improve the 

distribution network in Great 

Britain to obtain further growth 

and higher profitability. 

• Continue to expand the product 

range in the United States 

and Canada, and increase 

profitability by maximising 

the synergies between the 

production units. 

45 

The focus in 2009 will be on increasing 

profitability. In this respect, lower raw


Plastic Pipe Systems 

The Plastic Pipe Systems business unit succeeded in limiting the drop in sales 

compared to 2008, despite the weak economic cycle. A slight increase during the 

first three quarters could not fully compensate the decline in the fourth quarter. 

Profitability fell slightly due to high raw material prices which could not be passed on 

to the market swiftly enough. 

46 


The Plastic Pipe Systems business unit 

produces pipes and fittings for water 

supply and drainage systems, and pipe 

systems for gas, telecommunications and 

other applications. The raw materials are 

PVC, polyethylene, and polypropylene. 


The business unit continued its strategic 

growth, based on the two known pillars: 

geographic expansion and a wider product 

range, especially in the field of water 

management. 

Geographic expansion 

and a wider product 

range continue to be 

the main growth pillars 

In this respect, an important acquisition 

was made in October. Tessenderlo Group 

acquired Nyloplast Europe BV, a subsidiary 

of Nyloplast NV. The Dutch company 

Nyloplast Europe BV in ’s Gravendeel 

produces plastic fittings for pressureless 

piping systems in a large diameter for the 

European market. The systems are used


for draining sewage and rainwater. This 

major addition to the product range of 

special fittings strengthens the position of 

the Plastics Piping Systems business unit 

in Europe. 

With regard to Benelux, sales at Dyka 

Belgium to the construction and public 

works sectors rose by 4 %, despite a 

decline of gas-related activities. These 

favourable results can be explained by the 

broadening of the product range. 

Dyka sales in 

Belgium rose 

by 4 % despite 

the crisis 

In The Netherlands, activities were 

maintained at the satisfactory level of 2007 

but profitability fell slightly. The product 

offering was expanded here too. Services 

to customers were also improved by 

developing e-business and adapting the 

sales network. Specifically, a number of 

depots were transferred to more accessible 

locations and opening hours were adapted 

to the customers’ requirements. 

Conditions in France were extremely 

unfavourable. While the situation in the 

beginning of the year was more or less 

respectable, the market plummeted in 

the second half of the year. This had an 

extremely negative impact on sales as well 

as profitability. 

The market in Great Britain also 

experienced the impact of the economic 

crisis. However, John Davidson Pipes (JDP) 

was able to maintain sales at the 2007 level 

in pound sterling. Despite the slight decline 

in profitability, the situation in Great Britain 

continues to remain favourable. 

Strong growth of 

activities in Central and 

Eastern Europe 

This also applies to the situation in Poland. 

Operating out of the production units in 

Poland, activities in Central and Eastern 

Europe were able to be developed further, 

thanks to higher product supply and a 

larger distribution network. At the current 

time, there are 13 depots in Poland, 3 

in the Czech Republic and 1 in Slovakia. 

47


Sales rose by 20 % and profitability also 

increased, despite higher raw material 

prices. For Plastic Pipe Systems, this 

region has the advantage that it is less 

subject to the worldwide crisis than 

Western Europe. 


The influence of the recession on the 

construction and public works sectors 

is difficult to forecast. The impact on 

the Plastic Pipe ystems is expected 

to be less due to the strong focus on 

water management and interest in new 

developments. The Plastic Pipe Systems 

business unit will therefore continue its 

trusted growth strategy as planned. 

Furthermore, the acquisition of Nyloplast 

Europe BV will contribute in full to our 

results from 2009 onwards. 

Innovating 

systems available 

in all countries 

from 2009 

48


The so-called biaxially oriented pipe 

systems, which are produced by Sotra- 

Seperef in France, have firmly established 

themselves on the French market. They 

will also be available in other countries 

from 2009. The production process for this 

type of piping systems requires that the 

molecular structure of PVC is modified in 

order to improve the mechanical properties 

of the pipe. In particular, a biaxially 

oriented pipe system withstands a higher 

internal pressure than a normal PVC pipe 

with the same wall thickness. This makes 

it possible to reduce the amount of raw 

materials required. 

Polyethylene pipe systems for geothermal 

applications is another innovative product 

that performs well on the French market. 

These will also be available in other 

countries from 2009. 

Dyka Rainclean, a new high-performance 

system for the temporary collection and 

storage of rainwater will be introduced in 

2009. It filters and treats rainwater that is 

recovered from roads and car parks, before 

draining into the ground. 

In order to offer optimal service in the 

field of water management, the team 

that performs the necessary calculations 

for customers and develops water 

management systems has been expanded. 

Important steps were made in research 

and development to design new lead-free 

canalisation systems. Practically no lead is 

currently used to stabelise PVC. 



business unit 

• Further expand the distribution 

network and improve customer 

service. 

• Offer complete systems 

whenever possible by expanding 

the product range. 

• Maximise synergies between 

the production units. 

• Strengthen our presence and 

growth in the Central and 

Eastern European markets. 

49


Compounds 

Like the other activities in the Plastics Converting business group, Compounds 

also suffered in 2008 from the slowdown in the construction activity. Moreover, this 

business unit also suffered the impact of lower car sales. PVC compounds were hit 

the worst. The thermoplastic elastomers were also subject to the crisis. However, 

sales to the construction sector and the automotive industry rose. 

50 


The Compounds business unit produces a 

variety of ready-to-use PVC mixtures and 

mixtures of thermoplastic elastomers. 

These are mainly intended for the injection 

and extrusion markets, with applications 

in the construction industry (roller 

blinds, façade cladding, window fittings), 

the automotive sector (airbag covers, 

dashboard skins, interior trims and sealing 

systems) and the market for consumer 

goods (handles for household appliances, 

pens and toothbrushes). 


With regard to PVC compounds, sales 

volumes dropped by more than 10 %. A 

first explanation is the slowdown in the 

construction sector, but high raw material 

prices also played a role. Furthermore, 

demand fell as a result of consolidation 

within the companies that process the 

compounds. 

Lower demand and 

higher raw material 

prices have an adverse 

effect on margins for 

PVC compounds 

Lower sales volumes and increased 

supply in the market resulted in narrower 

margins. Efforts to restore them inevitably 

had a negative impact on sales volumes. 

Saplast (France) suffered the most from 

this, both on the home market and in 

export countries. 

The margins for plasticised PVC 

compounds were under even more


pressure than those for non-plasticised. 

Prices of softening agents used in these 

products rose sharply during 2008. 

The number of applications of 

thermoplastic elastomers (TPEs) 

continued to rise despite the economic 

context affecting this activity too. However, 

TCT Polska (Poland) and Thermoplastiques 

Cousin-Tessier (France) managed to 

increase sales by 5 % in 2008, both in 

the construction sector as well as the 

automotive industry. 

Number of 

TPE applications 

increases thanks to 

innovation 

On the other hand, the profitability of this 

activity was lower as a result of higher raw 

material prices. These could only be passed 

on in higher sales prices towards the end of 

the year. 

An important new compound was 

introduced in 2008 to replace polyurethane 

for the covering of car steering wheels. 

Marvyflo®, a compound intended for 

dashboards, was confronted with higher 

raw material prices and a drop in demand. 

The higher raw material prices could only 

be charged to the market during the second 

half of the year. In addition, the separate 

management team for Marvyflo® which 

was created in 2007, was able to improve 

industrial performance and customers 

service. 

51



The expectations for the PVC compounds 

market are not very favourable. There is 

no indication that any of these sectors 

will improve in the near future, and 

especially not in the construction industry. 

These activities are faced with two major 

challenges. Firstly, to increase margins 

to an acceptable level as a result of the 

decreasing raw material prices. Secondly, 

the production structures must be adjusted 

to the lower volumes and the future 

evolution of the market. 

Production structures 

for PVC compounds 

must be adjusted to 

lower demand 

Margins are also a major concern for the 

thermoplastic elastomers. It is expected 

that they will reach their normal level 

in 2009, considering the higher sales 

prices and the lower raw material prices. 

The impact of the economic crisis will 

52


undoubtedly be felt. However, lower 

volumes will be avoided thanks to several 

new applications. The compounds listed 

above for covering car steering wheels and 

a number of developments in the sealants 

sector are examples. 

A new range of products will be introduced 

in 2009, based on the Dow Chemical’s 

‘Infuse’ polymers which Tessenderlo 

Group is producing under licence for the 

European market. 

Marvyflo® is counting 

on interest from the 

automotive sector, 

also in China 

looks promising, with a growing share 

of the dashboard skins market. In 2009, 

Tessenderlo Group hopes to considerably 

increase its sales to the automotive 

industry in China. Although this sector 

is currently experiencing difficulties, the 

growth prospects are still quite attractive. 


Compounds business 

unit 

• Reduce costs by producing 

as effectively as possible and 

through operational excellence. 

53 

Specifically for Marvyflo®, increased 

demand from the automotive industry 

is key. Currently, preparations are being 

made to have Marvyflo®, certified for 

new car models that will be marketed 

in the near future. Although this activity 

will decrease slightly in 2009 due to the 

contracting automotive market, the future 

• Focus on speciality compounds. 

• Further strengthen our 

presence in the automotive 

industry by increasing our 

presence in the United States 

and especially Asia.


Specialities 

The Specialities business group consists of a number of diverse activities which 

differ by the added value that they create. The Fine Chemicals business unit 

deals partially with raw materials that are produced by Tessenderlo Group 

itself. These raw materials are transformed into specialist products for the 

agro-chemical, pharmaceutical and perfume industries. The Gelatin business 

unit turns the skins and bones of cattle and pigs into high-quality gelatin 

for use in the food and pharmaceutical industries. The Natural Derivatives 

business unit processes animal and vegetable by-products for use as raw 

materials in pet food and in the soap industry. 

54 


The Fine Chemicals business unit did not perform so well in 2008. While the 

operating result of organic chlorine derivatives was satisfactory, the intermediates 

and active ingredients for the pharmaceutical industry performed less favourably. On 

the other hand, the Gelatin business unit had an excellent year. Despite the economic 

crisis, demand for gelatin continues to grow, in part as a result of new applications 

and developments. The Natural Derivatives business unit recorded a satisfactory 

year. In the quest for new activities of a high added value, further diversification into 

the valorising by-products based on cereal crops was initiated.


Key figures 


Revenue (millions EUR) 587 563 


ROCE (%) 10 10 




• The largest producer of benzyl 

acetate, benzyl chloride, alphahexylcinnamaldehyde 

at world level 

• The number two producer of benzyl 

alcohol worldwide 

• The third largest manufacturer of highquality 

gelatins worldwide 

55 



600 

500 

400 

300 

200 

100 

0 

IFRS 

587 

99 

00 

01 

02 

03 

04 

05 

06 

07 

08


Fine Chemicals 

The intermediates and active ingredients for the pharmaceutical industry did not 

perform so well in 2008. In addition, contrary to expectations, the ‘organic chlorine 

derivates’ activity was unable to sufficiently sustain the positive trend of 2007. The 

Fine Chemicals business unit was hardest hit by the impact of the weak dollar. The 

competitive loss and the lower margins which were the result of this in the first half 

of the year were compensated in the second half of the year. 

56 


A first segment comprises the 

manufacturing of intermediates and active 

pharmaceutical ingredients. The business 

unit is the preferred supplier to important 

international pharmaceutical companies. 

Tessenderlo Group’s glycine and glycine 

derivates mainly have applications in the 

pharmaceutical industry. 

The second segment comprises organic 

chlorine derivatives, whose production is 

mostly based on toluene combined with 

chlorine produced by Tessenderlo Group 

itself. Toluene derivatives are produced 

for customers in the agro-chemical, 

pharmaceutical and perfume industries. 

Close cooperation between the various 

Tessenderlo Group units makes it possible 

to work in a highly flexible manner 

1. Intermediates and active 

ingredients for the 

pharmaceutical industry 


The results for the intermediates and 

active ingredients for the pharmaceutical 

industry are lower than in 2007. However, 

these activities performed much better 

than planned in the first half of 2008 

because a number of customers ordered 

higher quantities than initially planned. On 

the other hand, demand in the second half 

of the year was lower for this very reason. 

Furthermore, many customers delayed


their purchases in view of the economic 

situation. 

Tessenderlo Group is committed to 

providing quality on a continuous basis 

to ensure that its products meet the 

standards and guidelines in its various 

markets. Within this context, the sites in 

Italy and France were audited in 2008 by 

the Pharmaceutical and Medical Devices 

Agency (PMDA) of the Japanese Ministry 

of Health. The PMDA inspections are 

known to be the strictest in the world. The 

outcome of these audits was excellent 

- just like the other audits performed in 

2008. 

With regard to food safety, all current 

studies concerning HACCP (Hazard 

Analysis Critical Control Points) 

were completed at the Belgian site in 

Tessenderlo. 

Strict and successful 

audits confirm quality 

guarantee 

2008. In the beginning of the year, imports 

from China of glycine for the manufacture 

of additives for food and pet feed came to 

a standstill. This meant that Tessenderlo 

Group was able to produce large volumes 

of glycine, and sales doubled in comparison 

with the same period in 2007. 

The business poured further investments 

in the optimal treatment of waste flows. 

Specifically, a number of incineration 

installations were renovated or improved. 

Focus on waste 

treatment is key 

in investment 

programme 

Due to increasing demand, the Farchemia 

site in Italy has taken a new production unit 

for benzoyl peroxide into service. Benzoyl 

peroxide is used in the pharmaceutical 

industry to produce ointments to treat acne 

for example. 

57 

The sale of glycine for pharmaceutical 

applications – of which Tessenderlo Group 

is the last remaining manufacturer in 

Europe – was overall at a normal level in 


The expiry of the patent protection for 

a very successful drug will cause sales 

volumes to drop considerably in 2009.


The good news is that a number of other 

active ingredients have been in the 

development pipeline since 2007 and 

2008. These products will not be able 

to compensate for the decline in 2009. 

However, they do offer good prospects 

from 2010 

and the British pound during the first 

half of the year. This resulted in lower 

competitiveness and margins. Raw 

material prices were also unpredictable. 

In a market with ample supply, these 

price increases could not be passed on 

completely to customers. 

58 

Products in the 

development portfolio 

can compensate for 

patent loss as of 2010 

In the meantime, Tessenderlo Group will 

continue to promote itself as a company 

that is not only strong in the field of 

research and development, but can also 

offer its customers pilot capacity. As such, 

the company can guarantee quality as well 

supply commitments. 

2. Organic chlorine derivatives 


While 2007 saw a revival of the ‘organic 

chlorine derivatives’ activity, this positive 

trend could not be benefitted from 

sufficiently in 2008. 

Same as the intermediates for the 

pharmaceutical industry, organic chlorine 

derivatives also suffered from the volatile 

exchange rates of the American dollar 

Volatile exchange rates 

and raw material 

prices had an adverse 

effect on competitiveness 

and margins 

The situation improved initially in the 

second half of the year. Sales prices and 

margins rose. However, demand for all 

products dropped drastically in December. 

With regard to investments in 2008, the 

site in Pieve (Italy) decided that one of the 

two hydroelectric power stations will be 

renovated. Besides a slight increase of the 

power capacity, the major advantage is 

the fact that the company will obtain green 

energy certificates for this investment. 

Works are scheduled to begin in 2009 

and will be carried out during the winter 

months for three years, in order to reduce 

interruptions in manufacturing to a 

minimum. 

Contrary to earlier announcements 

made as part of the industrial plan for


the company, the electrolysis will not be 

discontinued in Pieve. Sufficient sales 

have materialised in the meantime for 

the electrolysis products, in line with the 

available capacity. 

However, the production of 

chlorobenzenes will be discontinued as 

announced but this will be later than 

initially planned. An extra investment for 

the production of synthetic hydrochloric 

acid will be implemented first, as decided 

in 2008. The production of chlorobenzene 

can then be discontinued at the end of 

2009 or the beginning of 2010. 

Improvement of cost 

structure should not 

influence productivity 

and capacity 


Competition from China and India is 

expected to increase in all areas, from basic 

chemicals to the advanced pharmaceutical 

intermediates. In view of the economic 

situation and the fluctuating raw material 

prices, it is impossible to make any 

predictions for the future. 

However, next year we shall continue to 

work towards improving the cost structure 

but without affecting productivity or 

production capacity. 

The products of the Organic Chlorine 

Derivates business unit have evolved to 

become commodity products and are now 

more closely related to the products, the 

activities and the strategy of the Chemicals 

business group. As such, they will be part 

of the latter as from 1 January 2009. 

Strategy for the Fine 

Chemicals business 

unit 

• Intermediates and active 

ingredients for the 

pharmaceutical industry 

Strengthen the position as 

a supplier of intermediates 

and active ingredients for the 

pharmaceutical industry. 

• Organic chlorine derivatives 

Reduce the cost structure 

throughout the entire value 

chain and maximise added 

value in order to increase 

profitability. 

Consolidate the activities and 

integrate them in the Chemicals 

business group as from 2009. 

59


Gelatin 

2008 was another outstanding year for the Gelatin business unit, despite the 

worldwide economic downturn in the second half of the year. The results rose 

sharply. The reversal that began in 2007 continued in this sector. This positive trend 

was strengthened by the continued growth of the demand for gelatin. 

60 


The Gelatin business unit produces a wide 

range of quality gelatins based on the 

bones and skin of pigs and cattle. About 

two thirds of the gelatin is intended for 

the food industry. Gelatine is a gelling 

agent and an important source of protein, 

and it contains no cholesterol, fat or 

carbohydrates. It is also converted into 

specific foodstuffs for diabetics and 

products with a low glycaemic index, and 

it is produced for the pharmaceutical 

industry (capsules) and a wide range 

of technical applications (such as 

photography). 

good prices for the by-products fats and 

phosphates. In the beginning of the year, 

sales prices of gelatin dropped due to 

ample market supply. The second half of 

the year was characterised by a shortage 

of rind as a raw material and this resulted 

in lower production levels in Europe. This 

resulted in a lower supply of rind gelatin on 

the market with prices gradually rising and 

payment terms tightening. 

Demand for 

gelatin rose 

despite the 

economic crisis 


The results of the Gelatin business unit 

rose by 20 % in comparison with 2007. 

This growth was mainly a result of the 

At the same time, demand in various 

markets evolved favourably. The estimated 

world production output grows by around 

4 % each year.


• In the new economies, including China, 

the use of gelatin in the food sector 

continues to rise. The use of gelatin in 

confectionery, which was initially only a 

European and American phenomenon, 

is now more widespread in Asia too. 

technical assistance for the production 

and commercial activities, other market 

segments could be approached for the 

gelatins of the Chinese production unit, 

such as the food sector and capsules for 

the pharmaceutical industry. 

• Demand from the pharmaceutical 

industry continues to grow due to the 

gradual aging of the population. 

• The impact of digital photography 

in the market for classic silver 

systems for film has been dealt 

with in the meantime. This is being 

compensated by the growing demand 

for photographic paper, although the 

quality requirements of the gelatin are 

lower for these applications. 

Our American sites also experienced the 

shortage of rind in the second half of the 

year, but to a lesser extent than in Europe. 

Lower production levels and their impact 

on sales prices were less significant there. 

For the joint venture in China, further 

major efforts were made to improve 

the quality of the produced gelatin. This 

resulted in higher sales prices. Although 

the results for the whole year are still 

negative, positive figures were recorded 

in the fourth quarter. Thanks to the 

Chinese site will be 

break-even in 2009. 

Quality improvement 

opens new markets 

Research into new applications and 

product development continued in 2008. 

• The important role that gelatin plays 

to reduce calories, especially when 

combined with lower fat use, resulted 

in a number of new applications in the 

food industry, such as meat and cheese 

production, and bakery applications. 

The research into the healthy, biological 

role of gelatin and related products led 

to the first upscaling steps. 

The role of 

gelatin in healthy 

food continues 

to grow 

61


• The development of gelatins that 

dissolve easily and are therefore more 

user-friendly is ongoing. 

• The gelatin hydrolysates with a low 

molecular weight are on the threshold 

of production. These types of gelatin 

hydrolysates have a low gel strength 

which means they dissolve more 

easily and are absorbed faster by the 

body. This is extremely important for 

applications such as energy drinks. 

of gelatin films. These have been 

translated into the different production 

preparations and will be used for a 

further qualification in the pharma 

sector. 

• In 2008, the first steps were made 

towards technological innovation of the 

gelatin production process. This will be 

continued in 2009. 


62 

• In the past year, new insights have been 

obtained into the dissolving behaviour 

It is expected that sales prices will 

continue to rise due to the growing


demand. This means that the higher 

raw material and energy prices will be 

compensated. In the second half of 2008, 

price increases were introduced with a 

delay which means that the adjusted sales 

prices will only have their full effect in the 

figures for 2009. 

Impact of higher 

sales prices will only be 

felt fully in 2009 


Gelatin business unit 

• To strengthen the position of 

Tessenderlo Group as one of the 

world’s top 3 players. 

• To look out for new 

opportunities in Asia and South 

America. 

There is a possibility that fewer cattle 

hides will be available on the raw materials 

market. The consumption of leather in the 

automotive sector has dropped as a result 

of the economic crisis and this means that 

skin by-products for the gelatin industry 

are more scarce. A solution is being sought 

for this. 

• To put in place optimal 

synergies between the six 

production units with a focus on 

increased cost-efficiency. 

63 

Additional investments will be made in 

China in order to maintain quality at a high 

level. The joint venture in China is expected 

to break even in 2009. 

The Gelatin business unit is striving 

towards further profit growth through 

acquisitions, the starting up of new 

sites and/or the optimal use of vertical 

integration opportunities.


Natural Derivatives 

In 2008, the French subsidiary Caillaud was renamed the Akiolis Group, with its head 

office in Le Mans. The new legal structure reflects the various activities of the group 

and provides the foundation for the international development of Akiolis in the future. 

This also includes a new and complementary scope, i.e. the valorising of by-products 

based on cereal crops. This diversification is possible thanks to the know-how of the 

group in the field of collecting, processing and selling valorised animal by-products. 

This means Akiolis is able to expand its offering for producers of pet foods and 

animal feed. 

64 


In this respect, Akiolis supplies: 

Via the French subsidiary Akiolis, 

Tessenderlo Group plays an important role 

in collecting and processing animal byproducts. 

Akiolis is the number two on the 

French market and the third largest player 

in Europe. 

- bones for the extraction of gelatines 

- proteins and animal fats for use in 

pet food 

- animal fats for the soap industry and 

lipochemistry 

- animal proteins for fertilisers 

In the field of animal by-products, 

Akiolis is active in two different but 

complementary sectors. 

• The valorisation of animal by-products 

which are suitable for consumption. 

• As a rendering plant, it handles the 

collection and the processing of risk 

waste, and protects hygiene on cattle 

farms. The processed products are 

mainly used as fuel by the cement 

industry.


Diversification towards 

the valorisation 

of by-products based 

on cereal crops 

Since 2008, Akiolis is also active in the 

valorisation of the by-products of cereal 

crops from the food industry. These 

products are meant for the production of 

animal feed and pet food. 


The results of Akiolis are overall 

satisfactory, thanks to the combined 

effect of a number of contradictory 

developments: 

- a slight drop of volumes as a result 

of a structural decline of cattle 

farming in France; 

- an improvement of the margins 

thanks to very high market prices for 

animal fats in the first ten months of 

the year; 

- higher production costs as a result 

of more expensive energy and the 

restructuring costs related to the 

closing of four sites. 

As far as production is concerned, the 

market share in the fertiliser sector grew 

considerably. The market prices for animal 

fats remained high and this was very 

favourable for the results of the rendering 

plant activities for slaughterhouses that 

make use of the services of Akiolis. 

In 2008, major restructuring took place 

after sites were acquired or demergered. 

Furthermore, two production plants in the 

west of France were closed. The rendering 

plant activities in this region and the 

supply of raw materials to be rationalised, 

increased the productivity of the collection 

and processing installations. 

The rationalisation 

of rendering 

plant activities led 

to higher 

productivity 

Productivity also grew as a result of 

better management of the industrial 

processes, combined with the introduction 

of new information technology systems, 

and thanks to an improved approach to 

collection in all subsidiaries. 

65


Simultaneously, the group continued to 

develop new markets. The collection and 

processing of used household oil from 

restaurants was extended to two additional 

regions: the west and the Paris region. 

In addition, a manager was hired for the 

methanisation activity. 

Akiolis has focused extra attention on 

searching for markets that offer the 

highest possible added value for the 

finished products, especially within the pet 

food industry. New markets were explored 

abroad. Furthermore, new applications 

were presented for existing products, such 

as the use of degreased bones for filtering 

in the sugar industry. 


Akiolis must adjust to the consequences 

of the worldwide crisis in raw materials. In 

this respect, the market price for animal 

fats dropped by more than 50 % at the 

end of 2008. However, the restructuring 

efforts implemented in recent years should 

alleviate the impact of this crisis, especially 

for the meat-related activities. 

66


Restructuring efforts in 

recent years are helping 

to alleviate the impact 

of the crisis in raw 

materials 

Furthermore, the biofuel project using 

animal fats is planned to start in 2009. This 

project was delayed in 2008 because the 

French government changed its subsidy 

policy for this activity. Government aid 

continues. However in the future it will be 

linked to the environmental impact and 

more specifically to CO 2 

emissions. The 

subsidies will also focus on the production 

of second-generation biofuels. Akiolis 

meets both conditions. 



business unit 

• Strengthen our market position 

in the sector of collection and 

processing of animal byproducts. 

• Develop new applications such 

as the biofuel, pet food and 

methanising projects. 

67 

In July 2009, the rendering plant activities 

were completely privatised and they will no 

longer be a public service. 

Akiolis continues its policy of consolidation 

by dealing with ISO certification for the 

various sites in a straightforward manner, 

by implementing the new IT system 

across the entire group, and by focusing 

recruitment efforts. 

Finally, our efforts in the field of 

methanising should result in specific 

projects across the whole of France.

MAKING 

IT 

LASTING

Sustainable entrepreneurship is an 

ongoing assignment for Tessenderlo Group. We are committed 

to the environment, and the safety and health of our employees 

and the population, in all our activities. We constantly 

measure the impact of our activities on humans and nature, 

and strive to reduce this to a minimum. 

69


Commitments 

Human Resources 

70 

Employment 

In 2008, the headcount rose from 8,121 

to 8,237. The workforce mainly increased 

in Plastics Converting, through the 

acquisition of Nyloplast in the Netherlands 

and the ongoing development of the 

Eurocell activities in Great-Britain. This 

rise largely exceeded the slight drop of 

the workforce in the other activities of the 

group. 

Within Chemicals headcount slightly 

fell as a result of previously initiated 

restructurings. As in Plastics Converting, 

the workforce in Specialities increased 

due to an acquisition. Additionally, organic 

growth of the activities positively influenced 

the headcount in Plastics Converting. 

Human Resources 

policy 

The Management Committee is strongly 

convinced that high-performing employees 

are crucial for success and for achieving 

the strategic objectives in a complex and 

ever-changing economic context. 

To implement this vision in concrete 

terms, the HR department has been 

developed further at group level and the 

roles of Corporate Talent Management, 

Compensation & Benefits, and Operational 

Design & Development, and HR projects 

have been created. 

The core mission consists of the following: 

• to attract and retain the best available 

employees


• to detect and develop talent in the 

company for future management 

positions, and to develop and maintain 

the necessary know-how 

• to support changes within the company 

and the organisation structure 

• to implement a remuneration policy that 

motivates employees and that is in line 

with market conditions 

• to strengthen constructive co-operation 

within the entire company 

Corporate Talent 

Management 

To accomplish this, a Performance 

Management Cycle for the entire 

Tessenderlo Group will be implemented 

in 2009. This is a process of motivating 

and inspiring managers and employees 

to perform actions that contribute to the 

achievement of the team, department 

and organisations goals and to the 

71 

Employment per business group 

Employment per country 

0 

500 

1,000 

1,500 

2,000 

2,500 

3,000 

3,500 

4,000 

0 

500 

1,000 

1,500 

2,000 

2,500 

Chemicals 

1,965 

France 

2,277 

Specialities 

2,755 

Belgium 

United Kingdom 

2,073 

1,393 


3,517 

North America 

Netherlands 

685 

660 

Total 

8,237 

Italy 

289 

South America 

199 

Germany 

90 

China 

304 

Others 

267 

Total 

8,237


72 

implementation of its strategies in an 

effective and efficient way, with respect 

for individual growth and aspirations 

and shared values. This Performance 

Management Cycle will be the basic tool 

for Training and Development, Reward and 

Talent Review & Succession Planning. 

In addition, the recruitment process is set 

to be made more professional in light of 

the ongoing war for talent by promoting the 

employer branding of the group and the 

introduction of competence management. 

Furthermore, the implementation of a 

Succession Planning cycle for the top 

management will also get underway, linked 

to the strategic objectives in the short and 

medium-long term of the Business. 

In addition, investments are also being 

made in Training Development. One of 

the principal projects is the offering of an 

International Customised Management 

Development Programme for our 

executives. In co-operation with a number 

of external partners, including the Vlerick 

Leuven Ghent Management School we are 

offering an 18-day programme, spread over 

a year. The programme is a tailor-made 

mini-MBA and consists of 6 modules with 

a due focus on business understanding, 

personal leadership, personal mastery and 

project management. 

Moreover, many other training initiatives 

exist for all employees at all levels for 

acquiring technical knowledge and skills, 

using IT tools, languages, communication 

techniques and people management skills. 

Compensation & 

Benefits 

In 2008, a variable pay system was 

introduced for the group’s top management 

as part of the implementation of the 

Performance Management project. In 

addition, preparations were made for the 

introduction in 2009 of a variable bonus 

plan for all managers. 

The salary house that was built for all 

Business activities was benchmarked 

to ensure internal fairness and external 

competitiveness of the remuneration 

package. 

The expatriation policy is constantly being 

adapted to the ever-changing social trends 

in this respect, and pension schemes 

are adapted to the changes of statutory 

regulations in the various countries.


Organisation Design & 

Development 

In 2008, the development of common tools 

such as Job Descriptions and Job Grading 

began for all companies of the group, in 

order to optimise the change processes and 

the efficiency of the HR policy with regard to 

the ongoing evolution of the organisation. 

Job classification which had already been 

developed for the top management and 

managers of the Chemicals business 

group was also implemented in the other 

business groups in 2008. 

Evolution of the average employment figures for Belgium and abroad 

73 

10,000 

8,000 

Total : 8,230 

6,000 

Abroad : 6,151 

4,000 

2,000 

Belgium : 2,079 

0 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 



Environment, quality, safety and risk management 

74 

Manufacturing in a way that is 

environmentally responsible, taking into 

account the health and safety of employees 

and the population, is a fundamental 

requirement for every industrial activity. 

For this very reason, Tessenderlo Group 

is committed to protecting people and 

the environment as a key consideration 

in its day-to-day policy. In this respect, 

we aspire to go further than the statutory 

requirements. To accomplish this objective, 

the group makes available considerable 

funds each year. 

To lend substance to this policy, 

Tessenderlo Group relies on internationally 

recognised principles, including 

Responsible Care, Best Available 

Techniques, ISO 14001, OHSAS 18001 and 

NFPA standards. These serve as a guide for 

optimisation. 

Incidents must be avoided at any cost - 

every accident can be prevented in theory. 

This can be achieved by putting in place the 

necessary precautions. Multi-disciplinary 

teams analyse the situation in the field on 

a continuous basis for this purpose. It is a 

key element of the ‘learning organisation’. 

Strict health and safety and environmental 

standards apply for the various sites of 

the group, including those with a low-risk 

classification. These standards are applied 

through an active risk management policy, 

the company’s own audits and insurance 

audits. 



Environmental care 

Each year, extensive investments are 

made in environmental projects in each 

of the various sites. Thanks to this 

policy, emission levels have already been 

substantially reduced in the past. 

In 2008, Tessenderlo Group also invested 

in various projects that benefit the 

environment.


Product stewardship 

As part of the preparations for REACH, 

the new chemicals policy of the European 

Union, the focus in 2008 was on the 

so-called phase-in substances. A total 

of more than 500 substances were preregistered 

for 18 legal entities with the 

European Chemical Agency (ECHA). The 

highest number of registrations was for 

the pharmaceutical subsidiaries Calaire 

Chemie (France) and Farchemia (Italy). 

Mobility and Transport with regard to the 

ADR regulations. 

The voluntary commitment by the PVC 

industry, which has been signed by the 

group, delivered the expected results. For 

more information about the commitment, 

and the results, please log on to 

www.vinyl2010.org. www.vinyl2010.org. 

In addition, within the framework of 

REACH, consortiums were set up where 

producers and importers jointly prepare 

the applications for the registration of 

certain substances. One example is that 

of the chlor-alkali products. Tessenderlo 

Group will play a leading role in a number 

of consortiums, such as the consortium for 

caustic potash as just one example. 

Risk analyses were carried out in 

collaboration with the production units, on 

products that are used in food and animal 

feeds. 

In 2008, the Tessenderlo site was visited 

by the Organisation for the Prevention of 

Chemical Weapons (OPCW). The inspection 

was completed without remarks. A 

successful audit was also carried out by 

the Federal Government Department for 

Water, air and soil 

In 2008, several of the group’s sites 

carried out investments to further reduce 

emission levels into the atmosphere and 

effluent discharges to the lowest possible 

levels. 

The re-licensing application for the three 

sites of Tessenderlo Chemie in Limburg 

(Belgium) was successfully completed in 

December 2008. The Flemish government 

has renewed the environmental permits 

for a period of twenty years. This was 

made possible thanks to the intensive 

dialogue between the company and the 

government. 

75


Under the terms of the agreements, 

salt discharges will be reduced to 

one tenth of current levels by 2014 at 

the latest. For this purpose, 

10 million EUR are being invested 

in the modification of the production 

installations in the plant at Ham. In 

addition, 20 million EUR will be invested 

in cleaning up sludge basins, and the 

company will co-operate to clean up the 

historic pollution of the banks of the local 

streams Laak and Winterbeek. 

Focus on energy 

The necessary energy surveys were 

carried out in 2008 in the companies that 

signed the Flemish Covenant on Energy 

Benchmarking. These surveys serve as the 

basis for the energy plans for the period 

2008-2012. 

A better insight into the energy situation 

resulted in further energy savings in 

several places. 

76 

Thanks to the new production process used 

in Ham, considerably less sludge needs 

to be stored. This means that 30 hectares 

of land will become available for new 

industrial estates. In joint agreement with 

the Flemish and the Limburg authorities, 

Tessenderlo Group is keen to convert the 

vacant space in Ham into industrial land. 

Its location along the Albert canal is an 

important advantage. 

Quality department 

In 2008, the quality department continued 

to assist the various departments in 

implementing and maintaining the quality 

management systems in accordance 

with the international standards, and 

maintaining the required certificates for 

the marketing of products in the various 

markets. 

With regard to the historic soil 

contamination of the factory sites in 

Limburg, the extent of the contamination 

has been outlined in descriptive soil 

surveys as agreed with the public 

authorities. These surveys specify the risks 

as well as the necessity to clean up the soil. 

At the same time, the soil decontamination 

activities that were already underway, are 

being continued. 

Health, safety and risk management 

The production units of Tessenderlo Group 

made major investments in health and 

safety in 2008. For example, a new digital 

work permit system was introduced at 

the sites in West-Limburg (Belgium). 

Preparations for maintenance works now 

occur in a uniform and structured manner.


These preparations are an important step 

in the safe execution of any given project. 

In the factory, a focus of attention is 

made to go out to communicate on 

health and safety, for example at the 

toolbox meetings. Small panel groups 

are put together to discuss specific 

health and safety topics on the shop floor. 

Opportunities for improving health and 

safety are also discussed during the health 

and safety observation and communication 

tours. 

The standard training for operators also 

focuses on health and safety. The socalled 

TOPS project (Training Operators) 

also gives practical tips on working safely, 

alongside basic health and safety aspects. 

The Risk Management Department carried 

out health and safety audits in the past 

year in the following plants: 

• China: 

Taile Chemical Industry (Lianyungang) 

PB Gelatins (Ping Yang) 

• Poland: 

Dyka Warehouses (Wroclaw and Lotz) 

• The Netherlands : 

Nyloplast (‘s-Gravendeel) 

Many other sites were audited by 

an external insurance company, in 

collaboration with the Risk Management 

Department. All of these served to confirm 

that the initiatives of Tessenderlo Group 

to increase the health and safety of its 

employees, the company, the surroundings 

and the environment, are effective. Another 

very positive conclusion is that this is a 

continuous and dynamic process. The 

following factories were audited in 2008: 

• United States: 

Jupiter Sulphur LLC (Ponca City) 

77


78 

Tessenderlo Kerley (Coffeyville) 

PB Leiner (Davenport) 

• France: 

Caillaud (Saint Langis) 

France Gras (Le Sourn) 

Point (Viriat) 

Plastival (Clerval) 

• The Netherlands: 

LVM Limburg BV (Beek) 

Tessenderlo Chemie Maastricht 

Tessenderlo Chemie Rotterdam 

• Italy: 

Tessenderlo Italia (Pieve Vergonte, 

Ceppo Morelli and Megolo) 

Farchemia (Treviglio) 

• Germany: 

PB Gelatins GmbH (Nienburg) 

• Poland: 

Dyka Polska (Wroclaw) 

TCT Polska (Sochaczew) 

• Belgium: 

PB Gelatins (Vilvoorde) 

The Risk Management Department 

primarily focused its attention on 

prevention. For example, a DVD was 

distributed with examples of good and bad 

human conduct on the shop floor. The DVD 

is available to be used in all departments 

of the group for training purposes. The 

department also gave presentations to 

the commercial teams on product liability 

and how problems can be avoided. The 

department also continued work on 

the development of health and safety 

standards for Tessenderlo Group as a 

whole. 

Community relations 

A crucial aspect of corporate social 

responsibility is good community relations 

in the way Tessenderlo Group maintains 

with the local community around the 

various sites. It is very important that 

the company and local residents have a 

good relationship. Openness and good 

communications play a key role in this 

respect. A good example of this are the 

open house days when local residents 

are informed about the activities at the 

production sites. 

The social role of the company goes even 

further than the immediate surroundings. 

It is especially important that youngsters 

receive objective information about 

the chemical industry in general and 

Tessenderlo Group in particular. 

They must be made aware of the major 

role this industry plays in their daily lives. 

A close co-operation with educational 

authorities is important to accomplish this. 

This specifically translates into company 

visits and a variety of initiatives that bridge 

the gap between industry and education.



Environmental care 

With respect to water, over the years ahead 

the sites in Limburg will focus on adapting 

the waste water circuit. This is the result 

of changes to the production process in the 

Ham factory. Further investments will also 

be made for effluent treatment at several 

other sites of the group. 

The necessary soil decontamination 

projects are also getting underway for the 

sites of Tessenderlo Chemie in Limburg. 

This is the follow-up to the descriptive 

soil surveys that outline the historic soil 

contamination. 

Various measures to protect the soil 

and further reduce emissions into the 

atmosphere will also be implemented. 

Furthermore, several energy-saving 

measures are also scheduled. 

With regard to product stewardship, 

considerable efforts will be made in the 

context of the European REACH legislation 

(Registration, Evaluation, Authorisation 

and limitations of Chemicals). The 

so-called Euclid documents detailing 

physiochemical, toxic and ecotoxic 

characteristics are being prepared for the 

substances with production levels in excess 

of 1,000 tonnes. 

The mandatory SIEF activities (Substance 

Information Exchange Forum) will also be 

carried out and followed up. This forum 

has been set up for all manufacturers 

and importers that have registered or 

pre-registered hazardous substances. 

They must exchange all available 

information amongst themselves to prevent 

unnecessary tests on animals. They must 

also ensure that the classification and 

labelling of substances occurs in a uniform 

manner. 

The IT tools required to work efficiently 

with the REACH regulations will be 

implemented in 2009 and the following 

years. Communication to customers and 

suppliers is also an important issue. 

Furthermore in respect to product 

stewardship, the European integration of 

the Surround® crop protection products 

will also be continued in 2009. 

The GHS regulations (Global Harmonised 

System) will also be implemented. This 

worldwide uniform system relates to the 

labelling and hazard signs on product 

labels. This is gradually being introduced 

since1 January 2009. 

79


80 

Moreover, an electronic system will be 

developed to make the Material Safety 

Data Sheets (MSDS) of hazardous products 

available to customers and to follow this up 

within the organisation. 

Health, safety and risk management 

In 2009, the health and safety theme 

‘Working together for more safety’ will 

be launched. The importance of a good 

co-ordination between maintenance and 

manufacturing when preparing work will 

be emphasised. 

Next to the human aspects, and in 

particular the health and safety 

conduct of employees, the safety of the 

installations will also be reviewed in 

detail and further improved. The training 

programme with customised training 

sessions will be developed further. Special 

attention will be paid to emergency 

planning in 2009. 

The risk analysis that was started in 2008 

for the Chemicals business group, will be 

developed further in 2009 and extended 

to include other business groups and 

business units. In this respect, efforts 

will be made to map out and evaluate 

a large variety of risks. This will enable 

Tessenderlo Group to reduce risks where 

possible and to manage these risks more 

effectively. 

The internal audits will continue with the 

same frequency as in 2009, with new risk 

assessment visits and revisits.


Corporate Governance 

Transparent 

management 

Tessenderlo Chemie subscribes to the nine 

principles of Corporate Governance stated 

in the Belgian Corporate Governance Code. 

In fulfilment of this, the Board of Directors 

approved its Corporate Governance Charter 

(the ‘Charter’) on 10 November 2005 

and an update on 8 November 2007. The 

Charter can be consulted on our website 

www.tessenderlogroup.com. 

Compliance with the recommendations 

contained in the Belgian Corporate 

Governance Code and fine-tuning the 

working of the Board of Directors, the 

special committees and the Management 

Committee (*) to fulfil the requirements 

of Corporate Governance is an ongoing 

process. Tessenderlo Chemie undertakes, 

therefore, to review the Charter at regular 

intervals and to modify it where necessary. 

Board of Directors 

81 

By introducing organisational and 

operational rules, the decision-making 

process within the Board of Directors, 

the special committees set up under the 

auspices of the Board of Directors, and 

the Management Committee becomes 

more transparent, taking into account the 

interests of the company, its shareholders 

and others directly or indirectly involved in 

events affecting the company, the so-called 

‘stakeholders’. 

Role and responsibilities 

The Board of Directors is the highest administrative 

body of the company, which has 

full powers under Article 18 of the Articles 

of Association. The Board of Directors is a 

body with collective responsibility, which 

reports to the General Meeting on its 

activities. 

(*) To date, it has been decided not to exercise the option offered under Article 524bis of the Belgian 

Companies Code to set up an Executive Committee.


82 

The role of the Board of Directors consists 

in ensuring the long-term success 

of Tessenderlo Chemie and Tessenderlo 

Group. The Board of Directors promotes 

and guarantees entrepreneurial leadership 

and ensures that risks can be assessed and 

managed. The Board of Directors decides 

on the values and the strategy of the company, 

its risk profile, and the key elements 

of its policy. The Board of Directors also 

exercises major monitoring and compliance 

responsibilities. 

The company is validly represented either 

by the Chairman of the Board of Directors 

or by two directors acting jointly. 

Composition 

Non-executive directors: 

• Michel Nicolas (June 2010) 

• François Schwartz (June 2011) 

• Jacques Zyss (June 2010) 

Independent non-executive directors*: 

• Valère Croes (June 2009) 

• Paul de Meester (June 2011) 

• Jaak Gabriels (June 2011) 

• Baudouin Michiels (June 2011) 

• Bernard Pache (June 2011) 

• Thierry Piessevaux (June 2011) 

• Alain Siaens (June 2010) 

• Karel Vinck (June 2011) 

The Board of Directors is supported by 

Adrien Carton de Wiart, in his capacity as 

the Secretary General of the company. 

At 31 December 2008, the Tessenderlo 

Chemie Board of Directors was composed 

as follows: 

Chairman, executive director: 

Gérard Marchand (appointment ends June 

2010) 

Remuneration policy 

Pursuant to Article 21 of the Articles 

of Association, as modified by the 

extraordinary meeting of 5 June 2007, it 

is the responsibility of the Tessenderlo 

Chemie Board of Directors to make 

(*) Pursuant to paragraph 4.10 of the Charter, a director is regarded as being independent, if he or she at the 

very least satisfies the independence criteria contained in Article 526 ter of the Belgian Companies Code. When 

assessing independence, the conditions outlined in Annex A to the Belgian Corporate Governance Code will 

also be considered. According to the information at the disposal of the Board of Directors, the independent 

directors of Tessenderlo Chemie meet the above-mentioned independence criteria. No exceptions were 

reported to the Board.


proposals concerning the remuneration 

granted to Board members. 

and 3,000 EUR for the director chairing the 

Committee. 

A special committee set up within 

the Board of Directors, namely the 

Remuneration Committee, formulates 

proposals to the Board of Directors 

concerning: 

• The remuneration for participating in 

the four annual Board meetings; 

• The remuneration granted for 

assignments related to special 

mandates. 

The Remuneration Committee also 

assesses the implementation of the various 

decisions taken on this matter. 

Non-executive directors receive fixed 

remuneration and reimbursement of 

travel expenses to meetings. Total annual 

remuneration amounts to 53,679 EUR 

per mandate, excluding reimbursement 

of travel expenses. Attendance fees 

amounting to 1,240 EUR are also granted 

per meeting of the Remuneration 

Committee and the Appointments 

Committee and, if the situation arises, the 

Independent Directors Committee to be set 

up pursuant to Article 524 of the Belgian 

Companies Code. With regard to the 

Audit Committee, the attendance fees per 

meeting amount to 2,000 EUR per director 

The executive director receives a 

remuneration package consisting of three 

different components proposed by the 

Remuneration Committee, namely: 

• A fixed remuneration of 590,352 EUR in 

2008 compared to 560,320 EUR in 2007; 

• A variable remuneration of 472,282 EUR 

relating to 2008 compared to a bonus of 

425,843 EUR in 2007; 

• The granting of stock options under 

the stock option plan for group 

topmanagement. 

In common with all employees, the 

executive director also participates in the 

company’s benefits plan. 

Operation 

Pursuant to Article 16 of the Tessenderlo 

Chemie Articles of Association, the Board 

of Directors convenes whenever it deems 

necessary, following notice given by the 

Chairman or if requested by any two 

directors. The Board of Directors may only 

validly deliberate if the majority of the 

directors is present or represented. The 

Board of Directors strives to take decisions 

by unanimous vote. If unanimity cannot be 

reached, the decision is taken by simple 

83


84 

majority, with the meeting Chairman 

having the deciding vote. 

During 2007, the Board of Directors 

convened five times. Average attendance in 

2008 was 75 % against 92 % in 2007. 

Special committees 

General 

The Board of Directors may set up special 

committees under its auspices to analyse 

certain specific matters and to advise the 

Board. However, the ultimate decisionmaking 

authority remains with the Board of 

Directors in accordance with the statutory 

provisions and the Memorandum and 

Articles of Association. 

The Tessenderlo Chemie Board of Directors 

has set up an Appointments Committee, 

a Remuneration Committee, and an Audit 

Committee. 

recommendations of the special committee 

in question. 

Appointments Committee 

The task of the Appointments Committee 

consists in advising the Board of Directors 

on and assisting it with the appointment of 

directors, or assisting the CEO with and advising 

on the appointment of Management 

Committee members. The Appointments 

Committee ensures that the (re)appointment 

procedures are carried out in a professional 

and objective manner. However, 

the ultimate decision-making authority 

remains with the General Meeting or the 

Board of Directors respectively. 

At 31 December 2008, the Appointments 

Committee was composed as follows: 

• Paul de Meester (Chairman) 

• Baudouin Michiels 

• Jacques Zyss. 

A special committee strives to take 

decisions by unanimous vote. If unanimity 

cannot be reached, the decision is taken by 

simple majority. 

Following each committee meeting, the 

Board of Directors receives a verbal or 

written report of the deliberations and 

The Appointments Committee convened 

once during the year under review. As in 

2007, the attendance rate was 100 %. 

Remuneration Committee 

The task of the Remuneration Committee 

consists in advising the Board of Directors


on and assisting it with formulating the 

remuneration policy for the executive and 

non-executive directors and Management 

Committee members. However, the ultimate 

decision-making authority remains 

with the General Meeting as far as the directors 

are concerned, and with the Board 

of Directors in the case of Management 

Committee members. 

At 31 December 2008, the Remuneration 

Committee was composed as follows: 

obligation relates to Tessenderlo Group as 

a whole and refers to financial reporting, 

internal control and risk management, in 

addition to the internal and external audit 

process. 

At 31 December 2008, the Audit Committee 

was composed as follows: 

• Valère Croes (Chairman) 

• Thierry Piessevaux 

• François Schwartz. 

• Valère Croes (Chairman) 

• Paul de Meester 

• Alain Siaens 

• Jacques Zyss 

The Financial Director, the Internal 

Auditor, the Management Controller and 

the Statutory Auditor may be invited to attend 

Audit Committee meetings. 

85 

The Remuneration Committee convened 

once during the year under review. As in 

2007, the attendance rate was 100 %. 

The Audit Committee convened three times 

during the year under review. As in 2007 

the attendance rate was 100 %. 

Audit Committee 

The task of the Audit Committee consists 

in providing the Board of Directors with assistance 

with and advice on its supervisory 

responsibilities concerning compliance in 

the most general sense. 

The compliance task of the Audit 

Committee and the associated reporting


86 

Eddy Vandenbriele 

Frank Coenen Albert Vasseur Pol Deturck 

Adrien Carton de Wiart Christian Vrebosch 


Jan Vandendriessche 

Management Committee 

Role and responsibilities 

The operational management of the 

company is entrusted by the Board of 

Directors to the Chief Executive Officer 

(CEO). The CEO is assisted by the members 

of the Management Committee. 

The operational management of the 

company includes, inter alia: 

• the day-to-day management of the 

company; 

• preparing and implementing decisions 

taken by the Board of Directors; 

• organising the internal audit, without 

prejudicing the supervisory function 

exercised by the Board of Directors; 

• preparing the budget and financial 

reporting, following these up, and 

explaining them to the Board of 

Directors; 

• preparing the annual accounts in 

accordance with the company’s 

accounting principles and valuation 

rules. 

Composition 

At 31 December 2008, the Tessenderlo 

Chemie Management Committee was


composed as follows: 

• Gérard Marchand – Chairman 

• Frank Coenen – Chemicals business 

group 

• Albert Vasseur – Plastics Converting 

business group 

• Jozef Housen – Gelatin business unit 

• Jan Vandendriessche – Fine Chemicals 

business unit 

As of 1 January 2009, the Tessenderlo 

Chemie Management Committee is 

composed as follows: 

• Gérard Marchand – Chairman 

• Frank Coenen – Chief Operating Officer 

• Albert Vasseur – Plastics Converting 

business group 

• Jan Vandendriessche – Organic 

Specialities business group 

• Pol Deturck – Chemicals business 

group 

The ordinary meetings of the Management 

Committee are also attended by the 

Secretary General, Adrien Carton de Wiart, 

the Director ICT, Internal Audit and Human 

Resources, Eddy Vandenbriele and the 

CFO, Christian Vrebosch. 

Remuneration policy 

The remuneration of Management 

Committee members is determined on the 

basis of the recommendations made by the 

Remuneration Committee. 

The remuneration package and the 

composition thereof are analysed annually 

on the basis of a study conducted by a 

specialised external agency, in order 

to take into account prevailing market 

conditions. 

The fixed remuneration must be situated at 

internationally competitive levels with the 

objective of promoting complete motivation 

and loyalty of managers towards the group. 

The variable component amounting to 

on average 30 % of total remuneration 

sets quantitative and qualitative targets 

to be met by managers, taking into 

account the specific circumstances in 

the sector of activities or business units, 

which they manage. In common with all 

senior executives at the subsidiaries, 

Management Committee members are 

also entitled to participate in the annual 

stock option plan. The apportionment of 

subscription rights is entrusted to the 

Remuneration Committee. 

The pension plan, in which the executive 

director and the Management Committee 

members participate, is the same plan 

as that for all employees and executives 

of the company and is of the type 

‘defined benefits obligations’. The annual 

remuneration for the Management 

Committee, including remuneration for 

the executive director, amounts to 2.555 

million EUR including the bonus for 2008. 

In 2007 the remuneration amounted to 

2.410 million EUR, bonus included. 

87


88 

Stock options 

In 2007 the group issued a first section of 

160,000 warrants, as part of a five-year 

plan relating to a maximum of 800,000 

warrants that could be subscribed for. 

These subscription rights can only be 

exercised after three years and this for two 

successive years. The list of beneficiaries, 

namely the Management Committee and 

the senior executives of the group (the 

‘Executive Team’), is established by the 

Board of Directors every year. The Board 

of Directors entrusts the Remuneration 

Committee with apportioning subscription 

rights among beneficiaries. The 

subscription rights are registered and 

non-transferable, except in the event of 

death. This issue enables the group’s 

senior executives to be connected with 

its financial results and this in the long 

term. The issued and offered subscription 

rights needed to be accepted fully or 

partially before 10 February 2009. The 

price at which the subscription rights can 

be exercised was set at 23.08 EUR. For the 

subplans for France and the USA the prices 

are respectively 22.07 EUR and 22.09 EUR. 

At 31 December 2008, the situation of 

the total of the number of warrants, 

which can still validly be exerted by the 

‘Executive Team’, is the following: 258,595 

in total, including 77,460 for Management 

Committee members and 181,135 for 

senior executives of the group. 

Operation 

In principle, the Management Committee 

convenes once a month. The Management 

Committee may only validly deliberate, 

if half of its members are present or 

represented. The Management Committee 

strives to take decisions by unanimous vote. 

The Management Committee reports to 

the Board of Directors on the principal 

decisions it has taken. 

During the year under review, the 

Management Committee convened eleven 

times. Attendance was 100 %. 

Conflict of interests 

regulation 

Paragraphs 4.9 and 6.6 of the Charter 

set out the conflict of interests regulation 

applicable to the Board of Directors and 

the Management Committee respectively. 

During the year under review, the Board 

of Directors was informed of a conflict of 

interest affecting one of its members as it 

was noted in the notarial deed concerning 

the emission of warrants.


Policy on inside 

information and market 

manipulation 

Chapter 8 of the Charter sets out the 

company’s policy on inside information and 

market manipulation. 

The Board of Directors has appointed the 

Secretary General, Adrien Carton de Wiart, 

as Compliance Officer. In his absence, the 

Director ICT, Internal Audit and Human 

Resources will perform the function of 

Compliance Officer. 

The Compliance Officer is responsible 

for overseeing compliance with the 

policy outlined by the company on inside 

information and market manipulation and 

acts as a point of contact for enquiries 

concerning the application of the policy. 

External Audit 

The position of statutory auditor is fulfilled 

by Klynveld Peat Marwick Goerdeler 

Bedrijfsrevisoren (KPMG), represented by 

Ludo Ruysen. Its mandate will expire in 

June 2010. 

audit committee and board of directors. 

Worldwide audit and other audit related 

fees for 2008 in relation to services 

provided by KPMG Bedrijfsrevisoren 

amounted to 0.70 million EUR (2007: 

0.47 million EUR), which was composed 

of audit services for the annual financial 

statements of 0.39 million EUR (2007: 

0.32 million EUR) and audit related 

services of 0.31 million EUR (2007: 

0.15 million EUR). 

Audit and other fees for 2008 in relation 

to services provided by other offices of the 

KPMG network amounted to 0.64 million 

EUR (2007: 0.55 million EUR) which was 

composed of audit services for the annual 

financial statements of 0.45 million EUR 

(2007: 0.47 million EUR), tax services of 

0.19 million EUR (2007: 0.08 million EUR). 

Dividends policy 

The dividend policy remains unchanged. In 

fact: one-third of the net consolidated profit 

average is paid out as dividend. However, 

this policy can be adjusted in order to 

ensure that the dividend grows or at least 

remains stable. 

89 

Fees for auditing the annual financial 

statements of Tessenderlo Chemie NV 

and its subsidiaries are determined by 

the general meeting of shareholders after 

review and approval by the company’s 

For the financial year 2008, a net dividend 

of 1.00 EUR per share will be proposed to 

the General Meeting of June 2, 2009, which 

is an increase of 5.3 % compared to last 

year’s dividend.

MAKING 

IT 

CONVINCING

Tessenderlo Group inspires confidence. Among 

customers and also among shareholders and investors. For 

many products we are the market leader in Europe and even 

in the world. In addition, Tessenderlo Group is financially a 

healthy company. Costs are monitored very closely. Our 

dividend policy is focused on stable growth. 

91


Information for 

shareholders 

Tessenderlo Chemie shares 

92 

Tessenderlo Chemie shares are listed on The shares are included in the 

the Brussels Stock Exchange with code ‘Kempen SNS Smaller European Social 

TESB. They are traded on the continuous Responsibility Index’. This index only 

market and are included in the following includes companies that fulfill stringent 

indices: BEL Mid and Next 150. 

criteria and practices in terms of business 

ethics and social and environmental 

performance. 

Shareholder structure on 31 December 2008 

Shareholder Share Last notification 

SNPE SA (FR) 25.93 % 30 October 2008 

M&G Investment Management Ltd (UK) 4.03 % 24 October 2008 

ID Sparinvest A/S (DK) 3.03 % 31 October 2008 

Sub-total 32,99 % 

Staff (Nominative shares) 1.28 % 

Free float (100 -25,93) 74,07 %


The total number of shares constituting 

the issued capital of Tessenderlo Chemie 

NV is 27,713,288. Including the shares that 

may be issued as a result of the exercise of 

warrants, the total is 27,971,883. 

In 2008, JP Morgan Chase & Co that 

officially notified to own a stake of at least 

3 % in the share capital of Tessenderlo 

Chemie NV, fell below the 3 % threshold. 

Stock market data as at 31 December 

2004* 2005 2006 2007 2008 

Number of shares 27,210,399 27,269,568 27,419,876 27,626,444 27,713,288 

Farthest prices 

Fixed ordinary share (EUR) 27.24/33 36.00/25.75 26.03/32.53 31.27/47.2 20.05/38.21 

93 

Market continuous 

Closing price (EUR) 31.14 27.35 32.3 33.2 21.63 

Average daily volume 35,536 59,890 64,063 97,787 103,308 

Velocity (in %)** 51.38 56.44 59.58 90.26 95.43 

Volume 9,203,713*** 15,391,688 16,336,185 24,935,571 26,446,820 

* As from 2004 figures are stated according to IFRS 

** Sum of the velocities of the 12 months of the year 

*** Exclusive the sale of 4,693,794 shares of EMC Parbel 

Financial data per share (consolidated accounts) 

on 31 December 

2004* 2005 2006 2007 2008 

Data per share (EUR) 

Value of shareholders’ equity 27.77 28.41 25.96 29.04 32.55 

Profit (+) / Loss (-) 1.97 1.29 -0.89 4.69 5.08 

Net cash flow 7.19 5.91 5.21 8.99 10.11 

Net dividend per ordinary share 0.90 0.90 0.90 0.95 1.00 

Capital (millions EUR) 134.00 135.00 136.00 137.02 138.00 

Capitalisation at the end of year (millions EUR) 847.30 745.80 885.70 917.20 599.40 

* As from 2004 figures are stated according to IFRS


Dividend 

On 2 June 2009, a proposal will be put to 

the Annual General Meeting to approve a 

net dividend of 1.00 EUR (coupon n° 72). 

This corresponds to a gross dividend 

of 1.3333 EUR. The net dividend for 

shares with VVPR strips attached will be 

1.1333 EUR. The net dividend of 1.00 EUR 

means an increase of 5.3 % compared with 

financial year 2007. 

The net dividend will be payable as 

from June 9, 2009 either per transfer to 

registered and dematerialised shares, or 

against handing-over of the coupon for 

materialised shares (and if necessary from 

strips VVPR) to Belgian banks and financial 

institutions, the financial service being 

ensured by ING Belgium. 

94 

Financial communication and 

investor relations 

Road shows and events 

Each year, the financial managers work 

with the Corporate Communication 

department on a number of initiatives to 

raise awareness of Tessenderlo Group 

among institutional and private investors. 

Between ‘roadshows’, the group regularly 

participates in events for investors and 

organises company visits and meetings 

with the group management. 

The group also invites analysts on a regular 

base in order to comment on the results 

and future developments. In a ddition the 

group organises conferences calls for 

analysts to explain the quarterly results. 

Financial calendar 

Financial year 2008 Announcement of results 12 March 2009 

General Meeting 2 June 2009 

Payment of dividend 9 June 2009 

First quarter 2009 Announcement of quarterly results 23 April 2009 

First half year 2009 Announcement of quarterly results 27 August 2009 

Third quarter 2009 Announcement of quarterly results 5 November 2009


Full financial and non-financial information 

about the group is available on the website 

at www.tessenderlogroup.com. Anyone 

wishing to receive Tessenderlo Group press 

releases by e-mail may register on the 

mailing list on this website. 

The Tessenderlo Chemie share price is 

published on www.tessenderlogroup. 

com and on the Euronext website: www. 

euronext.com. 

Contacts 

The following people are available to 

answer any questions about Tessenderlo 

Group: 

Investors and analysts 

Christian Vrebosch (CFO) 

Tel: +32 2 639 18 87 

E-mail: 

christian.vrebosch@tessenderlo.com 

Providers of financial 

information 

Providers of Tessenderlo Group financial 

information publish under the following 

codes: 

Shareholders 

Jo Verspecht 

Tel: +32 2 639 18 31 

E-mail: jo.verspecht@tessenderlo.com 

95 

• Bloomberg: TESB BB 

• Reuters: TESBt.BR 

• Datastream: B:TES 

• TBM: 23IT081 

• SEDOL: 4-884-006 

• ALPHA: TES 

• ISIN: BE 000 3 555 639 

“The stock market price of 

Tessenderlo Chemie shares 

generally held its own in relation 

to the Belgian or European stock 

exchange indices and continued to 

do so until November 2008. As of 

this time, prices of chemical shares 

sustained a downward sweep as 

a result of the uncertainty as to 

the performance of industrial 

businesses for the months ahead.” 


CEO


Shareholders equity & Stock market capitalisation 


2, 000 

1,000 

Shareholders’ equity 

96 

0 

Stock market 

capitalisation 

Net dividend per share (EUR) 

 

IFRS 

1.00 

 

 

 

 

 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 


1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 



Return on dividends reinvested 

200 

150 

100 

50 

Dec. 03 

2004 

2005 

97 

40 

30 

20 

10 

Jan. 08 

Feb. 08 

March 08 

April 08 

May 08 

June 08 

July 08 

Aug. 08 

Sept. 08 

Oct. 08 

Nov. 08 

Dec. 08 

2006 

2007 

Dec. 08 

Change in the Tessenderlo Chemie share price 

in 2008 (EUR)

MAKING 

IT 

WORK

Co-operation means working together. Effective 

communication between employees is the key 

to success. Like at PB Gelatins in Vilvoorde. All maintenance 

works are discussed and planned at the weekly team meeting 

between the managers of maintenance and production. 

99

financial report 2008 

CONSOLIDATED FINANCIAL REPORT 

CONSOLIDATED INCOME STATEMENT 

(Millions EUR) note 2008 2007 

Revenue 2,765.0 2,405.9 

Cost of sales -2,165.9 -1,873.6 

Gross profit 599.1 532.3 

Distribution expenses -144.6 -165.2 

Sales and marketing expenses -62.7 -77.4 

Administrative expenses -126.1 -125.2 

Other operating income and expenses 4 -26.6 -12.2 

Profit from operations before non-recurring items 239.1 152.3 

100 

Gain on disposals 5 12.8 58.4 

Restructuring (incl. impairment losses) 5 -18.2 -15.6 

Environmental provisions 5 -14.2 -2.8 

Other 5 -7.3 -4.9 

Profit (+) / loss (-) from operations 212.2 187.4 

Finance expenses 8 -29.8 -23.9 

Finance income 8 8.2 6.3 

Finance expenses - net -21.6 -17.6 

Share of result of investments accounted 

for using the equity method 

13 11.5 6.0 


Income tax expense 9 -61.7 -47.1 


Attributable to: 

- Equity holders of the Group 140.5 128.9 

- Minority interests -0.1 -0.2 

Basic earnings per share (EUR) 21 5.08 4.69 

Diluted earnings per share (EUR) 21 5.08 4.68


CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE 


Translation differences 20 -8.8 -12.4 

Net income (+) / expense (-) recognised directly in equity -8.8 -12.4 


Total recognised income (+) and expense (-) for the period 131.6 116.3 

Attributable to: 

Equity holders of the Group 131.7 116.5 

Minority interests -0.1 -0.2 

Total recognised income (+) and expense (-) for the period 131.6 116.3 

101


CONSOLIDATED BALANCE SHEET 


ASSETS 

Non-current assets 810.1 823.8 

Property, plant and equipment 10 652.0 677.8 

Goodwill 11 38.3 37.2 

Intangible assets 12 39.9 36.9 

Investments accounted for using the equity method 13 39.6 24.0 

Investments 14 5.2 6.1 

Deferred tax assets 15 17.7 26.3 

Trade and other receivables 16 17.4 15.5 

Current assets 1,002.1 859.4 

Inventories 17 473.7 339.9 

Trade and other receivables 16 469.5 424.0 

Derivative financial instruments 25 5.4 1.9 

Cash and cash equivalents 18 53.5 93.6 

Non current assets classified as held for sale 19 0.7 0.0 

Total assets 1,812.9 1,683.2 

102 


EQUITY & LIABILITIES 

Equity 

Equity attributable to equity holders of the Group 20 900.0 800.2 

Issued capital 20 138.0 137.0 

Share premium 20 43.3 42.0 

Reserves 20 313.4 238.6 

Retained earnings 20 405.3 382.6 

Minority interests 20 2.0 2.0 

Total equity 902.0 802.2 

Liabilities 

Non-current liabilities 267.7 269.3 

Financial liabilities 22 96.7 122.6 

Employee benefits 23 40.9 46.4 

Provisions 24 85.7 63.1 

Deferred tax liabilities 15 44.4 37.2 

Current liabilities 643.2 611.7 

Financial liabilities 22 251.4 214.8 

Trade and other payables 25 388.9 385.9 

Current tax liabilities 2.0 2.4 

Provisions 24 0.9 8.6 

Total liabilities 910.9 881.0 

Total equity and liabilities 1,812.9 1,683.2


CONSOLIDATED CASH FLOW STATEMENT 


OPERATING ACTIVITIES 


Depreciation, impairment and amortisation 144.8 128.9 

Changes in provisions 9.3 -5.7 

Loss / (profit) on sale of non-current assets -12.4 -56.2 

Non cash items -1.4 0.5 

Changes in inventories -149.1 -1.7 

Changes in trade and other receivables -52.8 8.9 

Changes in trade and other payables 2.6 18.1 

Cash generated from operating activities 153.2 280.2 

Interest paid -14.6 -17.9 

Interest received 2.8 4.2 

Income tax (paid) / received -57.6 -48.0 

Dividends received from investments accounted for using the 

30 10.2 4.9 

equity method 

Cashflow from operating activities 94.0 223.4 

INVESTING ACTIVITIES 

Acquisition of property, plant and equipment 10 -94.2 -98.6 

Acquisition of intangible assets 12 -7.2 -5.5 

Acquisition of investments accounted for using the equity method 3 -3.1 - 

Acquisition of businesses, net of cash acquired 3 -18.5 -25.8 

Acquisition of investments -0.4 - 

Proceeds from sale of property, plant and equipment 15.1 11.0 

Proceeds from sale of intangible assets - 1.0 

Proceeds from sale of subsidiaries, net of cash disposed of 3 - 3.6 

Proceeds from sale of investments accounted for using the equity 3 - 68.7 

method 

Proceeds from sale of investments 0.1 - 

Proceeds from government grants - 12.5 

Cashflow from investing activities -108.2 -33.1 

103 

FINANCING ACTIVITIES 

Increase/(decrease) of issued capital 20 2.3 6.5 

Increase/(decrease) of financial liabilities 10.1 -105.7 

(Increase)/decrease of long term receivables -2.4 0.9 

Dividends paid to shareholders 20 -35.0 -33.5 

Cashflow from financing activities -25.0 -131.8 

Net increase/(decrease) in cash and cash equivalents -39.2 58.5 

Effect of exchange rate differences -0.9 -1.2 

Cash and cash equivalents at the beginning of the year 18 93.6 36.3 

Cash and cash equivalents at the end of the year 18 53.5 93.6


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 

104 

Summary of significant accounting policies 1 

Segment reporting 2 

Acquisitions and disposals 3 

Other operating income and expenses 4 

Non-recurring items 5 

Payroll and related benefits 6 

Additional information on operating expenses by nature 7 

Finance income and expense 8 

Income tax expense 9 

Property, plant and equipment 10 

Goodwill 11 

Intangible assets 12 

Investments accounted for using the equity method 13 

Investments 14 

Deferred tax assets and liabilities 15 

Trade and other receivables 16 

Inventories 17 

Cash and cash equivalents 18 

Non-current assets held for sale 19 

Equity 20 

Earnings per share 21 

Financial liabilities 22 

Employee benefits 23 

Provisions 24 

Trade and other payables 25 

Financial instruments 26 

Operating leases 27 

Guarantees and commitments 28 

Contingencies 29 

Related parties 30 

Information on the auditors’ assignment and related fees 31 

Subsequent events 32 

Consolidated companies 33 

Critical accounting estimates and judgements 34


1. Summary of significant accounting policies 

Tessenderlo Chemie NV (hereafter referred to as the « Company ») is a company domiciled in Belgium. 

The consolidated financial statements for the year ended 31 December 2008 comprise the Company and 

its subsidiaries (together referred to as the « Group ») and the Group’s interests in associates and jointly 

controlled entities. 

The IFRS financial statements were authorised for issue by the Board of Directors of Tessenderlo 

Chemie NV on Thursday 12 March 2009. 

(A) Statement of compliance 

The consolidated financial statements have been prepared in accordance with International Financial 

Reporting Standards (formerly named IAS) issued by the International Accounting Standards Board 

(IASB) as adopted by the European Union. 

(B) Basis of preparation 

The financial statements are presented in euro, rounded to the nearest million. They are prepared on 

the historical cost basis except for derivative financial instruments and investments available-for-sale, 

which are stated at fair value. 

105 

Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair 

value less costs to sell. 

The preparation of financial statements in conformity with IFRSs requires management to make 

judgements, estimates and assumptions that affect the application of policies and reported amounts 

of assets and liabilities, income and expenses. The estimates and associated assumptions are based 

on historical experience and various other factors that are believed to be reasonable under the 

circumstances, the results of which form the basis of making the judgements about carrying values of 

assets and liabilities that are not readily apparent from other sources. Actual results may differ from 

these estimates. 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting 

estimates are recognised in the period in which the estimate is revised if the revision affects only that 

period, or in the period of the revision and future periods if the revision affects both current and future 

periods. 

Judgements made by management in the application of IFRS that have significant effect on the financial 

statements and estimates with a significant risk of material adjustment in the next year are discussed in 

note 34. 

The consolidated financial statements are presented before the effect of the profit appropriation of the 

Company proposed to the General Assembly of shareholders. 

The accounting policies set out hereafter have been applied consistently by the Group to all periods 

presented in these consolidated financial statements.


(C) Principles of consolidation 

Companies controlled by the Group (i.e. in which the Group has, directly, or indirectly, an interest of 

more than one half of the voting rights or is able to exercise control over the operations, further also 

“subsidiaries”) have been fully consolidated. In assessing control, potential voting rights that presently 

are exercisable or convertible are taken into account. The financial statements of subsidiaries are 

included in the consolidated financial statements from the date that control commences until the date 

that control ceases. Separate disclosure is made of minority interests. 

Investments in associates and jointly controlled entities (joint ventures) are included in the consolidated 

financial statements using the equity method. The investments in associates are those in which the 

Group has significant influence over the financial and operating policies, but which it does not control. 

In general, it is the case when the Group holds between 20 % and 50 % of the voting rights. The equity 

method is used as from the date that significant influence commences until the date that significant 

influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s 

carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent 

that the Group has incurred legal or constructive obligations in respect of the associate. 

106 

All intercompany transactions, balances and unrealised gains and losses on transactions between group 

companies have been eliminated. Unrealised gains arising from transactions with associates and jointly 

controlled entities are eliminated to the extent of the Group’s interest in the entity. Unrealised losses 

are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of 

impairment. 

(D) Foreign currency 

• Foreign currency transactions 

Foreign currency transactions are accounted for at exchange rates prevailing at the date of the 

transaction. Monetary assets and liabilities denominated in foreign currencies are translated at balance 

sheet date rate. The resulting gains and losses of these transactions are recognised in the income 

statement of the period. 

Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value 

are translated to euro at foreign exchange rates ruling at the dates the fair value was determined. For 

available for sale non-monetary assets, foreign exchange gains and losses are not separated from the 

total fair value changes. 

• Foreign currency translation 

Assets and liabilities of foreign entities included in the consolidation are translated to euro at the 

foreign exchange rates ruling at the balance sheet date. The income statement of the foreign entities is 

translated to euro at the annual average foreign exchange rates (approximating the foreign exchange 

rates prevailing at the dates of the transactions). The components of equity attributable to equity holders 

of the Group are translated at historical rates. Exchange differences arising from the translation of the 

equity attributable to the equity holders of the Group to euro at year-end exchange rates are taken to 

“Translation reserves” in Equity.


• Exchange rates 

The following exchange rates have been used in preparing the financial statements: 

Closing rate 

Average rate 

1 EUR equals : 2008 2007 2008 2007 

Brazilian real 3.2332 2.7490 2.6701 2.6622 

Canadian dollar 1.6998 1.4449 1.5600 1.4678 

Chinese yuan 9.4956 10.7524 10.2211 10.4178 

Czech crown 26.8750 26.6280 24.9519 27.7656 

Hungarian forint 266.7000 253.7300 251.5800 251.3500 

Polish zloty 4.1535 3.5935 3.5143 3.7837 

Pound sterling 0.9525 0.7333 0.7969 0.6843 

Slovak koruna 30.1260 33.5830 31.2576 33.7745 

Swiss franc 1.4850 1.6547 1.5871 1.6427 

US dollar 1.3917 1.4721 1.4705 1.3705 

(E) Intangible assets 

• Research and development 

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical 

knowledge and understanding, is recognised in the income statement as an expense as incurred. 

107 

Expenditure resulting from development activities, whereby research findings are applied to a plan or 

design for production of new or substantially improved products and processes, is capitalised if the 

product or process is technically and commercially feasible and the company has sufficient resources to 

complete development. 

The capitalised expenditure includes the cost of materials, direct labour and an appropriate proportion 

of overheads. Other development expenditure is recognised in the income statements as an expense 

as incurred. Capitalised development is stated at cost less accumulated amortisation (see below) and 

impairment losses (see accounting policy J). 

• Emission allowances 

The cost of acquiring emission allowances is recognised as intangible asset, whether they have been 

purchased or received free of charge (in the latter the acquisition cost is zero). A provision is set up to 

cover obligations to refund allowances depending on emissions if, during a given period, the number of 

allowances required exceeds the total number of allowances received. This provision is measured at the 

estimated amount of the expenditure required to settle the obligation. 

• Other intangible assets 

Other intangible assets, acquired by the Group, are stated at cost less accumulated amortisation (see 

below) and impairment losses (see accounting policy J).


• Subsequent expenditure 

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future 

economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed 

as incurred. 

• Amortisation 

Intangible assets with a finite life are amortised using the straight-line method over their estimated 

useful lives. 

The estimated useful lives of the respective asset categories are as follows: 

Development 

Software 

Concessions, licenses, patents and other 

5 years 

3 to 5 years 

10 to 20 years 

Intangible assets with an indefinite useful life are tested for impairment on an annual basis. 

(F) Goodwill 

108 

• Goodwill 

Goodwill represents the excess of the cost of an acquisition over the fair value of the company’s share of 

the net identifiable assets of the acquired subsidiary, jointly controlled entity or associate at the date of 

acquisition. 

All goodwill has been frozen on the 1st of January 2004 and is not amortised anymore, but tested at 

least annually for impairment and whenever there is an indicator that the unit to which the goodwill has 

been allocated may be impaired (see accounting policy J). 

Goodwill is expressed in the currency of the subsidiary, jointly controlled entity or associate to which it 

relates. 

• Negative goodwill 

Negative goodwill represents the excess of the fair value of the company’s share of the net identifiable 

assets acquired over the cost of acquisition. Any negative goodwill is recognised directly in the income 

statement. 

• Subsequent measurement 

Goodwill is measured at cost less accumulated impairment losses. In respect of equity accounted 

investees, the carrying amount of goodwill is included in the carrying amount of the investment.


(G) Property, plant and equipment 

• Owned assets 

Items of property, plant and equipment (further also “PP&E”) are stated at cost less accumulated 

depreciation and impairment losses. Cost includes the purchase price and any costs directly attributable 

to bringing the asset to the location and condition necessary for it to be capable of operating in the 

manner intended by management (e.g. non refundable tax, transport and the costs of dismantling and 

removing the items and restoring the site on which they are located, if applicable). The cost of a selfconstructed 

asset is determined using the same principles as for an acquired asset and includes the 

cost of materials, direct labour and an appropriate proportion of indirect costs. Borrowing costs directly 

attributable to the acquisition, construction or production of an asset, requiring a long preparation, are 

included in the cost of the asset. 

Where parts of an item of property, plant and equipment have different useful lives, they are accounted 

for as separate items of property, plant and equipment. 

• Subsequent expenditure 

Subsequent expenditure incurred in replacing or renewing components of some items of property, 

plant and equipment is accounted for as the acquisition of a separate asset and the replaced asset is 

written off. Capitalisation of subsequent expenditure is only done when it increases the future economic 

benefits embodied in the item of property, plant and equipment. Repair and maintenance, which do not 

increase the future economic benefits of the asset to which they relate, are expensed as incurred. 

109 

• Depreciation 

Depreciation is charged to the income statement as from the date the asset is available for use, on 

a straight-line basis over the estimated useful lives of each part of an item of property, plant and 

equipment. 

The estimated useful lives of the respective asset categories are as follows: 

Improvements to land 

Buildings 

Building improvements 

Plant installations 

Machinery and equipment 

Furniture and office equipment 

Extrusion and tooling equipment 

Laboratory and research – infrastructure 

Vehicles 

Computer equipment 




6 to 20 years 

5 to 15 years 

4 to 10 years 

3 to 7 years 

3 to 5 years 

4 to 10 years 

3 to 5 years 

Land is not depreciated as it is deemed to have an indefinite life.


• Government grants 

Government grants relating to the purchase of property, plant and equipment are deducted from the 

carrying amount of the related asset when there is reasonable assurance that they will be received and 

the company will comply with the conditions attached to it. They are recognised in the income statement 

as other operating income on a straight-line basis over the estimated useful life of the associated asset. 

(H) Leased assets 

Leases of property, plant and equipment where the company assumes substantially all the risks and 

rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of 

the fair value and the present value of the minimum lease payments at inception of the lease, less 

accumulated depreciation (see accounting policy G) and impairment losses (see accounting policy J). 

Each lease payment is allocated between the liability and finance charges so as to achieve a constant 

periodic rate of interest on the outstanding finance balance. The corresponding obligations, net of 

finance charges, are included in other long-term payables. The interest element is charged to the 

income statement as a finance charge over the lease period. Property, plant and equipment acquired 

under finance lease contract is depreciated over the useful life of the asset (see accounting policy G). 

110 

Leases of assets under which the lessor substantially retains all the risks and rewards of ownership are 

classified as operating leases. The payments made under operating leases are charged to the income 

statement on a straight-line basis over the term of the lease. 

(I) Investments 

Each category of investment is accounted for at trade date. 

• Investments in equity securities 

Investments in equity securities are undertakings in which the Group does not have significant 

influence or control. This is generally evidenced by ownership of less than 20 % of the voting rights. 

Such investments are designated as available for sale financial assets and are recorded at their fair 

value unless the fair value cannot be reliably determined in which case they are carried at cost less 

impairment losses. The fair value is the quoted bid price at balance sheet date. Changes in fair value are 

directly recognised in equity, except for impairment losses. On disposal of an investment, the cumulative 

gain or loss previously recognised directly in equity is recognised in profit or loss. 

• Other investments 

The other investments mainly include cash guarantees. 

(J) Impairment 

At each balance sheet date, the Group reviews the carrying amounts of the Group’s assets, other than 

inventories (see accounting policy K) and deferred tax assets (see accounting policy R), to determine 

whether there is any indication of impairment. If such an indication exists, the asset’s recoverable


amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its 

cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income 

statement. 

Goodwill, intangible assets with indefinite useful life and intangible assets not yet available for use 

were tested for impairment at 1 January 2004, the date of transition to IFRS, even if no indication of 

impairment existed. 

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the 

carrying amount of any goodwill allocated to cash-generating units and then, to reduce the carrying 

amount of other assets in the unit on a pro rata basis. 

• Calculation of recoverable amount 

The recoverable amount is the higher of the fair value less costs to sell and its value in use. The value in 

use is the net present value of the estimated future cash flows from the use of an asset. The recoverable 

amount is calculated at the level of the cash-generating unit to which the asset belongs. In assessing 

the value in use, the estimated future cash flows are discounted to their present value using a discount 

rate that reflects current market assessments of the time value of money and the risks specific to the 

asset, to the business etc. 

• Reversal of impairment 

111 

If there has been a change in the estimates used to determine the recoverable amount on assets other 

than goodwill, the carrying amount is partially or totally re-established through the non-recurring items 

in the income statement, to the extent that the asset’s carrying amount does not exceed the carrying 

amount that would have been determined, net of depreciation or amortisation, if no impairment loss had 

been recognised. 

An impairment loss in respect of goodwill cannot be reversed. 

(K) Inventories 

Inventories are stated at the lower of cost and net realisable value. The cost is determined by the 

weighted average cost method. 

The cost of finished goods and work in progress comprises raw materials, other production materials, 

direct labour, other direct cost and an allocation of fixed and variable overhead based on normal 

operating capacity. Cost of inventories includes the purchase, conversion and other costs incurred 

to bring the inventories to their present location and condition. Net realisable value represents the 

estimated selling price, less all estimated costs of making the product ready for sale. 

(L) Trade and other receivables 

Trade and other receivables are stated at amortised cost less appropriate allowances for nonrecoverable 

amounts.


(M) Cash and cash equivalents 

Cash includes cash in hand and cash with banks. Cash equivalents are short-term, highly liquid 

investments that are readily convertible into known amounts of cash, have a remaining maturity date of 

three months or less and are subject to an insignificant risk of change in value. 

(N) Issued capital 

• Ordinary shares 

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary 

shares and share options are recognised as a reduction from equity, net of any tax effects. 

• Repurchase of issued capital 

When share capital recognised as equity is repurchased, the amount of the consideration paid, including 

directly attributable costs, is recognised as a change in equity. Repurchased shares are classified as 

treasury shares and presented as a deduction from total equity. When treasury shares are sold or 

reissued subsequently, the amount received is recognised as an increase in equity, and the resulting 

surplus or deficit on the transaction is transferred to/from retained earnings. 

112 

• Dividends 

Dividends are recognised as a liability in the period in which they are declared. 

(O) Financial liabilities 

Financial liabilities are recognised initially at cost, less attributable transaction costs. Subsequent 

to initial recognition, interest-bearing loans and borrowings are stated at amortised cost with any 

difference between cost and redemption value being recognised in the income statement over the period 

of borrowings on an effective interest basis. 

(P) Provisions 

Provisions are recognised in the balance sheet when the company has a present obligation (legal or 

constructive) as a result of a past event, it is probable that an outflow of resources embodying economic 

benefits will be required to settle the obligation and a reliable estimate can be made of the amount of 

the obligation. 

If the effect is material, provisions are determined by discounting the expected future cash flows at a 

rate that reflects current market assessments of the time value of money and, where appropriate, the 

risks specific to the liability. 

• Restructuring 

A provision for restructuring is recognised when the company has approved a detailed and formal 

restructuring plan, and the restructuring has either commenced or has been announced to those 

affected by it. Future operating costs are not provided for.


• Environmental obligations 

Environmental provisions are based on legal and constructive obligations from past events, 

in accordance with applicable legal requirements. 

• Onerous contracts 

A provision for onerous contracts is recognised when the expected benefits to be derived by the company 

from a contract are lower than the unavoidable cost of meeting its obligations under the contract. Such 

provision is measured at the present value of the lower of the expected cost of terminating the contract 

and the expected net cost of continuing with the contract. Before a provision is established, the Group 

recognises any impairment loss on the assets associated with that contract. 

• Others 

Includes provisions for litigations and warranties. 

(Q) Employee benefits 

• Post employment benefits 

Post employment benefits include pensions and medicare benefits. The Group operates a number of 

defined benefits and defined contribution plans throughout the world, the assets of which are generally 

held in separate pension funds. Separate trusts and insurers generally hold the pension plans. 

113 

- Defined contribution plans: 

Contributions to defined contribution pension plans are recognised as an expense in the income 

statement as incurred. 

- Defined benefit plans: 

For defined benefit plans, the pension accounting costs are assessed separately for each plan using the 

projected unit credit method. Under this method, the cost of providing pensions is charged to the income 

statement in order to spread the regular cost over the service lives of employees in accordance with 

the advice of qualified actuaries who carry out a full valuation of the plans. The amounts charged to the 

income statement consist of current service cost, interest cost, the expected return on any plan assets, 

actuarial gains and losses and past service costs. 

The pension obligation recognised in the balance sheet is determined as the present value of the defined 

benefit obligation (using interest rates of high quality corporate bonds which have terms to maturity 

approximating the terms of the related liability) adjusted for unrecognised actuarial gains and losses, 

less unrecognised past service costs and less the fair value of the plan assets. 

All actuarial gains and losses as at 1 January 2004, the date of transition to IFRS, were recognised. In 

respect of actuarial gains and losses that arise subsequent to 1 January 2004 in calculating the Group’s 

obligation in respect of a plan, to the extent that any cumulative unrecognised actuarial gain or loss


exceeds 10 % of the greater of the present value of the defined benefit obligation and the fair value of 

plan assets, that portion is recognised in the income statement over the expected average remaining 

working lives of the employees participating in the plan. Otherwise, the actuarial gain or loss is not 

recognised. 

Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total 

of any unrecognised actuarial losses and past service costs and the present value of any future refunds 

from the plan or reductions in future contributions to the plan. 

• Termination benefits (pre-retirement plans, other termination obligations) 

These benefits arise as a result of the company’s decision to terminate the employment of an employee 

or group of employees before the normal retirement date or of an employee’s decision to accept 

voluntary redundancy in exchange for those benefits. 

These benefits are accrued for at the moment of notification. 

• Equity compensation benefits 

114 

A stock option plan allows senior management to acquire shares of the Company. The option’s exercise 

price equals the lowest of the average market price of the underlying shares in the 30 trading days 

preceding the offer date or the market price on the last day preceding the offer date. These share-based 

payments are recognised in the financial statements based on the fair value of the awards measured at 

grant date, spread over the vesting period. When the options are exercised, equity is increased by the 

amounts of the proceeds received. 

• Short-term benefits 

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as 

the related service is provided. 

A liability is recognised for the amount expected to be paid under short-term cash bonus or profitsharing 

plans if the Group has a present legal or constructive obligation to pay this amount as a result of 

past service provided by the employee and the obligation can be estimated reliably. 

(R) Income tax 

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is 

recognised in the income statement except to the extent that it relates to items recognised directly to 

equity, in which case it is recognised in equity. 

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or 

substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous 

years. 

Deferred tax is provided using the balance sheet liability method, for temporary differences arising 

between the carrying values of assets and liabilities for financial reporting purposes and the basis used 

for taxation purposes. The following temporary differences are not provided for: the initial recognition 

of assets or liabilities that affects neither accounting nor taxable profit and differences relating to


investments in subsidiaries to the extent that will probably not reverse in the foreseeable future. The 

amount of deferred tax provided is based on the expected manner of realisation or settlement of the 

carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance 

sheet date. 

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will 

be available against which the deductible temporary differences, unused tax losses and credits can be 

utilised. A deferred tax asset is reduced to the extent that it is no longer probable that related tax benefit 

will be realised. 

Additional income taxes that arise from the distribution of dividends are recognised at the same time as 

the liability to pay the related benefit. 

(S) Trade and other payables 

Trade and other payables are stated at cost. 

(T) Income 

• Revenue 

For the sale of goods, revenue is recognised in the income statement when the significant risks and 

rewards of ownership have been transferred to the buyer. 

115 

Revenue is recognised when there are no significant uncertainties regarding recovery of the 

consideration due, when the associated costs and possible return of goods can be estimated reliably and 

when there is no continuing management involvement with the goods and the amount of revenue can be 

estimated reliably. 

• Financial income 

Financial income comprises interest receivable on funds invested, dividend income, foreign exchange 

gains and gains on derivative financial instruments. 

Interest income is recognised in the income statement as it accrues, taking into account the effective 

yield on the asset. 

Dividend income is recognised in the income statement on the date the entity’s right to receive payments 

is established. 

(U) Expenses 

• Financial expenses 

Financial expenses comprise interest payable on borrowings, foreign exchange losses and losses on 

derivative financial instruments. 

All interest and other costs incurred in connection with borrowings are expensed as incurred as part 

of financial expenses. The interest expense component of finance lease payments is recognised in the 

income statement using the effective interest rate method.


(V) Derivative financial instruments 

The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest 

rate risks arising from operational, financial and investment activities. In accordance with its treasury 

policy, the Group does not hold or issue derivative financial instruments for trading purposes. 

Derivative financial instruments are recognised initially at cost. Subsequent to initial recognition, 

derivative financial instruments are stated at fair value. The gain or loss on remeasurement to fair value 

is recognised immediately in profit or loss. 

(W) Non-current assets held for sale and discontinued operations 

Immediately before classification as held for sale, the remeasurement of the assets (and all assets and 

liabilities in a disposal group) is brought up-to-date in accordance with applicable IFRSs. Then, on initial 

classification as held for sale, non-current assets and disposal groups are recognised at the lower of 

carrying amount and fair value less costs to sell. 

Impairment losses on initial classification as held for sale are included in the profit or loss. The same 

applies to gains and losses on subsequent remeasurement. 

116 

A discontinued operation is a component of the Group’s business that represents a separate major line 

of business or a geographical area of operations or is a subsidiary acquired exclusively with a view to 

resale. 

Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria 

to be classified as held for sale, if earlier. A disposal group that is to be abandoned may also qualify. 

(X) Earnings per share 

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS 

is calculated by dividing the profit or loss attributable to equity holders of the Group by the weighted 

average number of ordinary shares outstanding during the period. 

The diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and 

the weighted average number of ordinary shares outstanding for the effects of all dilutive potential 

ordinary shares, which comprise share options granted to the management. 

(Y) Segment reporting 

A segment is a distinguishable component of the Group that is engaged either in providing products 

or services (business groups), or in providing products or services within a particular economic 

environment (geographical segment), which is subject to risks and rewards that are different from those 

of other segments. 

Segment information is produced according to two different criteria: a primary segment reporting 

format is based on the Group’s sector of activity (business groups), a secondary segment reporting 

format is based on the main geographical regions.


(Z) Recently issued IFRS 

To the extent that new IFRS requirements are expected to be applicable in the future, they have been 

summarised hereafter. 

• IFRS 8 Operating segments 

IFRS 8 “Operating segments” introduces the “management approach” to segment reporting. IFRS 8, 

which becomes mandatory for the Group’s 2009 financial statements, will require the disclosure of 

segment information based on the internal reports regularly reviewed by the Group’s Chief Operating 

Decision Makers in order to assess each segment’s performance and to allocate resources to them. 

Currently the Group presents segment information in respect of its business and geographical segments 

(see note 2 “Segment reporting”). IFRS 8 is not expected to trigger a material change to the Group’s 

current segment reporting. 

• Revised IAS 23 Borrowing costs 

Revised IAS 23 “Borrowing costs” removes the option to expense borrowing costs and requires that an 

entity capitalises borrowing costs directly attributable to the acquisition, construction or production of 

a qualifying asset as part of the cost of that asset. The revised IAS 23 will become mandatory for the 

Group’s 2009 financial statements and will not constitute a change in accounting policy for the Group. 

• IFRIC 13 Customer Loyalty Programs 

117 

IFRIC 13 “Customer Loyalty Programs” addresses the accounting by entities that operate, or otherwise 

participate in, customer loyalty programs for their customers. It relates to customer loyalty programs 

under which the customer can redeem credits for awards such as free or discounted goods or services. 

The Group has not yet determined the potential impact of the interpretation, which becomes mandatory 

for the Group’s 2009 financial statements. 

• Revised IAS 1 Presentation of financial statements 

Revised IAS 1 Presentation of Financial Statements (2007) (endorsed by the European Union) introduces 

the term total comprehensive income, which represents changes in equity during a period other than 

those changes resulting from transactions with owners in their capacity as owners. Total comprehensive 

income may be presented in either a single statement of comprehensive income (effectively combining 

both the income statement and all non-owner changes in equity in a single statement), or in an 

income statement and a separate statement of comprehensive income. Revised IAS 1, which becomes 

mandatory for the Group’s 2009 consolidated financial statements, is not expected to have an impact on 

the presentation of the consolidated financial statements. 

• Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation 

of Financial Statements – Puttable Financial Instruments and Obligations Arising on 

Liquidation 

Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial 

Statements – Puttable Financial Instruments and Obligations Arising on Liquidation (endorsed by the


European Union) requires puttable instruments, and instruments that impose on the entity an obligation 

to deliver to another party a pro rata share of the net assets of the entity only on liquidation, to be 

classified as equity if certain conditions are met. The Group has not yet determined the potential impact 

of the amendments, which become mandatory for the Group’s 2009 consolidated financial statements, 

with retrospective application required. 

• Revised IFRS 3 Business Combinations (2008) 

118 

Revised IFRS 3 Business Combinations (2008) incorporates the following changes that are likely to be 

relevant to the Group’s operations: 

- The definition of a business has been broadened, which is likely to result in more acquisitions being 

treated as business combinations. 

- Contingent consideration will be measured at fair value, with subsequent changes therein 

recognised in profit or loss. 

- Transaction costs, other than share and debt issue costs, will be expensed as incurred. 

- Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss 

recognised in profit or loss. 

- Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate 

interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction 

basis. 

The Group has not yet determined the potential impact of the revised IFRS 3, which becomes mandatory 

for the Group’s 2010 consolidated financial statements. 

• Amended IAS 27 Consolidated and Separate Financial Statements (2008) 

Amended IAS 27 Consolidated and Separate Financial Statements (2008) requires accounting for 

changes in ownership interests by the Group in a subsidiary, while maintaining control, to be recognised 

as an equity transaction. When the Group loses control of a subsidiary, any interest retained in the 

former subsidiary will be measured at fair value with the gain or loss recognised in profit or loss. 

The amendments to IAS 27, which become mandatory for the Group’s 2010 consolidated financial 

statements, are not expected to have any material impact on the Group’s consolidated financial 

statements. 

• Amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations 

Amendment to IFRS 2 Share-based Payment – Vesting Conditions and Cancellations (endorsed by the 

European Union) clarifies the definition of vesting conditions, introduces the concept of non-vesting 

conditions, requires non-vesting conditions to be reflected in grant-date fair value and provides the 

accounting treatment for non-vesting conditions and cancellations. The amendments to IFRS 2, that 

will become mandatory for the Group’s 2009 consolidated financial statements, with retrospective 

application, are not expected to have any material impact on the Group’s consolidated financial 

statements. 

• IFRIC 15 Agreements for the Construction of Real Estate 

IFRIC 15 Agreements for the Construction of Real Estate concludes that revenues for real estate 

construction projects will have to be recognised using the completed contract method in many cases,


except for specific situations where the percentage of completion method of revenue recognition can 

be applied. This is the case when a contract relates to the sale of assets, but during the construction of 

these assets revenue recognition criteria are met on a continuous basis (in relation to the completed 

part of the project). IFRIC 15, which becomes mandatory for the Group’s 2009 consolidated financial 

statements, with retrospective application, is not expected to have any material impact on the Group’s 

consolidated financial statements. 

• IFRIC 16 Hedges of a Net Investment in a Foreign Operation 

IFRIC 16 Hedges of a Net Investment in a Foreign Operation discusses a number of issues in relation 

to hedging currency risks on foreign operations (net investment hedges). IFRIC 16 specifically confirms 

only the risk from differences between the functional currencies of the parent and the subsidiary can be 

hedged. Additionally, currency risks can only be hedged by every (direct or indirect) parent company, as 

long as the risk is only hedged once in the consolidated financial statements. IFRIC 16 also determines 

the hedge instrument of a net investment hedge can be held by every group company, except for foreign 

operation itself. The Group has not yet determined the potential impact of IFRIC 16, which becomes 

mandatory for the Group’s 2009 consolidated financial statements, with prospective application. 

• IFRIC 17 Distributions of Non-cash Assets to Owners 

IFRIC 17 Distributions of Non-cash Assets to Owners addresses the treatment of distributions in kind 

to shareholders. Outside the scope of IFRIC 17 are distributions in which the assets being distributed 

are ultimately controlled by the same party or parties before and after the distribution (common control 

transactions). A liability has to be recognised when the dividend has been appropriately authorised and 

is no longer at the discretion of the entity, to be measured at the fair value of the non-cash assets to be 

distributed. IFRIC 17, which becomes mandatory for the Group’s 2010 consolidated financial statements, 

with prospective application, is not expected to have any material impact on the Group’s consolidated 

financial statements. 

119 

• IFRIC 18 Transfers of Assets from Customers 

IFRIC 18 Transfers of Assets from Customers addresses the accounting by access providers for 

property, plant and equipment contributed to them by customers. Recognition of the assets depends on 

who controls it. When the asset is recognised by the access provider, it is measured at fair value upon 

initial recognition. The timing of the recognition of the corresponding revenue depends on the facts 

and circumstances. IFRIC 18, which becomes mandatory for the Group’s 2010 consolidated financial 

statements, with prospective application, is not expected to have any material impact on the Group’s 

consolidated financial statements. 

• Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and 

Separate Financial Statements – Cost of an Investment in a Subsidiary, Jointly-controlled 

Entity or Associate 

Amendments to IFRS 1 First-time Adoption of IFRSs and IAS 27 Consolidated and Separate Financial 

Statements – Cost of an Investment in a Subsidiary, Jointly-controlled Entity or Associate (endorsed by 

the European Union) revises, amongst others, the accounting for ‘pre-acquisition dividends’ received 

from participating interests. Those dividends should be recognised as revenue, but such dividends may


imply an indicator for the impairment of the participating interest. The amendment, which becomes 

mandatory for the Group’s 2009 consolidated financial statements, with prospective application, is not 

expected to have any material impact on the Group’s consolidated financial statements. 

• Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible 

Hedged Items 

Amendment to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items 

provides additional guidance concerning specific positions that qualify for hedging (‘eligible hedged 

items’). The Group has not yet determined the impact of the amendment to IAS 39, which becomes 

mandatory for the Group’s 2010 consolidated financial statements, with retrospective application. 

• Improvements to IFRSs (2008) 

Improvements to IFRSs (2008) (endorsed by the European Union) is a collection of minor improvements 

to existing standards. The Group has not yet determined the potential impact of this collection, which 

becomes mandatory for the Group’s 2009 consolidated financial statements. 

120


2. Segment reporting 

The segment reporting is based on two segment reporting formats. The primary reporting format 

represents the three business groups of the Group’s internal financial reporting, the secondary reporting 

format represents the Group’s two main geographical markets. 

Segment assets and liabilities include items directly attributable to a segment as well as those that can 

be allocated on a reasonable basis. 

Segment capital expenditures include the cost of acquiring property, plant and equipment and intangible 

assets. 

Inter-segment pricing is determined on an arm’s length basis. 

Business segments 

The Group is reporting three business segments (business groups). Each includes several business 

units: 

- The “Chemicals” business group includes the Inorganics, Chlor-alkali and PVC business units. 

- The “Specialities” business group includes the Fine Chemicals, Gelatin and Natural Derivatives 

business units. 

- The “Plastics Converting” business group includes the Profiles, Plastic Pipe Systems and 

Compounds business units. 

121 

Geographical segments 

The three business segments (business groups) operate worldwide, however mainly in two geographical 

areas, Europe and the USA. 

Segment revenue is based on the geographical location of customers, while segment assets and 

liabilities are based on the geographical location of the assets.


Chemicals 


122 

KEY DATA BY PRIMARY REPORTING SEGMENT 

Revenue (internal and external) 1,502.5 1,122.8 

Revenue (internal) 100.7 95.7 

Revenue 1,401.8 1,027.1 

Profit (+) / loss (-) from operations before non-recurring items (REBIT) 197.5 82.7 

Non-recurring items -15.0 -4.7 

Profit (+) / loss (-) from operations (EBIT) 182.5 78.0 

Return on revenue (REBIT/revenue) 14.1% 8.1% 

Finance costs - - 

Share of result of investments accounted for using the equity method 7.7 2.9 

Income tax expense - - 

Profit (+) / loss (-) for the period - - 

Segment assets 776.8 627.2 

Investments accounted for using the equity method 19.4 10.4 

Investments - - 

Deferred tax assets - - 

Cash and cash equivalents - - 

Other unallocated receivables - - 

Total Assets - - 

Segment liabilities 280.5 240.3 

Financial liabilities - - 

Deferred tax liabilities - - 

Equity - - 

Total Equity & Liabilities - - 

Capital expenditures: PP&E and intangible assets 29.1 39.5 

Amortisation and depreciation -40.9 -41.4 

Impairment losses on intangible assets and property, plant and equipment - - 

Number of employees at year end (headcount) 1,965 2,009 

Europe 


KEY DATA BY SECONDARY REPORTING SEGMENT 

Revenue by market 2,125.2 1,881.4 

Segment assets 1,470.2 1,376.3 

Segment liabilities 488.3 472.9 

Capital expenditures: PP&E and intangible assets 90.8 91.4 

The unallocated segment assets mainly include the office buildings and receivables within 

the holding companies. 

The unallocated segment liabilities comprise mainly the payables within those holding companies.


Specialities Plastics Converting Unallocated Tessenderlo Group 

2008 2007 2008 2007 2008 2007 2008 2007 

593.8 569.2 776.5 831.7 - - 2,872.8 2,523.7 

7.1 6.8 - 15.3 - - 107.8 117.8 

586.7 562.4 776.5 816.4 - - 2,765.0 2,405.9 

34.6 31.9 22.4 49.2 -15.4 -11.5 239.1 152.3 

8.2 -9.8 -19.5 -1.8 -0.6 51.4 -26.9 35.1 

42.8 22.1 2.9 47.4 -16.0 39.9 212.2 187.4 

5.9% 5.7% 2.9% 6.0% - - 8.6% 6.3% 

- - - - - - -21.6 -17.6 

3.8 3.1 - - - - 11.5 6.0 

- - - - - - -61.7 -47.1 

- - - - - - 140.4 128.7 

413.5 401.5 454.3 491.3 51.6 13.2 1,696.2 1,533.2 

15.6 13.6 - - 4.6 - 39.6 24.0 

- - - - 5.2 6.1 5.2 6.1 

- - - - 17.7 26.3 17.7 26.3 

- - - - 53.5 93.6 53.5 93.6 

- - - - 0.7 - 0.7 - 

- - - - - - 1,812.9 1,683.2 

103.2 109.9 101.0 122.9 33.7 33.3 518.4 506.4 

- - - - 348.1 337.4 348.1 337.4 

- - - - 44.4 37.2 44.4 37.2 

- - - - 902.0 802.2 902.0 802.2 

- - - - - - 1,812.9 1,683.2 

30.8 31.5 32.4 33.5 9.1 - 101.4 104.5 

-33.3 -40.8 -32.3 -34.8 -3.1 -2.8 -109.6 -119.8 

-6.4 -12.3 - - - -12.3 -6.4 

2,755 2,763 3,517 3,349 - - 8,237 8,121 

123 

USA Rest of the world Tessenderlo Group 

2008 2007 2008 2007 2008 2007 

296.7 260.2 343.1 264.3 2,765.0 2,405.9 

185.0 120.4 41.0 36.5 1,696.2 1,533.2 

23.1 27.3 7.0 6.2 518.4 506.4 

7.0 9.8 3.6 3.3 101.4 104.5


3. Acquisitions and disposals 

Acquisitions – Activities / Subsidiaries 

• In April 2008, Eurocell ltd, a UK subsidiary within the business unit Profiles, acquired the assets of 

Sprint 1233, formerly Plastmo Profiles Ltd (Northampton, UK). Taking over the interests of Plastmo 

will allow Eurocell to benefit from improved production efficiencies and economies of scale. 

In December 2008, Eurocell ltd acquired the assets and operations of Cavalok Building Products. 

Cavalok Building Products is the only manufacturer of BBA-accredited cavity closure systems 

made from 100% post-consumer recycled PVC-u. This acquisition will extend the Eurocell product 

offering and will help deliver significant operational efficiency benefits. 

As Plastmo and Cavalok were immediately integrated in the Eurocell operations, no separate 

reporting is maintained on their contributions to the profit of the Group, however in 2008 these are 

considered to have been immaterial. 

• In June 2008, Akiolis Group, a French subsidiary within the business unit Natural Derivatives, 

acquired SR Collecte sas and Collectoco sarl. In August 2008, Akiolis Group also acquired 

Recup’Food Sarl. These acquisitions will allow Akiolis Group to realise economies of scale. 

124 

These acquisitions by Akiolis Group did not have a significant contribution to the 2008 profit of the 

Group. If the acquisition date of SR Collecte sas, Collectoco sarl and Recup’Food Sarl had been 

1 January 2008, the impact on the revenue and profit of the Group would have been insignificant as 

well. 

• In September 2008, Tessenderlo Kerley acquired the assets, marketing and distribution channels of 

Agrochem (Izmir, Turkey). Agrochem has been a key distributor for Tessenderlo Kerley in the area 

for the past 14 years and has been manufacturing Tessenderlo Kerley plant nutrient solutions. 

This acquisition did not have a significant contribution to the 2008 profit of the Group. If the 

acquisition date had been 1 January 2008, the impact of this acquisition on the revenue and the 

profit of the Group would have been insignificant as well. 

• In October 2008, the Group reached an agreement with Nyloplast NV to take over all shares 

of its subsidiary Nyloplast Europe BV (‘s Gravendeel, the Netherlands). Nyloplast Europe BV 

manufactures large diameter plastic fittings for presureless pipe systems for the European market. 

The systems are used for draining sewage and rain water. This extension of the range of products 

and services will strengthen the position of the Plastic Pipe Systems business unit in Europe and 

further develop its strategy for growth. 

The acquisition of Nyloplast Europe BV did not yet have a significant impact on the 2008 revenue or 

profit of the Group. If the acquisition date had been 1 January 2008, the revenue of the Group would 

be higher by approximately 11.7 million EUR.


The table below summarises the impact of these agreements on the financial position of the Group: 

Pre-acquisition 

carrying 

amounts 

Fair value 

adjustments 

Recognised 

values on 

acquisition 

Property, plant and equipment 5.7 5.9 11.6 

Intangible assets 0.1 2.1 2.2 

Non-current assets 5.8 8.0 13.8 

Inventories 4.5 -0.8 3.7 

Trade and other receivables 4.2 - 4.2 

Cash and cash equivalents -1.6 - -1.6 

Current assets 7.1 -0.8 6.3 

Trade and other payables 5.0 - 5.0 

Current liabilities 5.0 0.0 5.0 

Non-current liabilities 0.7 1.4 2.1 

Net assets 7.2 5.8 13.0 

Goodwill on acquisition 5.1 

Negative goodwill on acquisition -1.2 

Consideration (paid)/received, satisfied in cash -16.9 

Cash acquired/(disposed) of -1.6 

Net cash (outflow)/inflow -18.5 

125 

The fair value adjustments performed at acquisition date are based on valuation studies performed 

as well internally as by external experts. The intangible assets at acquisition date mainly relate to the 

valuation of customer lists (note 12). 

Acquisitions – Investments accounted for using the equity method 

In October 2008 Tessenderlo Kerley acquired 30 % of the shares of Wolf Mountain Products LLC, Lindon, 

Utah (USA). Tessenderlo Kerley also has an option to purchase an additional 20 % interest in Wolf 

Mountain Products during the first half of 2014. Wolf Mountain Products offers a broad range of high 

quality bark and wood-based products used as soil amendments, ground covers and playground chips. 

This acquisition did not yet have a significant contribution to the 2008 profit of the Group. If the 

acquisition date would have been 1 January 2008, the impact on the profit of the Group would also have 

been insignificant.


The table below summarises the impact of this agreement on the financial position of the Group: 

Pre-acquisition 

carrying 

amounts 

Fair value 

adjustments 

Recognised 

values on 

acquisition 

Equity 2.4 8.0 10.4 

Share Group (30%) 0.7 2.4 3.1 

Goodwill on acquisition 0.0 

Consideration (paid)/received, satisfied in cash -3.1 

Cash acquired/(disposed) of 0.0 

Net cash (outflow)/inflow -3.1 

Disposals 

No disposals were made during 2008. 

126 

4. Other income and expenses 


Release of provisions 3.6 - 

Additions to provisions - - 

Research cost -14.3 -7.4 

Grants 0.3 0.1 

Depreciation -2.2 -2.3 

Gains on disposal of PP&E and intangible assets -0.4 0.2 

Write down debtors -2.7 -2.7 

Other -10.9 -0.1 

Total -26.6 -12.2 

“Other” mainly includes taxes other than income taxes.


5. Non-recurring items 


Gain on disposals 12.8 58.4 

Restructuring (incl. impairment losses) -18.2 -15.6 

Environmental provisions -14.2 -2.8 

Other income and expenses -7.3 -4.9 

Total -26.9 35.1 

The non-recurring items for 2008 show an expense of 26.9 million EUR (2007: income of 

35.1 million EUR). 

The gain on disposals mainly includes the sale of land in England. The land has been sold for 

5.7 million GBP, while the land had no carrying amount. The non-recurring result of this sale amounts 

to 7.1 million EUR. 

The impairment losses amount to 12.3 million EUR and are mainly related to property, plant and 

equipment of subsidiaries in the business group Plastics Converting (12.2 million EUR). 

On December 10th 2008, the environmental permit of Tessenderlo Chemie NV (Belgium) was extended 

for a period of 20 years. Tessenderlo Chemie NV committed itself to invest in a new production process 

and to find a durable solution to its environmental problems in Limburg (Belgium). As a consequence 

of these commitments additional discounted environmental provisions were recorded for an amount of 

14.5 million EUR. 

127 

Other income and expenses in 2008 relate to several incurred charges, including expenses as a 

consequence of acquisitions, provisions on receivables and exceptional charges which are not covered by 

insurance. 

The non-recurring items in 2007 mainly included the gain realised on the sale of Tessenderlo Davison 

Companies (TDC), a joint marketing venture with Davison Petroleum Products, (DDP), Ruston, United 

States. The non-recurring gain of this business disposal amounted to 52.0 million EUR. In addition, the 

sale of the subsidiary PB Gelatins France and the sale of land of Tessenderlo Kerley generated a nonrecurring 

gain of 4.2 million EUR. 

The restructuring provisions and expenses, as well as the environmental provisions, in 2007 mainly 

concerned the final phase of the Target 2007 restructuring plan (9.1 million EUR) in the business group 

Chemicals (7.5 million EUR) and the business unit Fine Chemicals (1.6 million EUR). 

The impairment losses in 2007 amounted to EUR 8.4 million EUR and were mainly related to property, 

plant and equipment in the business unit Fine Chemicals (3.9 million EUR) and the business unit Gelatin 

(2.6 million EUR).


6. Payroll and related benefits 

note 2008 2007 

Wages and salaries -286.3 -285.6 

Employer’s social security contributions -76.8 -77.8 

Other personnel costs -43.1 -31.1 

Contributions to defined contribution 

-3.8 -3.9 

plans 

Increase in liability for defined benefit 

23 -4.6 -8.3 

plans 

Movement in asset for defined benefit 

23 -0.5 -1.1 

plans 

Total -415.1 -407.8 

The average number of FTEs for 2008 amount to 7,878 (2007: 7,794). 

128


7. Additional information on operating expenses 

by nature 

Depreciation, amortisation and impairment losses are included in the following line items in the 

income statement in 2008: 

Depreciation 

and impairment 

losses on PP&E 

Amortisation and 

impairment losses on 

intangible assets 

Total 

Cost of sales -91.1 -3.8 -94.9 

Administrative expenses -9.8 - -9.8 

Sales and Marketing - -2.7 -2.7 

Other operating (income)/expenses -2.2 - -2.2 

Restructuring (incl. impairment losses) -12.3 - -12.3 

Total -115.4 -6.5 -121.9 

Total depreciation charges and impairment losses in 2008 amount to 124.4 million EUR (note 10 and 

12). Taking into account the effect of government grants in 2008 (note 10), the net depreciation charges 

amount to 121.9 million EUR. 

Depreciation, amortisation and impairment losses are included in the following line items in the 

income statement in 2007: 

129 

Depreciation 

and impairment 

losses on PP&E 

Amortisation and 

impairment losses on 

intangible assets 

Total 

Cost of sales -104.4 -4.1 -108.5 

Administrative expenses -9.1 - -9.1 

Other operating income/(expenses) -2.1 - -2.1 

Restructuring (incl. impairment losses) -6.5 - -6.5 

Total -122.1 -4.1 -126.2


8. Finance income and expense 

Finance expense: 


Interest expense on financial liabilities measured at amortised 

-15.2 -17.7 

cost 

Foreign exchange losses -12.1 -5.0 

Other -2.5 -1.2 

Total -29.8 -23.9 

Finance income: 


Interest income from cash and cash equivalents 2.8 4.2 

Dividend income, non-consolidated companies 0.4 0.2 

Revaluation to fair value of derivatives 5.0 1.9 

Total 8.2 6.3 

130 

The net interest expense of 12.4 million EUR (2007: 13.5 million EUR) decreased by 1.1 million EUR 

thanks to the further decrease of the average outstanding net financial debt in 2008 compared to 2007 

(see note 22).


9. Income tax expense 


RECOGNISED IN THE INCOME STATEMENT 

Current tax expense -49.1 -50.3 

Adjustment current tax expense previous periods 1.1 - 

Deferred tax expense -13.7 3.2 

Total income tax expense in the income statement -61.7 -47.1 


Less share of result of associates, net of taxes 11.5 6.0 

Profit (+) / loss (-) before tax and before result from associates 190.6 169.8 

Effective tax rate 32.4% 27.7% 

RECONCILIATION OF EFFECTIVE TAX RATE 

Profit (+) / loss (-) before tax and before results from 

190.6 169.8 

associates 

Theoretical tax rate (*) 33.1% 35.2% 

Expected income tax at the theoretical tax rate -63.1 -59.9 

131 

Difference between theoretical and effective tax expenses 1.4 12.8 

Adjustment on deferred taxes 0.1 -4.7 

Change in tax rates 0.1 -1.4 

Impairment (-) / reversal of an impairment (+) of a recognised 

deferred tax asset 

- -3.3 

Adjustment on tax expenses 1.3 17.5 

Non deductible expenses -2.8 -2.8 

Special tax regimes 5.7 4.8 

Use or recognition of tax losses / tax credits not previously 

0.4 18.1 

recognised 

Tax losses for which no deferred tax asset has been recorded -5.6 -1.2 

Impact of tax consolidation regimes - - 

Adjustment current tax expense previous periods 1.1 - 

Other 2.5 -1.4 

(*) Theoretical aggregated weighted tax rate of all group companies 

The impact of the change in tax rates amounts to 0.1 million EUR in 2008, which is related to the change 

in tax rates in Luxembourg. The impact in 2007 amounted to -1.4 million EUR and was related to the 

change in tax rates, announced or already effective, in Germany, Italy and the United Kingdom.


10. Property, plant and equipment 

Land and 

buildings 

Plant, 

machinery 

and 

equipment 

Furniture 

and 

vehicles 

Under 

construction 

Total 

ACQUISITION COST 

At 1 January 2008 416.7 1,860.4 110.7 23.0 2,410.8 

. acquisitions through 

5.5 5.9 0.2 - 11.6 

business combinations 

(note 3) 

. capital expenditure 7.7 42.4 10.6 33.5 94.2 

. sales and disposals -1.6 -14.8 -4.8 -0.6 -21.8 

. transfers 0.6 23.3 1.3 -26.5 -1.3 

. translation differences -5.8 -43.0 -1.0 -0.3 -50.1 

At 31 December 2008 423.1 1,874.2 117.0 29.1 2,443.4 

132 

DEPRECIATION AND IMPAIRMENT LOSSES 

At 1 January 2008 -198.1 -1,431.1 -93.2 0.0 -1,722.4 


- - - - 0.0 


. depreciation -13.5 -84.5 -7.7 - -105.7 

. sales and disposals 1.0 13.7 4.6 - 19.3 

. impairment losses -1.4 -10.7 -0.1 - -12.2 

. transfers 0.5 0.3 -0.2 - 0.6 

. translation differences - 36.4 0.6 - 37.0 

At 31 December 2008 -211.5 -1,475.9 -96.0 0.0 -1,783.4 

CARRYING AMOUNTS BEFORE GOVERNMENT GRANTS 

Net government grants - -8.0 - - -8.0 

CARRYING AMOUNTS 

At 1 January 2008 218.6 418.7 17.5 23.0 677.8 

At 31 December 2008 211.6 390.3 21.0 29.1 652.0


Land and 

buildings 

Plant, 

machinery 

and 

equipment 

Furniture 

and 

vehicles 

Under 

construction 

Total 


At 1 January 2007 415.9 1,826.8 109.4 19.4 2,371.5 


- 6.5 - - 6.5 

business 

combinations 

. capital expenditure 10.0 44.1 8.9 35.6 98.6 

. sales and disposals -5.4 -18.4 -7.0 -0.3 -31.1 

. transfers 1.7 27.9 0.7 -31.2 -0.9 

. translation differences -5.5 -26.5 -1.3 -0.5 -33.8 

At 31 December 2007 416.7 1,860.4 110.7 23.0 2,410.8 

DEPRECIATION AND IMPAIRMENT LOSSES 

At 1 January 2007 -188.7 -1,362.9 -93.3 0.0 -1,644.9 


- - - - 0.0 


. depreciation -14.2 -94.4 -7.1 - -115.7 

. sales and disposals 4.4 13.0 6.2 - 23.6 

. impairment losses -1.0 -5.4 - - -6.4 

. transfers - 0.6 - - 0.6 

. translation differences 1.4 18.0 1.0 - 20.4 

At 31 December 2007 -198.1 -1,431.1 -93.2 0.0 -1,722.4 

133 

CARRYING AMOUNTS BEFORE GOVERNMENT GRANTS 

Net government grants - -10.6 - - -10.6 


At 1 January 2007 227.2 463.9 16.1 19.4 726.6 

At 31 December 2007 218.6 418.7 17.5 23.0 677.8 

The capital expenditure amounts to 94.2 million EUR and is broken down per business segment, in the 

“Segment reporting” section (note 2). 

An amount of 11.6 million EUR is disclosed as acquisition through business combinations. The detailed 

information is disclosed in “Acquisitions and disposals” (note 3). 

Impairment losses for an amount of 12.2 million EUR were recognised during the second quarter of 

2008 and are mainly related to impairment losses recognised on the property, plant and equipment of 

subsidiaries in the business group Plastics Converting. The market for the related companies’ products 

continued to deteriorate in 2008 as a consequence of the current economic difficulties, which in turn 

caused the Group to reevaluate its projections and views of the market’s ability to improve. 

The recoverable amount of these assets has been determined based on value in use calculations, and 

was compared to the fair value of these assets.


The impairment losses of 2007 were recorded on property, plant and equipment in the business unit 

Fine Chemicals and the business unit Gelatin. The recoverable amount has been determined based on 

value in use calculations. 

In 2007, the Flemish government granted Tessenderlo Chemie NV and Limburgse Vinyl Maatschappij NV 

12.5 million EUR for large-scale environmental investments. The remaining net government grant as 

per 31 December 2008 amounts to 8.0 million EUR (2007: 10.6 million EUR). 

No property, plant and equipment is pledged as security for liabilities. 

Assets for an amount of 0.7 million EUR are classified as non-current assets held for sale (note 19). 

The Group leases property, plant and equipment under a number of finance lease agreements. At the 

end of each of the leases, the Group has the option to purchase the equipment at a beneficial price. As 

per 31 December 2008, the net carrying amount of leased property, plant and equipment amounted to 

4.8 million EUR (2007: 5.8 million EUR). For an overview of the lease payables, we refer to note 22. 

The finance leases mainly consist of land and buildings (4.8 million EUR). 

134 

11. Goodwill 


At 1 January 2008 64.6 

. acquisitions through business combinations 5.1 

. sales and disposals - 

. transfers 0.7 

. translation differences -6.5 

At 31 December 2008 63.9 

IMPAIRMENT LOSSES 

At 1 January 2008 -27.4 

. acquisitions through business combinations - 


. transfers - 

. translation differences 1.8 

At 31 December 2008 -25.6 


As per 1 January 2008 37.2 

As per 31 December 2008 38.3



At 1 January 2007 69.5 

. acquisitions through business combinations 0.2 


. transfers - 

. translation differences -5.1 

At 31 December 2007 64.6 

IMPAIRMENT LOSSES 

At 1 January 2007 -29.4 

. acquisitions through business combinations - 


. transfers - 

. translation differences 2.0 

At 31 December 2007 -27.4 


As per 1 January 2007 40.1 

As per 31 December 2007 37.2 

During the fourth quarter of 2008, the Group completed its annual impairment test for goodwill and 

concluded, based on the assumptions below, that no impairment charge was deemed necessary. 

The Group cannot foresee whether an event that triggers impairment will occur, when it will occur or 

how it will affect the asset values reported. The Group believes that all of its estimates are reasonable. 

They are consistent with the internal reporting and reflect management’s best estimates. 

135 

Goodwill only accounts for approximately 2.1 % of the Group’s total assets as at 31 December 2008 

(2007: 2.2 %). The impairment testing on goodwill, relies on a number of critical judgements, estimates 

and assumptions. 

Goodwill has been tested for impairment on company level or at the most relevant level based on valuein-use 

calculations. The key judgements, estimates and assumptions used in these calculations are as 

follows: 

- The cash flow projection of the first year is based on the current year financial budget (2009). 

- For the next four years (2010-2013), cash flow projections used are based on a long term plan for 

the coming 5 years. 

- In order to calculate the terminal value, the data of the fifth year are extrapolated by using 

simplified assumptions such as constant quantities sold, combined with constant costs. 

- Projections are made in the functional currency of the company and are discounted at the company 

level Weighted Average Cost of Capital. 

Although the Group believes that its judgements, assumptions and estimates are appropriate, actual 

results may differ from these estimates under different assumptions or conditions.


12. Intangible assets 

USEFUL LIFE 

DEVELOPMENT 

CONCESSIONS, 

PATENTS, 

LICENSES 

SOFTWARE 

CUSTOMER 

LISTS 

OTHER 

OTHER 

TOTAL 

FINITE 

INDEFINITE 

136 

ACQUISITION VALUE 

At 1 January 2008 3.7 27.8 12.5 10.6 19.0 1.8 75.4 

. acquisitions through business - - - 2.2 - - 2.2 

combinations (note 3) 

. capital expenditure - 3.9 2.1 1.0 0.2 - 7.2 

. sales and disposals - - - - - - 0.0 

. transfers - 3.3 0.3 -0.2 -3.4 - 0.0 

. translation differences - 0.3 -1.0 -0.4 0.7 - -0.4 

At 31 December 2008 3.7 35.3 13.9 13.2 16.5 1.8 84.4 

AMORTISATION AND IMPAIRMENT LOSSES 

At 1 January 2008 -1.1 -19.4 -9.4 -3.8 -4.8 0.0 -38.5 

. acquisitions through business - - - - - - 0.0 

combinations 

. amortisation -0.7 -2.1 -1.5 -1.0 -1.2 - -6.5 

. sales and disposals - - - - - - 0.0 

. transfers - -0.8 -0.2 - 1.0 - 0.0 

. translation differences - -0.1 0.6 0.2 -0.2 - 0.5 

At 31 December 2008 -1.8 -22.4 -10.5 -4.6 -5.2 0.0 -44.5 


At 1 January 2008 2.6 8.4 3.1 6.8 14.2 1.8 36.9 

At 31 December 2008 1.9 12.9 3.4 8.6 11.3 1.8 39.9


USEFUL LIFE 

DEVELOPMENT 

CONCESSIONS, 

PATENTS, 

LICENSES 

SOFTWARE 

CUSTOMER LISTS 

OTHER 

OTHER 

TOTAL 

FINITE 

INDEFINITE 

ACQUISITION VALUE 

At 1 January 2007 3.7 22.2 12.2 6.8 9.8 2.1 56.8 

. acquisitions through business - 3.6 - 2.4 9.7 - 15.7 

combinations 

. capital expenditure - 2.5 0.3 1.5 1.2 - 5.5 

. sales and disposals - -0.4 - - - - -0.4 

. transfers - - 0.3 - - - 0.3 

. translation differences - -0.1 -0.3 -0.1 -1.7 -0.3 -2.5 

At 31 December 2007 3.7 27.8 12.5 10.6 19.0 1.8 75.4 

137 

AMORTISATION AND IMPAIRMENT LOSSES 

At 1 January 2007 -0.2 -19.0 -8.2 -3.3 -4.2 0.0 -34.9 

. acquisitions through business - - - - - - 0.0 

combinations 

. amortisation -0.7 -0.8 -1.4 -0.3 -0.9 - -4.1 

. sales and disposals - 0.2 - - - - 0.2 

. transfers -0.2 0.2 - - - - 0.0 

. translation differences - - 0.2 -0.2 0.3 - 0.3 

At 31 December 2007 -1.1 -19.4 -9.4 -3.8 -4.8 0.0 -38.5 


At 1 January 2007 3.5 3.2 4.0 3.5 5.6 2.1 21.9 

At 31 December 2007 2.6 8.4 3.1 6.8 14.2 1.8 36.9 

The capital expenditure amounts to 7.2 million EUR and is broken down per business segment, in the 

“Segment reporting” section (note 2). 

An amount of 2.2 million EUR is disclosed as acquisition through business combinations. The detailed 

information is disclosed in “Acquisitions and disposals” (note 3). 

The “other” intangible assets with finite useful lives consist mainly of two non-competition agreements, 

know how, a product label and land-use rights. The non-compete agreements, the product label and the 

know-how are being amortised on a straight-line basis over 5-15 years.


The intangible assets with indefinite useful life relate to trademarks which are considered to have an 

indefinite life unless plans would exist to discontinue the related activity. The intangible assets with 

indefinite useful life have been tested for impairment and no impairment charge was deemed necessary. 

No intangible assets are pledged as security for liabilities. 

13. Investments accounted for using the equity 

method 

Investments accounted for using the equity method consist of joint ventures and associates. 

The joint ventures of the Group are: 

Ownership 

Country 2008 2007 

138 

Jupiter Sulphur US 50% 50% 

Zéoline Belgium 50% 50% 

Siram France 50% 50% 

SH Capital (Groupe Fiso) France 50% 50% 

Ferso Bio (Groupe Fiso) France 50% 50% 

Fiso Developpement (Groupe Fiso) France 50% 50% 

Solagra (Groupe Fiso) France 50% 50% 

Labrousse (Groupe Fiso) France 50% 25% 

Ispac (Groupe Fiso) France 50% 25% 

MPR Middle East Bahrain 50% - 

The associates of the Group are: 

Ownership 

Country 2008 2007 

Alkemin US 49.50% 49.50% 

T-Power Belgium 33.33% - 

Wolf Mountain Products US 30% - 

Bonnet (Groupe Fiso) France 25% 25% 

Michel (Groupe Fiso) France 25% 25%


The carrying amount of the investments accounted for using the equity method is as follows: 


Alkemin 0.0 0.0 

Groupe Fiso 14.8 12.8 

Jupiter Sulphur 13.5 7.0 

MPR Middle East 0.1 - 

Siram 0.8 0.9 

T-Power 4.6 - 

Wolf Mountain Products 2.8 - 

Zéoline 3.0 3.3 

Total 39.6 24.0 

Summary financial information on investments accounted for using the equity method at 100 percent: 


Current assets 123.6 56.7 

Non-current assets 141.6 48.3 


Non-current liabilities 108.0 21.9 

Revenue 121.0 105.8 


Profit for the period (+) / loss (-) attributable to equity holders 23.0 12.0 

139 

The above financial information includes results of the new associates T-Power and Wolf Mountain 

Products as from December 2008. The results of MPR Middle East are insignificant and are included as 

from January 2008. 

14. Investments 


Investments in equity securities 4.5 5.6 

Cash guarantees / deposits 0.7 0.5 

Total 5.2 6.1 

Investments in equity securities 2008 2007 

TC Nederland, Netherlands 0.8 0.8 

Indaver, Belgium 0.6 0.6 

TC Espana, Spain 0.6 0.6 

GLOBE International, Belgium 0.5 0.5 

LVM United Kingdom Ltd, United Kingdom 0.2 0.2 

Polycoop, Argentina - 1.1 

Ashdec Umwelt, Austria 0.4 - 

Other 1.4 1.8 

Total 4.5 5.6 

The investments in unquoted companies are measured at cost as their fair value can not be reliably 

determined.


15. Deferred tax assets and liabilities 

ASSETS LIABILITIES NET 

2008 2007 2008 2007 2008 2007 

Property, plant & equipment 5.5 3.5 -31.1 -31.0 -25.6 -27.5 

Goodwill 1.4 1.7 - - 1.4 1.7 

Intangible assets 1.4 2.3 - - 1.4 2.3 

Inventories 2.4 2.7 -8.3 -1.9 -5.9 0.8 

Receivables - 0.1 - - 0.0 0.1 

Derivative financial instruments - - -0.1 -0.2 -0.1 -0.2 

Other current assets 0.8 0.5 - - 0.8 0.5 

Employee benefits 3.1 4.9 -3.2 -3.9 -0.1 1.0 

Provisions 3.4 4.0 -16.2 -15.5 -12.8 -11.5 

Other items - 0.1 -0.3 - -0.3 0.1 

Losses carried forward 26.3 33.6 - - 26.3 33.6 

Impairment of deferred tax assets -11.8 -11.8 - - -11.8 -11.8 

Gross deferred tax assets / (liabilities) 32.5 41.6 -59.2 -52.5 -26.7 -10.9 

Set off of tax -14.8 -15.3 14.8 15.3 

140 

Net deferred tax assets / (liabilities) 17.7 26.3 -44.4 -37.2 -26.7 -10.9 

All movements of deferred tax assets and deferred tax liabilities are recorded through the income 

statement, except for conversion differences (-0.7 million EUR in 2008) and the existing deferred tax 

assets and deferred tax liabilities at date of acquisitions (-1.4 million EUR in 2008). 

On 31 December 2008, a deferred tax liability of 18.6 million EUR (2007: 15.8 million EUR) relating 

to undistributed reserves within the subsidiaries of the Group has not been recognised because 

management believes that this liability will not be incurred in the foreseeable future. 

Tax losses carried forward on which no deferred tax asset is recognised amount to 45.7 million EUR 

(2007: 78.8 million EUR). These tax losses have an indefinite life. Deferred tax assets have not been 

recognised on these items because it is not probable that future taxable profits (within the next 5 years) 

will be available against which the unused tax losses can be utilised.


16. Trade and other receivables 


Non-current trade and other receivables 

Trade receivables 0.7 0.2 

Gross trade receivables 0.7 0.2 

Amounts written off - - 

Other receivables 2.2 5.1 

Prepayments - - 

Receivables from related parties - - 

Assets related to employee benefit schemes 14.5 10.2 

Total 17.4 15.5 


Current trade and other receivables 



Amounts written off -14.5 -13.1 


Prepayments 0.6 0.9 

Receivables from related parties 9.1 0.3 

Total 469.5 424.0 

141 

Receivables from related parties concern receivables on joint-ventures and associates (note 30). 

17. Inventories 


Consumables 132.3 95.1 

Work in progress 23.2 21.4 

Finished goods 274.3 184.3 

Goods purchased for resale 43.9 39.1 

Total 473.7 339.9 

There are no inventories pledged for security. 

The cost of inventories recognised as an expense in 2008, amounts to 1,414.7 million EUR 

(2007: 1,078.3 million EUR), included in cost of sales. 

The carrying amount of inventory, which was set at net realisable value as per year-end 2008 amounts to 

146.1 million EUR (2007: 38.0 million EUR). An amount of 22.7 million EUR was expensed in 2008 

(2007: 3.7 million EUR) of which 19.4 million EUR relates to an inventory write-off during the fourth quarter 

of 2008. This inventory write-off was mainly the consequence of the strong decrease of sales prices in the 

beginning of 2009. 

In 2008 an insignificant income was recognised as a reverse of a write-off on inventories.


18. Cash and cash equivalents 


Term accounts 0.5 0.2 

Current accounts 53.0 93.4 

Cash in hand - - 

Total 53.5 93.6 

19. Non-current assets held for sale 


Non-current assets held for sale 0.7 - 

The non-current assets held for sale at 31 December 2008 include the land and buildings of two sites of 

a subsidiary in the Business Group Plastics Converting. Following a restructuring of its activities, these 

assets remain unused and are set for sale. 

142


20. Equity 

Reconciliation of movement in equity 

Issued capital 

Share premium 

Other reserves 

Translation 

reserves 

Negative goodwill 

Retained earnings 

Equity attributable 

to equity holders 

of the Group 

Minority interest 

Total Equity 

Balance at 1 January 2007 136.0 36.5 238.9 -5.6 0.4 303.3 709.5 2.2 711.7 

Total recognised income and 

- - - -12.4 - 128.9 116.5 -0.2 116.3 

expense 

Shares issued 1.0 5.5 - - - - 6.5 - 6.5 

Dividends paid to shareholders - - - - - -33.5 -33.5 - -33.5 

Share based payments - - 1.2 - - - 1.2 - 1.2 

Other movements - - 16.1 - - -16.1 0.0 - 0.0 

Balance at 31 December 2007 137.0 42.0 256.2 -18.0 0.4 382.6 800.2 2.0 802.2 

Balance at 1 January 2008 137.0 42.0 256.2 -18.0 0.4 382.6 800.2 2.0 802.2 

Total recognised income and 

- - - -8.8 - 140.5 131.7 -0.1 131.6 

expense 

Shares issued 1.0 1.3 - - - - 2.3 - 2.3 

Dividends paid to shareholders - - - - - -35.0 -35.0 - -35.0 

Share based payments - - 0.8 - - - 0.8 - 0.8 

Other movements - - 82.8 - - -82.8 0.0 0.1 0.1 

Balance at 31 December 2008 138.0 43.3 339.8 -26.8 0.4 405.3 900.0 2.0 902.0 

143 

Issued capital and share premium 

Ordinary shares 


On issue at 1 January 27,626,444 27,419,876 

Issued for cash at 4 September 2007 206,568 

Issued for cash at 1 September 2008 86,844 

On issue at 31 December – fully paid 27,713,288 27,626,444 

The number of shares comprised 7,602,211 registered shares (2007: 7,664,192) and 20,111,077 ordinary 

shares (2007: 19,962,252). The shares are without nominal value. 

Translation reserves 

The translation reserves comprise all foreign exchange differences arising from the translation of the 

financial statements of foreign operations. 

Dividends 

After the balance sheet date, the Board of Directors will propose to the shareholders at the Annual 

Shareholders’ meeting of 2 June 2009, to approve a dividend distribution of 36.9 million EUR or a net 

dividend per share of 1.00 EUR. The dividend has not been accounted for.


21. Earnings per share 

Basic earnings per share 

The calculation of the basic earnings per share is based on the profit attributable to ordinary 

shareholders and the weighted average number of ordinary shares outstanding during the year. 

The weighted average number of ordinary shares and the earnings per share are calculated as follows: 


Number of ordinary shares at 1 January 27,626,444 27,419,876 

Effect of shares issued 28,789 66,964 

Weighted average number of ordinary shares 27,655,233 27,486,840 

Profit (+) / loss (-) attributable to equity holders of the Group 

140.5 128.9 

(in million EUR) 

Basic earnings per share (in EUR) 5.08 4.69 

Diluted earnings per share 

144 

The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders 

and the diluted weighted average number of ordinary shares outstanding during the year. 

The weighted average number of ordinary shares (diluted) and the diluted earnings per share are 

calculated as follows: 


Weighted average number of ordinary shares at 31st December 27,655,233 27,486,840 

Effect of share option on issue 6,622 35,898 

Diluted weighted average number of ordinary shares at 31st December 27,661,855 27,522,738 

Profit (+) / loss (-) attributable to equity holders 

140.5 128.9 

of the Group (in million EUR) 

Diluted earnings per share (in EUR) 5.08 4.68 

22. Financial liabilities 


Non-current financial liabilities 96.7 122.6 

Current financial liabilities 251.4 214.8 

Total financial liabilities 348.1 337.4 

Cash and cash equivalents -53.5 -93.6 

Net financial liabilities 294.6 243.8


The net debt equity ratio at the end of 2008 is 32.7 % (year end 2007: 30.4 %). 


Non-current financial liabilities 

Lease payables 1.9 2.6 

Credit institutions 94.8 120.0 

Total 96.7 122.6 

Terms and debt repayment schedule 2008: 

other 

currencies 

in EUR 

in EUR Total Rate (%) 

Effective 

rate (%) 

Maturity 

Credit institutions - 20.0 floating 3.59 June ‘10-’13 

Credit institutions - 40.0 3.368 (fixed) - Oct ‘10-’13 

Credit institutions - 30.0 3.65 (fixed) - Dec ‘10-’12 

Credit institutions - 4.8 floating 0-4.5 ‘10-’15 

Lease payables - 1.9 5,8 (fixed) - ‘10-’16 

Total 0.0 96.7 

Total: equivalent in EUR 0.0 96.7 96.7 

145 

Terms and debt repayment schedule 2007: 

other 

currencies 

in EUR 

in EUR Total Rate (%) 

Effective 

rate (%) 

Maturity 

Credit institutions - 25.0 floating 5.18 June ‘09-’13 

Credit institutions - 50.0 3.368 (fixed) - Oct ‘09-’13 

Credit institutions - 40.0 3.65 (fixed) - Dec ‘09-’12 

Credit institutions 0.8 4.2 floating 0-4.5 ‘09-’15 

Lease payables - 2.6 5.8 (fixed) - ‘08-’16 

Total 0.8 121.8 

Total: equivalent in EUR 0.8 121.8 122.6 

Some covenants like balance sheet or interest coverage ratios or coverage of net debt by EBITDA may 

apply to long term debt and medium term facilities. All ratios have been respected in 2008. 


Current financial liabilities 

Current portion long term financial liabilities 25.0 25.0 

Lease payable within 1 year 0.1 0.1 

Credit institutions and commercial paper 226.3 189.7 

Total 251.4 214.8


Of the current financial liabilities per 31 December 2008, 71.6 million EUR (2007: 51.6 million EUR) are 

represented by treasury bills (commercial paper) issued by Tessenderlo Finance (25.8 million EUR), a 

Belgian subsidiary and by Tessenderlo Nl Holding (45.8 million EUR), a Dutch subsidiary. The interest 

rate on this commercial paper amounts from Euribor +0.10% to Euribor +0.17%, depending on the 

duration of the loan. 

The Group uses short-term credit lines with credit institutions for the remaining part of the financing. 

Analysis of non-current and current financial liabilities by currency (2008): 

EUR USD GBP Others Total 

Current financial liabilities (*) 211.8 22.0 15.0 2.6 251.4 

Non-current financial liabilities 96.7 - - - 96.7 

Total financial liabilities 308.5 22.0 15.0 2.6 348.1 

In percentage of total financial liabilities 88.62% 6.32% 4.31% 0.75% 100.00% 

Analysis of non-current and current financial liabilities by currency (2007): 

EUR USD GBP Others Total 

146 

Current financial liabilities (*) 180.2 22.8 3.7 8.1 214.8 

Non-current financial liabilities 121.8 - - 0.8 122.6 

Total financial liabilities 302.0 22.8 3.7 8.9 337.4 

In percentage of total financial liabilities 89.51% 6.76% 1.10% 2.64% 100.00% 

(*) Part of these loans are denominated in EUR and afterwards swapped in GBP (see also note 26). The 

original loan remains in EUR. 

Terms and repayment schedule for finance lease contracts for 2007 and 2008: 

Lease 

payables 


Interest 


Principal 


Lease 

payables 

2007 

Interest 

2007 

Principal 

2007 

Less than one year 0.2 0.1 0.1 0.3 0.2 0.1 

Between one and five years 1.9 0.2 1.7 2.5 0.3 2.2 

More than five years 0.2 0.0 0.2 0.5 0.1 0.4 

Total 2.3 0.3 2.0 3.3 0.6 2.7


23. Employee benefits 

The provision for early retirement and defined benefit pension plans recognised in the balance sheet is 

as follows: 

Early 

retirement 

provision 

Defined benefit 

pension plan 

Total 

Balance at 1 January 2008 16.8 29.6 46.4 

Additions 0.6 1.6 2.2 

Use of provision - -0.3 -0.3 

Reversal of provision -4.6 -5.3 -9.9 

Translation differences - -0.3 -0.3 

Transfers 2.8 - 2.8 

Balance at 31 December 2008 15.6 25.3 40.9 

The entity’s accounting policy for recognising actuarial gains and losses 

The recognition of actuarial gains and losses is determined separately for each defined benefit plan. 

All actuarial gains and losses as at 1 January 2004, the date of transition to IFRSs, were recognised. All 

actuarial gains and losses subsequent to 1 January 2004 exceeding a corridor of 10 % of the higher of 

the present value of the defined benefit obligations and the fair value of plan assets are recognised in 

the income statement over the expected average remaining working lives of employees participating in 

the plan. Otherwise, the actuarial gain or loss is not recognised. 

147 

A general description of the type of plan 

• Employee Benefits 

These provisions are recorded to cover the post employment benefits and cover the pension plans and 

other benefits in accordance with local practices and conditions, following an actuarial calculation taking 

into account the financing of insurance companies and other pension funds. The most important pension 

plans are located in Belgium, the Netherlands, the United States of America, the United Kingdom, 

Germany and Italy. 

• Defined contribution plans 

The defined contribution pension plans are plans for which the company pays pre-determined 

contributions to a legal entity or a separate fund, in accordance with the settings of the plans. The 

company’s legal or constructive obligation is limited to the amount contributed. The contributions are 

recognised as an expense in the income statement as incurred and are included in “Payroll and related 

benefits” (note 6). 

• Defined benefit plans 

These plans are financed externally by pension funds or insurance companies. Independent actuaries 

perform an actuarial valuation on a regular basis. All actuarial gains and losses as at 1 January 2004, 

the date of transition to IFRSs, were recognised.


The amounts recognised in the balance sheet are as follows: 

2008 2007 2006 2005 2004 

Present value of wholly funded obligations 78.9 83.7 93.2 77.8 50.3 

Present value of partially funded obligations 71.2 75.4 76.2 92.3 94.4 

Present value of wholly unfunded obligations 18.0 18.9 17.3 19.4 18.2 

Total present value of obligations 168.1 178.0 186.7 189.5 162.9 

Fair value of plan assets 147.3 161.7 167.6 159.1 135.8 

Deficit 20.8 16.3 19.1 30.4 27.1 

Unrecognised actuarial gains (losses) -10.0 3.1 -2.5 -13.0 -3.1 

Net liability 10.8 19.4 16.6 17.4 24.0 

Unrecognised in % of funded obligations 5.95% -1,74% 1,34% 6,86% 1,90% 

Unrecognised in % of plan assets 6.79% -1.92% 1.49% 8.17% 2.28% 

Amounts in the balance sheet: 

Liabilities 25.3 29.6 29.4 29.7 28.7 

Assets (note 16) 14.5 10.2 12.8 12.4 4.7 

Net liability 10.8 19.4 16.6 17.3 24.0 

148 

The amounts recognised in the income statement are as follows: 


Current service cost 6.0 5.8 

Interest cost 9.0 9.1 

Expected return on plan assets -9.5 -9.5 

Past service cost (benefit) -0.4 4.0 

Total, included in ‘payroll and related benefits’ (note 6) 5.1 9.4 

The past service cost in 2007 was mainly related to a plan settlement in a US subsidiary, a plan 

curtailment in the Italian subsidiaries and a change in French law concerning employee benefits. 

These items are presented under non-recurring items. 

The net periodic pension cost is included in the following line items of the income statement: 


Cost of sales 3.0 3.5 

Distribution expenses 0.1 0.1 

Sales and marketing expenses 0.7 1.0 

Administrative expenses 1.3 0.8 

Other operating income/(expenses) - - 

Non-recurring items, net - 4.0 

Total 5.1 9.4


Changes in the present value of the defined benefit obligation are as follows: 


Opening defined benefit obligation 178.0 186.7 

Change in scope of consolidation - 4.0 

Current service cost 7.3 7.2 

Past service cost - 2.1 

Interest cost 9.0 9.1 

Actuarial losses (gains) -11.1 -10.3 

Exchange differences on foreign plans -5.6 -3.0 

Settlement - -7.7 

Benefits paid -9.5 -10.1 

Closing defined benefit obligation 168.1 178.0 

Changes in the fair value of plan assets are as follows: 


Opening fair value of plan assets 161.7 167.6 

Change in scope of consolidation - 0.7 

Expected return 9.5 9.5 

Actuarial gains and (losses) -21.9 -4.1 

Contributions by employee 1.3 1.3 

Contributions by employer 13.9 7.7 

Exchange differences on foreign plans -7.7 -3.2 

Settlement - -7.7 

Benefits paid -9.5 -10.1 

Closing fair value of plan assets 147.3 161.7 

149 

The expected rates of return on individual categories of plan assets are determined by reference to 

relevant indices. The overall expected rate of return is calculated by weighting the individual rates in 

accordance with the anticipated balance in the total investment portfolio. 

The actual return on plan assets in 2008 and 2007 was -15.1 million EUR and 5.2 million EUR 

respectively. 

The Group expects to contribute 9.2 million EUR to its defined benefit pension plans in 2009. 

The major categories of plan assets as a percentage of total plan assets are as follows: 


Equities 20% 26 % 

Fixed interest investments 11% 12 % 

Cash and deposits 11% 10 % 

Property 3% 2 % 

Insurance contracts 55% 50 % 

Total 100% 100%


The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) are: 


Discount rate at 31 December 6.1% 5.3 % 

Expected return on plan assets at 31 December 5.8% 5.7 % 

Future salary increases 3.4% 3.2 % 

Termination benefits (pre-retirement plans, other termination obligations) 

These benefits arise as a result of the company’s decision to terminate the employment of an employee 

or group of employees before the normal retirement date or of an employee’s decision to accept 

voluntary redundancy in exchange for those benefits. These benefits are accrued for at the moment of 

notification. 

Share based payments 

150 

A warrant plan has been created in order to increase the loyalty and motivation of the Group’s senior 

management. The plan gives senior management the opportunity to accept warrants which gives them 

the right to subscribe to shares. The Board of Directors yearly determines the list of beneficiaries. There 

exist no conditions on the number of years of service, however the beneficiaries may not have resigned 

or been dismissed (and serving their notice), except for persons who retire or take pre-retirement. 

The exercise price of the warrant equals the lower of the average market price of the underlying shares 

in the 30 trading days preceding the offer date or the market price on the last day preceding the offer 

date. 

The table below gives an overview of the granted and accepted warrants at 31 December 2008. 

Allocation date 

Last exercise 

date 

Exercise price 

Number of 

outstanding 

warrants 

November ‘01 July ‘09 24.07 1,740 

November ‘02 July ‘12 25.87 12,200 

November ‘03 July ‘10 26.45 9,800 

November ‘04 July ‘11 31.69 32,600 

November ‘05 July ‘12 27.11 42,200 

November ‘06 July ‘13 30.02 62,880 

January ‘08 December ‘12 43.10 97,175 

Total 258,595 

IFRS 2 requires share based payments made to employees to be recognised in the financial statements 

based on the fair value of the warrants measured at grant date. According to the transition provisions 

included in IFRS 2, the warrants granted before 7 November 2002 and not yet vested at 1 January 2005 

are not amortised through the income statement. 

The fair value of the warrants granted is determined using the Black & Scholes valuation model.


A new share based program was issued as per 8 November 2007. On December 12th 2008, the Board of 

Directors decided to offer a second tranche of warrants, which had to be accepted by their beneficiaries 

by February 10th 2009. On February 10th 2009, 130.750 warrants were granted to senior management 

(exercise price of 22.07 EUR for French residents, 22.09 EUR for American residents, 23.08 EUR for all 

others). 

The weighted average fair value of the warrants and assumptions used in the measurement of the 

warrants, granted in 2008, are: 


Fair value of warrants (EUR) 2.3 - 

Share price (EUR) 30.72 - 

Exercise price (EUR) 43.10 - 

Expected volatility 24.20% - 

Expected option life (years) 4.5 - 

Expected dividend yield 3.61% - 

Risk free interest rate 4.12% - 

The number and weighted average exercise price of share warrants is as follows: 

Weighted 

average 

exercise 

price 

Number of 

warrants 

Weighted 

average 

exercise 

price 

Number of 

warrants 


151 

Outstanding at the beginning of the 

29.10 167,420 29.00 259,240 

period 

Forfeited during the period 31.69 6,000 44.63 4,080 

Exercised during the period - - 28.10 87,740 

Granted during the period 43.10 97,175 - - 

Outstanding at the end of the period 34.30 258,595 29.10 167,420 

Exercisable at the end of the period 29.28 56,340 25.98 23,740 

No warrants were exercised in 2008. 

The weighted average remaining contractual life of the warrants outstanding as per 31 December 2008 

amounts to 3.6 years (2007: 4.5 years).


24. Provisions 


Non-current provisions 85.7 63.1 

Current provisions 0.9 8.6 

Total 86.6 71.7 

ENVIRONMENT RESTRUCTURING OTHER TOTAL 

Balance at 1 January 2008 12.9 5.7 53.1 71.7 

Additions 14.5 - 9.1 23.6 

Use of provision -1.0 -0.4 -2.3 -3.7 

Reversal of provision -0.7 -2.3 -0.5 -3.5 

Effect of discounting - - - 0.0 

Other movements 4.8 -2.8 -3.5 -1.5 

Balance at 31 December 2008 30.5 0.2 55.9 86.6 

The increase of provisions can be mainly explained by the recording of additional environmental 

provisions, next to the fluctuations of provisions due to the normal business activities. 

152 

On December 10th 2008, the environmental permit of Tessenderlo Chemie NV (Belgium) was extended 

for a period of 20 years. Tessenderlo Chemie NV committed itself to invest in a new production process 

and to find a durable solution to its environmental problems in Limburg (Belgium). As a consequence 

of these commitments additional discounted environmental provisions were recorded for an amount of 

14.5 million EUR. 

“Other” provisions include mainly a non-recurring provision of 37.0 million EUR set up following the 

investigations performed by the European Commission on feed phosphates. The European Commission 

performed an investigation in 2004 on pretended contra competitive practices in the segment of the feed 

phosphates. In relation with this investigation, the Group recorded a provision of 20,0 million EUR in 

2004 and an additional 17,0 million EUR in 2006. This investigation is still ongoing. 

For the majority of the non-current provisions, a cash-outflow is not expected to take place within 

5 years. 

25. Trade and other payables 


Trade payables 290.1 290.1 

Other amounts payable 41.6 43.5 

Remuneration and social security 57.2 52.5 

Total 388.9 386.1


26 Financial instruments 

Exposure to foreign currency, credit risk and interest rate risk arises in the normal course of the Group’s 

business. Derivative financial instruments are used to reduce the exposure to fluctuations in foreign 

exchange rates. While these are subject to the risk of market rates changing subsequent to acquisition, 

such changes are generally offset by opposite effects on the hedged items. 

Foreign currency risk 

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in 

foreign exchange rates. The Group incurs foreign currency risks on sales, purchases, investments and 

borrowings that are denominated in a currency other than the company’s functional currency. 

The currencies giving rise to this risk are primarily GBP, USD, PLN, HUF, YEN and CHF. 

Subsidiaries are required to submit information on their net foreign exchange positions when invoiced 

(customers, suppliers) to Tessenderlo Finance, a Belgian subsidiary created in January 2006. 

All the positions are netted at the level of Tessenderlo Finance and the net positions (long/short), which 

are very small, are then sold or bought on the market. 

The main management tools are the spot, purchase and sales of currencies followed by currencyswaps. 

Group borrowings are generally carried out by the Group’s holding and finance companies, which make 

the proceeds of these borrowings available to the operating entities. 

In principle, operating entities are financed in their own local currencies, with this currency being 

obtained, where appropriate, by currency-swaps against the currency held by the finance company. 

In that way, there is no exchange risk either in the finance company or in the company finally using the 

funds. The cost of this currency-swap is included in the finance costs. 

153 

In emerging countries, it is not always possible to borrow in local currency because local financial 

markets are too narrow, or funds are not available or because the financial conditions are too onerous. 

Those amounts are relatively small for the Group. 

• Exposure to foreign currency risk 

The Group’s exposure to foreign currency risk was as follows based on nominal amounts (for the 

exchange rates used, we refer to note 1 “Summary of significant accounting policies”): 


EUR USD GBP EUR USD GBP 

Assets 4.3 29.2 77.7 10.6 79.6 92.7 

Liabilities -9.8 -39.7 -8.5 -11.1 -52.1 -4.9 

Gross exposure -5.5 -10.5 69.2 -0.5 27.5 87.8 

Forward exchange contracts 3.6 12.5 -70.0 -5.7 -40.7 -89.8 

Net exposure -1.9 2.0 -0.8 -6.2 -13.2 -2.0 

Net exposure (in EUR) -1.9 1.4 -0.8 -6.2 -9.0 -1.5


The difference between the amount covered and the amount in position is due to a mismatching between 

the recording and the value date of the operations. Coverage of exposure is done on a continuous basis. 

Credit risk 

The Group is high risk averse. In its strategy to increase shareholder value, the Group aims at a dynamic 

corporate portfolio management to develop confidently new markets: corporate exposure, asset quality, 

portfolio diversification are considered together with the maximisation of market shares, which requires 

efficient processes, cost effective payment default protection and CRM good practices. 

The international financial and economic crisis results in a deep crisis of confidence. The Group focuses 

especially on its stable relationships with long term partners. Special and legitimate attention is given to 

new relationships, for which, if necessary, secured payment methods are used. 

A Corporate Credit Procedure, a quick and consistent credit decision process, appropriate payment 

terms, an efficient collection tool and an accurate risk mitigation tool are used to accelerate the cash 

flow, to minimize bad debts and to increase sales. 

An in-house scoring model aims at defining, with the use of sector-based benchmarks, the portfolio 

in term of risks through an analysis of performance indicators and the financial structure. When a 

risk cannot be assessed or when it is too high, the Group resorts to credit insurance or other forms of 

guarantees. 

154 

At 31 December 2008, no significant concentrations of credit risk existed. The liquidities available at the 

end of the year are deposited at very short term at local ranking banks. 

The maximum exposure to credit risk at the reporting date was: 




Amounts written off -14.5 -13.1 


Receivables from related parties 9.1 0.3 

Assets related to employee benefit schemes 14.5 10.2 

Derivative financial instruments 5.4 1.9 

Cash & cash equivalents 53.5 93.6 

Total 545.2 534.1 

The maximum exposure to credit risk for trade receivables at the reporting date by business group was 

(see also note 16): 


Chemicals 181.8 152.2 

Specialities 105.1 93.1 

Plastics Converting 112.8 132.1 

Unallocated 2.7 1.6 

Total 402.4 379.0


The aging of trade receivables at the reporting date was: 

Gross 

Amounts 

written off Gross 

Amounts 

written off 

2008 2008 2007 2007 

Not past due 271.7 3.5 263.8 0.1 

Past due 0-30 days 87.1 1.1 74.0 0.6 

Past due 31-120 days 38.9 1.3 36.5 0.6 

Past due 121-365 days 12.5 1.9 8.7 2.8 

More than one year 6.6 6.6 9.1 9.0 

Total 416.8 14.4 392.1 13.1 

The movement in the allowance for impairment in respect of trade receivables during the year was as 

follows: 


Balance at 1 January 13.1 11.6 

Impairment loss recognised 4.3 3.9 

Reversal of impairment loss -1.0 -1.6 

Other movement -2.0 -0.8 

Balance at 31 December 14.4 13.1 

155 

Interest risk 

At the reporting date, the interest rate policy of the Group’s interest-bearing financial instruments was: 


Fixed rate instruments 

Financial assets - - 

Financial liabilities note 22 92.0 112.7 

Variable rate instruments 

Financial assets note 18 53.5 93.6 

Financial liabilities note 22 256.1 224.7 

On the total amount of financial liabilities at the end of 2008, 72.0 million EUR and 20.0 million EUR 

carry a fixed interest rate respectively until 2010-2016 and until 2009. 

• Fair value sensitivity analysis for fixed rate instruments 

The Group does not account for any fixed rate financial liabilities at fair value through profit and loss, 

and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair 

value hedge accounting model. Therefore a change in interest rates at the reporting date would not 

affect profit or loss.


• Cash flow sensitivity analysis for variable rate instruments 

The average interest rate on the average debt in 2008 amounted to 4.7 % (2007: 4.8 %). 

An increase (decrease) of 100 basis points in interest rates at the reporting date would have decreased 

(increased) profit and loss by 1.4 million EUR (2007: 1.3 million EUR). This analysis assumes that all 

other variables, in particular foreign currency rates, remain constant. 

Liquidity risk 

The Group will be able to meet its financial obligations as they fall due. 

The Group’s approach to manage liquidity is to ensure, as far as possible, that it will always have 

sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without 

incurring unacceptable losses or risking damage to the Group’s reputation. 

The Group establishes forecasts on a regular base on short and longer term in order to be able to adapt 

financial means to forecasted needs. 

In addition, the Group maintains the following credit lines: 

156 

• A credit line of 420.0 million EUR, which is not confirmed. 

• A credit line of 30.0 million USD. This credit line is valid till June 2009, and the interest rate would 

be libor + 0.55 %. 

In addition, the Group uses a commercial paper program of maximum 200.0 million EUR. 

The following are the contractual maturities of financial liabilities, including interest payments and 

excluding the impact of netting agreements. 


Carrying 

amount 

Contractual 

cashflows 

less than 

one year 

between 

1 and 5 

years 

more 

than 5 

years 

Non-Derivative Financial liabilities 

Credit institutions 25.0 27.3 5.8 21.5 - 



Credit institutions 231.1 233.1 228.1 3.3 1.7 

Finance lease liabilities 2.0 2.3 0.2 1.9 0.2 

Derivative Financial liabilities 

Forward exchange contracts 5.2 - - - - 

Inflow - -97.4 -97.4 - - 

Outflow - 92.5 92.5 - - 

Total 353.3 356.6 252.4 102.3 1.9


2007 

Carrying 

amount 

Contractual 

cashflows 

less than 

one year 

between 

1 and 5 

years 

more 

than 5 

years 

Non-Derivative Financial liabilities 





Finance lease liabilities 2.7 3.3 0.3 2.5 0.5 

Derivative Financial liabilities 

Forward exchange contracts -1.5 - - - - 

Inflow - -170.6 -170.6 - - 

Outflow - 169.0 169.0 - - 

Total 335.9 354.7 220.4 115.9 18.4 

Fair value of financial assets and liabilities 

The fair values together with the carrying amounts shown in the balance sheet are as follows: 

Note 

Carrying 

amount 


Fair 

value 


Carrying 

amount 

2007 

Fair 

value 

2007 

157 

Derivative financial instruments 26 5.4 5.4 1.9 1.9 

Cash and cash equivalents 18 53.5 53.5 93.6 93.6 

Investments 14 5.2 5.2 6.1 6.1 

Trade and other receivables 16 472.4 472.4 429.3 429.3 

Non-current financial liabilities 22 -96.7 -91.5 -122.6 -117.5 

Leasing payables 22 -1.9 -1.8 -2.6 -2.5 

Credit institutions 22 -94.8 -89.7 -120.0 -115.0 

Current financial liabilities 22 -251.4 -251.0 -214.8 -214.5 

Current portion long term financial 

22 -25.0 -24.6 -25.0 -24.7 

liabilities 

Leasing payables 22 -0.1 -0.1 -0.1 -0.1 

Credit institutions and commercial paper 22 -226.3 -226.3 -189.7 -189.7 

Trade and other payables 25 -388.9 -388.9 -364.6 -364.6 

-200.5 -194.9 -171.1 -165.7 

Estimation of fair values 

• Derivative financial instruments 

The fair value of a derivative financial instrument is the amount for which an asset could be exchanged, 

or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. 

The fair value of forward contracts is calculated as the discounted value of the difference between the 

contract rate and the current forward rate.


The fair value of these instruments generally reflects the estimated amounts that the Group would 

receive on settlement of favorable contracts or be required to pay to terminate unfavorable contracts 

at the reporting date, and thereby takes into account the current unrealised gains or losses on open 

contracts. 

The fair value of forward exchange contracts used at 31 December 2008 was 5.2 million EUR recognised 

in the income statement on the line net revaluation to fair value of derivatives, which is included in the 

finance income (2007: 1.5 million EUR). 

The following table indicates the fair values of all outstanding derivative financial instruments at yearend: 

Contractual 

Contractual 

amount Fair value amount 


Fair value 

Forward exchange contracts 97.4 5.2 169.0 1.5 

The contractual amount indicates the volume of outstanding derivatives at the balance sheet date and 

therefore does not reflect the group’s exposure to risks from such transactions. 

158 

In respect to the forward exchange contracts, the table below indicates the underlying contractual 

amount of the outstanding contracts per currency at year-end (selling of foreign currencies). 

Amount 

in foreign 

currency 

Amount in 

EUR 

Amount 

in foreign 

currency 

Amount in 

EUR 


GBP 70.0 78.2 93.9 128.1 

USD 17.5 12.9 42.9 29.1 

Other - 6.3 - 11.8 

Total 97.4 169.0 

The Group also holds a position in emission allowances of which the fair value as per 31 December 2008, 

amounted to 0.2 million EUR (2007: 0.4 million EUR). 

• Interest-bearing loans and borrowings 

The fair value is calculated based on discounted expected future principal and interest cash flows. 

The interest rates used to discount estimated cash flows, where applicable, are based on the 

government yield curve at the reporting date plus an adequate credit spread, and were as follows: 


Loans and borrowings 5.9-6.0% 5.0-5.2%


• Financial lease payables 

The fair value is estimated as the present value of future cash flows, discounted at market interest rates 

for homogeneous financial lease agreements. The estimated fair values reflect the change in interest 

rates. 

The interest rates used to discount estimated cash flows, where applicable, are based on the 

government yield curve at the reporting date plus an adequate credit spread, and were as follows: 


Leases 8.0 % 8.0 % 

• Trade and other receivables/payables 

For current trade and other receivables/payables, the notional amount is deemed to reflect the fair 

value. Non-current receivables/payables are discounted to determine the fair value. 

27. Operating leases 

The non-cancellable operating leases are payable as follows: 

159 


Less than one year 4.8 3.6 

Between one and five years 16.2 12.6 

More than five years 5.5 4.7 

Total 26.5 20.9 

During the current year, 11.2 million EUR was recognised as an expense in the income statement in 

respect of operating leases (2007: 9.5 million EUR). 

Operating leases mainly consist of land and buildings (7.8 million EUR), property, plant and equipment 

(15.0 million EUR) and furniture and vehicles (3.7 million EUR). 

28. Guarantees and commitments 


Guarantees given by third parties on our behalf 39.0 20.5 

Guarantees given on behalf of third parties 4.3 6.9 

Guarantees received from third parties 4.7 4.4 

Total 48.0 31.8


Guarantees given by third parties on our behalf mainly relate to the fulfillment of our environmental 

obligations. The increase in 2008 can be explained by a new guarantee which was given on our behalf for 

an amount of 18.0 million EUR. 

Guarantees given on behalf of third parties mainly relate to guarantees given for the proper execution of 

projects. 

The guarantees received from third parties concern guarantees, which suppliers grant to the Group as 

guarantee for the proper execution of investment projects. 

29. Contingencies 

The Group could be confronted with a number of potential claims and disputes, which are a 

consequence of the daily operational activities. These claims and disputes are not of such nature that 

they could be subject today to a suitable provision. 

160 

It is the Group’s policy to recognise environmental provisions in the balance sheet, when the company 

has a present obligation (legal or constructive) as a result of a past event, when it is probable that an 

outflow of resources embodying economic benefits will be required to settle the obligation and a when 

reliable estimate can be made of the amount of the obligation. 

These provisions are reviewed periodically and adjusted, if necessary, as assessments and 

cleanups proceed and additional information becomes available. Environmental liabilities can 

change substantially due to the emergence of additional information on the nature or extent of the 

contamination, a change in legislation or other factors of a similar nature. 

As stated in note 24, the environmental provisions in accordance with the above policies aggregated to 

30.5 million EUR at 31 December 2008 (2007: 12.9 million EUR). 

While it is not feasible to predict the outcome of all pending environmental exposures, it is reasonably 

possible that there will be a need for future provisions for environmental costs which, in management’s 

opinion, based on information currently available, would not have a material effect on the Group’s 

financial position but could be material to the Group’s results in any one accounting period. 

In order to acquire the remaining 50 % stake in Fiso Group, the Group has signed call agreements with 

the owner of that share. The call option may be exercised from 1 June 2009 until 30 September 2009. 

The exercise price is determined by a formula, which takes into account the financial figures of Fiso 

Group. 

In order to acquire an additional stake of 20 % in Wolf Mountain Products, the Group holds, as agreed 

with the current owners of that share, an option which may be exercised from 1 January 2014 until 30 

June 2014. The exercise price is determined by a formula, which takes into account the financial figures 

of Wolf Mountain Products. 

The Group has been granted emission allowances for the period 2008-2012 (575 KT CO2 emission


allowances per year). These granted emission allowances have been obtained free of charge. 

The total number of allowances which will be used by the Group in this period cannot yet be determined 

reliably. 

30. Related parties 

The Group has a related party relationship with its subsidiaries, associates, joint ventures and with its 

directors and its management committee. 

Transactions with joint ventures 


Revenue 2.2 1.8 

Cost of sales -28.2 -13.3 

Other operating income 0.1 0.1 

Finance costs -0.1 -0.1 



Transactions with associates 

161 


Revenue - - 

Cost of sales - - 

Other operating income - - 

Finance costs - - 

Current assets 8.7 - 

Current liabilities - - 

Dividends were received from joint-ventures and associates for an amount of 10.2 million EUR (2007: 4.9 

million EUR). 

Transactions with joint ventures and associates are due to the ordinary course of business and are at 

arm’s length. 

Transactions with the members of the management committee 


Short-term employee benefits 2.5 2.4 

Post-employment benefits 0.4 0.3 

Share based payments 0.2 0.2 

Total 3.1 2.9


Short-term employee benefits include salaries (including social security contributions), bonuses earned 

during the year, car leases and other allowances where applicable. 

Director’s payments consist mainly of director’s fees (tantièmes). 

31. Information on the auditor’s assignments and 

related fees 

Our statutory auditor is KPMG Bedrijfsrevisoren / Réviseurs d’Entreprises, represented by Ludo Ruysen, 

engagement partner. 

Fees for auditing the annual financial statements of Tessenderlo Chemie NV and its subsidiaries are 

ultimately determined by the general meeting of shareholders. Audit and audit related fees for 2008 

in relation to services provided by KPMG Bedrijfsrevisoren amounted to 0.70 million EUR (2007 : 0.47 

million EUR), which was composed of audit services for the annual financial statements of 0.39 million 

EUR (2007: 0.32 million EUR) and audit related services of 0.31 million EUR (2007: 0.15 million EUR). 

Audit related services mainly relate to services incurred in connection with consolidation and BPM. 

162 

Audit and other fees for 2008 in relation to services provided by other offices of the KPMG network 

amounted to 0.64 million EUR (2007: 0.55 million EUR)which was composed of audit services for the 

annual financial statements of 0.45 million EUR (2007: 0.47 million EUR), tax services of 0.19 million 

EUR (2007 : 0.08 million EUR) and audit related services of 0.0 million EUR (2007: 0.0 million EUR). 

32. Subsequent events 

On January 7th 2009, Wymar International (Oeselgem, Belgium), a subsidiary of the Business Unit 

Profiles, in the Business Group Plastics Converting, has announced its intention to restructure its 

operations. The causes for this decision rest with the structural macroeconomic downturn on the 

various markets where Wymar operates, combined with the negative impact of the financial crisis on the 

investment behaviour of end consumers (new-build and renovation). These adverse market conditions 

are also being felt on the Central and Eastern European markets in particular. To safeguard the future 

of Wymar’s activities at its Oeselgem plant, it could be that redundancies cannot be ruled out. The 

current plan could translate in a loss of 46 jobs at Wymar International in Oeselgem. At this moment the 

financial impact of this restructuring of operations could not yet be determined reliably.


33. Consolidated companies 

Listed below are the most important Tessenderlo Group companies. A complete list of the Group 

companies is available at Tessenderlo Chemie NV, Troonstraat 130, 1050 Brussel. 

The total number of consolidated companies is 96. 

List of the most important consolidated companies on 31 December 2008 

accounted for by the full consolidation method 

Europe 

Belgium Dyka Plastics NV 3900 Overpelt 100% 

Belgium Immo Watro SA 1050 Brussels 100% 

Belgium Limburgse Vinyl Maatschappij NV 1050 Brussels 100% 

Belgium Tessenderlo Chemie NV 1050 Brussels 100% 

Belgium Tessenderlo Chemie International NV 1050 Brussels 100% 

Belgium Tessenderlo Finance NV 1050 Brussels 100% 

Belgium Wymar International NV 8720 Oeselgem 100% 

Czech Republic Dyka s.r.o. 27361 Velka Dobra 100% 

France Akiolis Group SAS 72000 Le Mans 100% 

France Calaire Chimie SAS 62100 Calais 100% 

France Chemilyl SAS 59120 Loos 100% 

France Collectoco SAS 67220 Neubois 100% 

France Ets Caillaud SAS 61400 Saint-Langis-Les-Mortagne 100% 

France Ets. Point SAS 01440 Viriat 100% 

France France Gras SA 56300 Le Sourn 100% 

France Plastival SAS 25340 Clerval 100% 

France Produits Chimiques de Loos SAS 59120 Loos 100% 

France Profex SAS 62210 Avion 100% 

France Progilor-Bouvart SAS 55100 Charny sur Meuse 99.90% 

France Saplast SAS 67100 Strasbourg 100% 

France Société Artésienne de Vinyle SAS 59120 Loos 100% 

France Soleval SAS 61400 Saint-Langis-Les-Mortagne 100% 

France Soparcail SAS 61400 Saint-Langis-Les-Mortagne 100% 

France Sotra-Seperef SAS 69650 Quincieux 100% 

France SR Collecte SAS 67220 Neubois 100% 

France Tefipar SA 75009 Paris 100% 

France Thermoplastiques Cousin-Tessier SAS 85130 Tiffauges 100% 

France Union de la Boucherie Lyonnaise SA 69960 Corbas 94.20% 

Germany Dyka Gmbh 14513 Teltow 100% 

Germany PB Gelatins GmbH 31582 Nienburg/Weser 100% 

Italy Farchemia srl 24047 Treviglio (BG) 100% 

Italy Tessenderlo Italia srl 24047 Treviglio (BG) 100% 

Italy Tessenderlo Partecipazioni SpA 24047 Treviglio (BG) 100% 

Luxembourg Térélux SA GD 2633 Luxembourg 100% 

Poland Dyka Polska Sp.zo.o. 55-221 Jecz-Laskowice 100% 

Poland T.C.T. Polska Sp.zo.o. 96-500 Sochaczew 100% 

Poland Wymar Polska Sp.zo.o 62-100 Wagrowiec 100% 

Switzerland Tessenderlo Schweiz AG 5330 Zurzach 100% 

The Netherlands Dyka BV 8331 LJ Steenwijk 100% 

The Netherlands Tessenderlo NL Holding BV 4854 MT Bavel 100% 

The Netherlands LVM Limburg BV 6167 RZ Geleen 100% 

The Netherlands Nyloplast Europe BV 3295KG s-Gravendeel 100% 

163


The Netherlands Tessenderlo Chemie Maastricht BV 6222 Maastricht 100% 

The Netherlands Tessenderlo Chemie Rotterdam BV 3133 KA Vlaardingen 100% 

United Kingdom Eurocell Building Plastics Ltd Alfreton-Derbyshire DE55 4 RF 100% 

United Kingdom Eurocell plc Alfreton-Derbyshire DE55 4 RF 100% 

United Kingdom Eurocell Profiles Ltd Alfreton-Derbyshire DE55 4 RF 100% 

United Kingdom John Davidson Pipes Ltd Longtown-Carlisle CA6 5LY 100% 

United Kingdom PB Gelatins UK Ltd CF 375 SQ Treforest-Mid Glamorgan 100% 

United Kingdom Tessenderlo Fine Chemicals Ltd ST13 8UZ Leek; Staffordshire 100% 

United Kingdom Tessenderlo Holding UK Ltd CF 375 SU Treforest 100% 

United Kingdom Tessenderlo UK Ltd Widnes, Cheshire, WA8 ONY 100% 

United Kingdom Wymar Systems Ltd DY13 9EZ Worcestershire 100% 

USA 

USA Chelsea Building Products Inc Oakmont - Pennsylvania 15139 100% 

USA PB Leiner USA Corp Davenport - Iowa 52809 100% 

USA Tessenderlo Kerley Inc Phoenix - Arizona 85008-3279 100% 

USA Tessenderlo U.S.A. Inc. Phoenix - Arizona 85008-3279 100% 

USA Tessendelo Kerley Services Inc New Mexico-88 220 Carlsbad 100% 

USA MPR Services Inc Phoenix - Arizona 85008-3279 100% 

Rest of the world 

164 

Argentina PB Leiner Argentina SA Santa Fe CC108-S3016WAC - Santo 100% 

Tomé 

Canada Dynaplast-Extruco Inc. G7X OB6 Jonquière - Québec 82.17% 

China 

Lianyungang Taile Chemical Industry, Lianyungang City - 222023 Jiangsu 100% 

Co. Ltd. 

Province 

China PB Gelatins (Pingyang) Ping Yang County - 325401 Zhejiang 80% 

Province 

China Tessenderlo Asia Holding Ltd. Chine R.P. - Hongkong 100% 

China Tessenderlo Trading Shanghai Chine R.P. - 20021 Shanghai 100% 

List of the most important consolidated companies on 31 December 2008 

accounted for by the equity method 

Europe 

Belgium T-Power SA 1050 Brussels 33.33% 

Belgium Zéoline SA 4480 Engis 50% 

France Bonnet 34500 Beziers 25% 

France Ferso Bio SAS 47521 Le Passage 50% 

France Ispac 64130 Mauleon 50% 

France Labrousse 46120 Anglars 50% 

France Michel 31800 Villeneuve de Rivière 25% 

France Siram SARL 50390 Nehou 50% 

France SH Capital 47520 Le Passage 50% 

France Solagra SAS 40370 Rion Des Landes 50% 

USA 

Mexico Alkemin S de RL de CV Mexico D.F. 11700 49.50% 

USA Jupiter Sulphur LLC Phoenix -Arizona 85008-3279 50% 

USA Wolf Mountain Products LLC Lindon - Utah 84042 30%


34. Critical accounting estimates and judgements 

The preparation of the financial statements in conformity with IFRS as adopted for use by the 

European Union requires management to make estimates and assumptions that affect the reported 

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the 

financial statements and the reported amounts of revenue and expenses during the reporting period. 

Management bases its estimates on historical experience and various other assumptions that are 

believed to be reasonable under the circumstances, the results of which form the basis for making 

the reported amounts of revenue and expenses that may not be readily apparent from other sources. 

Actual results could differ from those estimates. Estimates are used in accounting for allowances for 

uncollectible receivables, inventory obsolescence and lower of cost of net realisable value adjustments, 

depreciation, employee benefits, taxes, restructuring provisions and contingencies. Estimates and 

assumptions are reviewed periodically and the effects of revisions are reflected in the financial 

statements in the period they are determined to be necessary. 

The Group has applied significant estimates and judgements in order to prepare the consolidated 

financial statements with respect to property, plant and equipment (note 10), goodwill (note 11), lower 

of cost of net realisable value adjustments with respect to inventories (note 17), provisions (note 24), 

income taxes (note 9 and 15), employee benefits (note 23) and contingencies (note 29). 

Statement on the true and fair view of the consolidated financial statements and 

the fair overview of the management report 

165 

G. Marchand (Chairman of the Board of Directors and CEO) and C. Vrebosch (CFO) certify, on behalf and 

for the account of the company, that, to his/their knowledge, 

a) the consolidated financial statements which have been prepared in accordance with International 

Financial Reporting Standards as adopted by the European Union, give a true and fair view of the 

assets, liabilities, financial position and profit or loss of the company, and the entities included in 

the consolidation as a whole, 

b) the consolidated management report includes a fair overview of the development and performance 

of the business and the position of the company, and the entities included in the consolidation, 

together with a description of the principal risks and uncertainties which they are exposed to. 

Report according to article 119 of the Belgian Companies Code 

This annual report is prepared and includes the provisions as required in article 119 of the Company 

Law.


AUDITOR’S REPORT 

166


167


STATUTORY FINANCIAL REPORT 

Balance sheet of Tessenderlo Chemie NV 

(Millions EUR) 2008 2007 

ASSETS 

Intangible assets 4.0 4.7 

Tangible assets 202.1 205.9 

Financial assets 428.2 420.3 

Fixed assets 634.3 630.9 

Stocks and orders in progress 189.2 73.5 

Receivables due within on year 186.6 124.7 

Investments 0.0 30.0 

Cash and cash equivalents 5.5 1.4 

Prepaid expenses and accrued income 0.8 0.5 


Total assets 1,016.4 861.0 

168 

LIABILITIES 

Share capital 138.0 137.0 

Share premiums 43.4 42.0 

Reserves 19.3 17.5 

Retained earnings 314.4 264.8 

Capital grants 8.0 8.7 

Shareholders' equity 523.1 470.1 

Provisions 95.4 77.5 

Deferred taxes 1.4 0.5 

Provisions and deferred taxes 96.8 78.0 

Liabilities due in more than one year 60.2 75.2 

Liabilities due within one year 334.4 237.0 

Accrued expenses and deferred income 1.9 0.7 


Total liabilities 1,016.4 861.0


Profit and loss statement of Tessenderlo Chemie NV 


Sales and operating income 

Sales 931.9 643.8 

Change in work in progress, finished goods and orders in 

77.5 -15.3 

progress (increase+/decrease-) 

Production capitalised 2.0 2.0 

Other operating income 36.3 25.5 

Total operating income 1,047.7 656.0 

Cost of sales and operating charges (-) 

Raw materials and goods purchased for resale 

1. Purchases 623.3 318.3 

2. Changes in stocks (increase-/decrease+) -38.5 -0.5 

Services and other goods 203.4 179.0 

Wages, salaries, social charges and pensions 114.4 109.1 

Depreciations and amortizations on formation expenses, tangible 

25.3 28.8 

and intangible assets 

Amounts written-off stocks and trade receivable ( charges+ / 

0.1 -0.1 

write-back- ) 

Provision for liabilities and charges (charges less utilisations and 

17.9 -4.8 

write-backs) 

Other operating charges 5.0 6.2 

Total operating charges 951.0 636.1 

Operating result 96.8 19.9 

Net financial result 17.8 29.5 

Ordinary profit (+) / losses (-) before taxes 114.5 49.4 

Extraordinary charges/income 0.1 0.0 

Profit before taxes 114.6 49.4 

Income taxes -25.3 0.6 

Deferred taxes -0.9 -0.2 

Profit (+) / losses (-) 88.4 49.8 

Untaxed reserves -1.7 -0.4 

Profit (+) / losses (-) for the year to be allocated 86.7 49.4 

169


Allocations and distributions 


The Tessenderlo Chemie NV Board of Directors propose to allocate the 

- Profits, being 86.7 49.4 

- Increased by prior years' retained earnings 264.8 250.8 

Totalling: 351.5 300.2 

In the following manner: 

- Reserves 1.0 0.4 

- Dividends 37.0 35 

- Retained earnings 314.4 264.8 

Totalling: 351.5 300.2 

If the General Meeting of 2 June 2009 approves this proposed allocation, the gross dividend will be 

1.3333 EUR or a net dividend of 1.0000 EUR for the 27 713 288 ordinary shares and for the VVPR dividend 

a net amount of 1.1333 EUR remittance of coupon n° 72. 

170


Excerpt from the Tessenderlo Chemie NV separate (non-consolidated) financial 

statements prepared in accordance with Belgian GAAP 

The following information is extracted from the separate Belgian GAAP financial statements of 

Tessenderlo Chemie NV. These separate financial statements, together with the management report of 

the Board of Directors to the general assembly of shareholders as well as the auditors’ report, will be 

filed with the National Bank of Belgium within the legally foreseen time limits. These documents are 

also available on request from: Tessenderlo Chemie NV, Troonstraat 130, 1050 Brussel. 

It should be noted that only the consolidated financial statements present a true and fair view of the 

financial position and performance of Tessenderlo Group. 

Since Tessenderlo Chemie NV is essentially a holding company, which recognises its investments at cost 

in its non-consolidated financial statements, these separate financial statements present no more than 

a limited view of the financial position of Tessenderlo Chemie NV. For this reason, the Board of Directors 

deemed it appropriate to publish only an abbreviated version of the non-consolidated balance sheet and 

income statement prepared in accordance with Belgian GAAP as at, and for the year ended 31 December 

2008. 

The statutory auditor’s report is unqualified and certifies that the non-consolidated financial statements 

of Tessenderlo Chemie NV prepared in accordance with Belgian GAAP for the year ended 31 December 

2008 give a true and fair view of the financial position and results of Tessenderlo Chemie NV in 

accordance with all legal and regulatory dispositions. 

171


General information 

Production Units 

Chemicals 

Inorganics Production Units Main Products 

PB Gelatins (Vilvoorde) 

feed phosphates 

Belgium 

Tessenderlo Chemie Ham 

feed phosphates, hydrochloric 

acid, potassium sulphate, 

sulphuric acid 

Zeoline (Engis - Liège) 

zeolites 

172 

France 

Italy 

Produits Chimiques de Loos 

Tessenderlo Italia (Cologna 

Veneta) (Italphos) 

hydrochloric acid, potassium 

sulphate 

feed phosphates 

Netherlands Tessenderlo Chemie Rotterdam feed phosphates 

North America 

PVC / Chlor-alkali 

Belgium 

France 

Tessenderlo Kerley (Phoenix) 

9 production sites 

extensive distribution network 

LVM Tessenderlo 

Tessenderlo Chemie Tessenderlo 

Produits Chimiques de Loos 

SAV - Mazingarbe 

liquid sulphur fertilisers: 

ammonium, calcium, magnesium 

and potassium thiosulphate 

crop protection products, slow 

release nitrogen solutions 

vinyl chloride monomer (VCM) 

caustic soda, caustic potash, 

chlorine, ferric chloride, hydrogen 

sulphide, potassium carbonte 

lye, sodium sulphide, sodium 

hypochlorite (bleach) 

caustic potash, caustic potash 

flakes, mineral chlorides 

(aluminium, ferric and zinc), 

sodium hypochlorite (bleach) 

PVC 

Netherlands LVM Limburg Beek PVC 

North America Tessenderlo Kerley (Phoenix) sulphurous products



Profiles Production Units Main Products 

Belgium 

Wymar International (Oeselgem) 

PVC profiles for windows and 

doors, as well as interior and 

exterior finishing systems 

Canada 

Dynaplast Extruco (Montreal) 

PVC window and door profiles and 

profiles for various sectors 

France 


window and door profiles, profiles 

for fences, facade cladding 

Great Britain 

Eurocell Profiles 

Eurocell Building Plastics 

+ 90 distribution centers 

PVC profiles for windows, 

doors and components for 

conservatories and foamed 

profiles used as roofing 

components and facade cladding 

United States 

Chelsea Building Products 

(Oakmont) 

Rigid and foamed PVC profiles 

for building products, moulding, 

shutters, cladding and flooring. 

Rigid and foamed PVC compounds 


Belgium 

France 

Dyka Plastics (Overpelt) 

+ 7 distribution centers in Belux 

Sotra-Seperef 

(St. Austreberthe and Quincieux) 

plastic pipe systems in PVC, PE 

and PP 

Design and production of plastic 

pipe systems for the construction 

and public works sector, the 

agricultural sector and the 

industry in general 

173 

Netherlands 

Dyka BV (Steenwijk) 

+ 20 distribution centers in The 

Netherlands 

PVC pipe systems 

Nyloplast 

fittings 

Poland 

Dyka Polska (Jelcz-Laskowice) 


PVC, PE and PP pipe systems 

UK 

John Davidson Pipes 


distribution of plastic pipe systems 

Compounds 

France 

CTS - Cousin-Tessier (Tiffauges) 

CTS - Saplast (Strasbourg) 

ready for use PVC and TPE 

mixtures mainly for injection 

mouldings and extrusions and 

thermoplastic elastomers for the 

car industry and for construction 

PVC compounds for cable and 

construction 


Marvyflo® compound for 

dashboards for cars 

Poland CTS - TCT Polska (Sochaczew) PVC and TPE compounds


Specialities 

Fine Chemicals Production Units Main Products 

Organic Chlorine Derivatives 

Belgium 

China 

Great Britain 

Tessenderlo Chemie Tessenderlo 

Taile Chemical Industry 

(Lyanyungang) 

Tessenderlo Trading Shanghai 

Tessenderlo Fine Chemicals (Leek) 

benzyl chloride, benzylidene 

chloride benzotrichloride and 

derivatives 

benzyl chloride, benzaldehyde 

Trading office for all 

Tessenderlo Group activities 

acetic acid esters and triacetin 

aromas benzyl acetate, 

hexylcinnamaldehyde 

Italy Tessenderlo Italia (Pieve Vergonte) chlorotoluenes 

Netherlands Tessenderlo Chemie Maastricht benzyl alcohol 

Pharmaceutical Intermediates 

174 

Belgium Tessenderlo Chemie (Tessenderlo) glycine and derivatives 

France 

Calaire Chimie (Calais) 

pharmaceutical intermediates 

active pharmaceutical 

ingredients 

Italy 

Chemilyl (Loos) 

Farchemia (Treviglio) 

oxalyl chloride and derivatives 

pharmaceutical intermediates, 

active pharmaceutical 

ingredients 

Gelatins 

Argentina 

PB Leiner Argentina (Santa Fé) 

+ 2 collection centers 

gelatins 

Belgium PB Gelatins (Vilvoorde) gelatins & ossein 

China PB Gelatins (Pingyang) gelatins 

Germany PB Gelatins Germany (Nienburg) gelatins 

Great Britain PB Gelatins UK (Treforest) gelatins 

USA PB Leiner USA (Davenport) gelatins 


France 

Akiolis (Le Mans) 

4 rendering plants 

9 plants for valorisation 

including: 

*15 units for valorisation of 

animal materials 

*2 units for treatment of used 

vegetable oils 

43 collection centers

Addresses 

TESSENDERLO GROUP 

General Management, 

Corporate Secretary, 

Human Resources, IT and Organisation, 

Finance and Accounting Management 

Corporate Communication 

rue du Trône, 130 

BE-1050 Bruxelles (Belgium) 

Troonstraat 130 

BE-1050 Brussel (Belgium) 

Tel.: + 32 2 639 18 11 

Fax: + 32 2 639 19 99 

Website: www.tessenderlogroup.com 

TESSENDERLO CHEMIE NV 

Headoffice 

Stationstraat - Entrance 2 

Industrieterrein Schoonhees – Zone 1 

BE-3980 Tessenderlo 

Tel.: + 32 13 61 22 11 

Fax: + 32 13 66 81 40 


TESSENDERLO CHEMIE INTERNATIONAL NV 

SHARED SERVICE CENTER 

Ubicenter 

Philipssite 5 – 3rd floor 

BE-3001 Leuven (Belgium) 

Tel.: +32 16 70 72 00 

Fax: +32 16 70 72 80 

Chemicals 

HEADOFFICE CHEMICALS 

H. Hartlaan 21 – Entrance 5 

Industrieterrein Schoonhees – Zone 1 

BE-3980 Tessenderlo (Belgium) 

Tel.: +32 13 61 22 11 

Fax: +32 13 66 86 04 


INORGANICS 

PRODUITS CHIMIQUES 

DE LOOS SAS 

BP 39 - FR-59374 Loos (France) 

rue Clémenceau 

FR-59120 Loos (France) 

Tel.: +33 320 22 58 58 

Fax: +33 320 93 59 80 




Industrieterrein Ravenshout 1010 – Zone 1 

Bergstraat, 32 - Entrance 1 

BE-3945 Ham (Belgium) 

Tel.: +32 13 61 22 11 

Fax: +32 13 61 12 32 


TESSENDERLO CHEMIE 

ROTTERDAM B.V. 

Zevenmanshaven, 139 

NL-3133 CA Vlaardingen (The Netherlands) 

Tel.: +31 10 445 27 77 

Fax: +31 10 445 27 38 


TESSENDERLO ITALIA srl 

Feed Phosphate Plant – Division Italphos 

Via Quari Destra 41 

IT-37044 Cologna Veneta (Verona) (Italy) 

Tel.: +39 0442 41 38 11 

Fax: +39 0442 41 38 28 


TESSENDERLO KERLEY Inc. 

2255 N° 44th Street, Suite 300 

US-Phoenix - Arizona 85008 – 3279 (USA) 

Tel.: +1 602 889 83 00 

Fax: +1 602 889 84 30 

Website: www.tkinet.com 

ZEOLINE SA 

rue J. Wauters, 144 

BE-4480 Engis (Belgium) 

Tel.: +32 42 73 92 63 

Fax: +32 42 75 79 60 

Sales offices 

HGS Handelsgesellschaft für 

Spezialfuttermittel mbH 

Mörkenstrasse 5 

DE-22767 Hamburg (Germany) 

Tel.: +49 408 797987-0 

Fax: +49 408 797987-60 


TESSENDERLO CHEMIE ESPAÑA TCE SA 

POSTAL ADDRESS 

Apartado de Correos 134 

ES-28400 Collado Villalba (Madrid) (Spain) 

Tel.: +34 91 357 32 04 

Fax: +34 91 351 32 04 


175


176 

TESSENDERLO CHEMIE 

ROTTERDAM B.V. 

Zevenmanshaven, 139 

NL-3133 CA Vlaardingen (The Netherlands) 

Tel.: +31 10 445 27 77 

Fax: +31 10 445 27 38 


TESSENDERLO ITALIA srl 

Feed Phosphate Plant – Division Italphos 

Via Quari Destra 41 

IT-37044 Cologna Veneta (Verona) (Italy) 

Tel.: +39 0442 41 38 11 

Fax: +39 0442 41 38 28 


TESSENDERLO KERLEY LATINOAMERICANA SA 

Andres de Fuenzalida 133 depto A 

CL-9358 Santiago (Chile) 

Tel.: +56 2 334 65 71 

Fax: +56 2 334 88 12 


TESSENDERLO KERLEY MEXICO SA de CV 

Blvd. Rodolpho Elias Calles 515-13 OTE 

Obregon, Sonora 

MX-Mexico 85000 (Mexico) 

Tel.: +11 52 64 44 17 59 53 

Fax: +11 52 64 44 17 96 00 


TESSENDERLO KERLEY MIDDLE EAST 

Business Center/6th floor 

Box 2795 

LA-Jounieh (Lebanon) 

Tel.: +961 99 34 635 

Fax: +961 96 43 125 


TESSENDERLO KERLEY PERU SAC 

Parque Industrial 

Jacinto Ibanez 131 

PE-Arequipa (Peru) 

Tel.: +51 54 24 18 24 

Fax: +51 54 23 28 55 


TESSENDERLO POLSKA Sp.z o.o. 

ul. Szarych Szeregów 7 

PL-60-462 Poznan (Poland) 

Tel.: +48 61 840 00 40 

Fax: +48 61 840 02 96 


TESSENDERLO AGROCHEM TARIM VE KIMYA 

SAN. VE TIC. Ltd 

Kustepe Mahallesi 

Leylak Sokak, Murat Is Merkezi 

B. Blok, K:11 D:37 

TR-34387 /Istanbul (Turkey) 

Tel.: +90 212 217 56 26 

Fax: +90 212 217 56 31 


PVC / CHLOR-ALKALI 

PRODUITS CHIMIQUES 

DE LOOS SAS 

BP 39 - FR-59374 Loos (France) 



Tel.: +33 320 22 58 58 

Fax: +33 320 93 59 80 



Stationsstraat – Entrance 2 

Industrieterrein Schoonhees - Zone 1 


Tel.: +32 13 61 22 11 

Fax: +32 13 66 81 40 


TESSENDERLO ITALIA S.r.L. 

30/32 Via Mario Massari 

IT-28886 Pieve Vergonte (VB) (Italy) 

Tel.: +39 0324 86 03 59 

Fax: +39 0324 86 03 73 

Sales offices 

TESSENDERLO SCHWEIZ AG 

Zürcherstrasse 42 

CH-5330 Bad Zurzach (Switzerland) 

Tel.: +41 56 249 09 69 

Fax: +41 56 249 09 67 

Website: www.tessenderlo.ch 

PVC / CHLOR-ALKALI 

LVM Limburgse Vinyl 

Maatschappij NV 

H. Hartlaan, 21 – Entrance 5 

Industrieterrein Schoonhees 2030 


Tel.: +32 13 61 22 11 

Fax: +32 13 66 84 06 

Website: www.lvm.be


LVM Limburg B.V. 

Koolwaterstofstraat 1 

NL-6161 RA Geleen (The Netherlands) 

Tel.: +31 464 76 81 48 

Fax: +31 464 76 46 41 

R & D Polymers 




Tel.: +32 13 61 22 11 

Fax: +32 13 67 20 18 

SAV SAS Plant Mazingarbe 

Chemin des Soldats 

BP 49 

FR-62160 Bully-les-Mines (France) 

Tel.: +33 321 72 85 06 

Fax: +33 321 72 82 60 



HEADOFFICE PLASTICS CONVERTING 





Tel.: + 32 2 639 18 11 

Fax: + 32 2 639 19 99 


PROFILES 

CHELSEA BUILDING PRODUCTS Inc. 

565, Cedar Way 

US-Oakmont, Pennsylvania 15139 (USA) 

Tel.: + 1 412 826 80 77 

Fax: +1 412 826 80 96 

Website: www.chelseabuildingproducts.com 

DYNAPLAST EXTRUCO Inc. 

10500, rue Colbert 

Anjou 

Montréal H1J 2H8 (Canada) 

Tel.: +1 514 355 68 68 

Fax: +1 514 355 03 52 

Website: www.dynaplastextruco.com 

EUROCELL PROFILES Ltd 

Clover Nook road 

Alfreton-Derbyshire 

GB-DE 55 4RF (Great Britain) 

Tel.: +44 1773 842 100 

Fax: +44 1773 842 109 

Website: www.eurocell.co.uk 

PLASTIVAL SAS 

2, Route de Santoche 

FR-25340 Clerval (France) 

Tel.: +33 381 99 18 18 

Fax: +33 381 97 84 97 

Website: www.plastival.fr 

WYMAR INTERNATIONAL NV 

Brugstraat 27 

BE-8720 Oeselgem (Belgium) 

Tel.: +32 9 388 95 71 

Fax: +32 9 388 64 95 

Website: www.wymar.com 

Sales offices 

EUROCELL BUILDING PLASTICS Ltd 

Clover Nook road 

Alfreton-Derbyshire 

GB-DE 55 4RF (Great Britain) 

Tel.: +44 1773 842 100 

Fax: +44 1773 842 109 

Website: www.eurocell.co.uk 

PROFEX SAS 

rue de Vimy - ZI les Quatorze 

FR-62210 Avion (France) 

Tel.: +33 321 08 57 20 

Fax: +33 321 08 57 30 

Website: www.profex.fr 

WYMAR HUNGARIA Kft 

Csepeli Út. 15 

HU-2310 Szigetszentmiklos (Hungary) 

Tel.: +36 24 444 800 

Fax: +36 24 443 553 

Website: www.wymar.hu 

WYMAR POLSKA Sp. z o.o. 

Ul. Gnieznienska 47 

PL-62-100 Wagrowiec (Poland) 

Tel.: + 48 67 26 26 246 

Fax: + 48 67 26 27 510 

Website: www.wymar.com 

177


178 

PLASTIC PIPE SYSTEMS 

DE HOEVE 

KUNSTSTOFRECYCLING B.V. 

De Nieuwe Haven, 16 

NL-7772 BC Hardenberg (The Netherlands) 

Tel.: +31 523 28 83 89 

Fax: +31 523 26 03 89 

DYKA B.V. 

Produktieweg, 7 

NL-8331 LJ Steenwijk (The Netherlands) 

Tel.: +31 521 53 49 11 

Fax: +31 521 53 43 35 

Website: www.dyka.com 

DYKA PLASTICS NV 

Nolimpark 4004 

Stuifzandstraat 47 

BE-3900 Overpelt (Belgium) 

Tel.: +32 11 80 04 20 

Fax: +32 11 64 42 46 


DYKA POLSKA Sp. z o.o. 

ul. Belgijska 5 

PL-55-221 Jelcz-Laskowice (Poland) 

Tel.: +48 71 301 00 00 

Fax: +48 71 301 00 01 


NYLOPLAST EUROPE B.V. 

Mijlweg 45 

NL- 3295 KG ‘s Gravendeel (The Netherlands) 

Tel: +31 78 673 20 44 

Fax: + 31 78 673 44 89 

SOTRA-SEPEREF SAS 

25, Route de Brévillers 

FR-62140 Ste Austreberthe (France) 

Tel.: +33 321 86 59 00 

Fax: +33 321 86 59 01 

Website: www.sotra-seperef.com 

SOTRA-SEPEREF SAS (2) 

Z.I. de Quincieux 2, BP 1 

FR-69650 Quincieux (France) 

Tel.: +33 472 26 29 72 

Fax: +33 478 91 19 98 

Website: www.sotra-seperef.com 

Sales offices 

DYKA B.V. – EXPORT 

Deccaweg 25 

NL-1042 AE Amsterdam (The Netherlands) 

Tel.: +31 20 50 60 081 

Fax: + 31 20 61 35 646 


DYKA GmbH 

Birkenweg, 5 

OT Wilhelmshorst 

DE-14552 Milchendorf (Germany) 

Tel.: +49 33 205 24 25 11 

Fax: +49 33 205 24 25 20 


DYKA s.r.l. 

46, Grigore Cobalcescu Street 

ap.9 

RO- Bucharest, sector 1 (Romania) 

Tel: + 40 364 262 803 

Fax: + 40 364 262 803 


DYKA SK s.r.o. 

Nejedlého 49/9 

SK-841 02 Bratislava (Slovak Republic) 

Tel.: +421 918 973 286 

Fax: +420 336 406 701 


DYKA s.r.o. 

Unhostská 505 

CZ-27361 Velká Dobrá (Czech Republic) 

Tel.: +420 312 666 011 

Fax: +420 312 685 026 


JOHN DAVIDSON PIPES Ltd 

Townfoot Industrial Estate 

Longtown, Carlisle 

GB-Cumbria CA6 5LY (Great Britain) 

Tel.: +44 1228 79 15 03 

Fax: +44 1228 79 20 51 

Website: www.jdpipes.co.uk 

COMPOUNDS 

CTS - COUSIN-TESSIER SAS 

Zone Industrielle BP 3 

FR-85130 Tiffauges (France) 

Tel.: +33 251 65 71 43 

Fax: +33 251 65 71 61 

Website: www.cts-compounds.com


CTS - SAPLAST SAS 

22-24, rue de la Rochelle 

Port du Rhin 

FR-67100 Strasbourg (France) 

Tel.: +33 388 65 82 00 

Fax: +33 388 40 00 80 

Website: www.cts-compounds.com 

CTS - TCT POLSKA Sp. z o.o. 

Ul. 15 Sierpnia 106 

PL-96-500 Sochaczew (Poland) 

Tel.: +48 46 863 13 60 

Fax: +48 46 863 13 80 

Website: www.cts-compounds.com 

Website: www.tct.pl 

PLASTIVAL SAS 

2, Route de Santoche 

FR-25340 Clerval (France) 

Tel.: +33 381 99 18 18 

Fax: +33 381 97 84 97 

Website: www.plastival.fr 

Sales offices 

MARVYFLO 




Tel.: +32 13 61 22 11 

Fax: +32 13 66 84 06 


Specialities 

HEADOFFICE SPECIALITIES 





Tel.: + 32 2 639 18 11 

Fax: + 32 2 639 19 99 


FINE CHEMICALS 

CALAIRE CHIMIE SAS 

Z.I. du Pont du Leu 

1, Quai d’Amérique, B.P. 215 

FR-62104 Calais Cedex (France) 

Tel.: +33 321 46 21 21 

Fax: +33 321 46 21 20 

CHEMILYL SAS 

BP 39 – FR-59374 Loos (France) 



Tel.: +33 320 22 58 58 

Fax: +33 320 93 59 80 

FARCHEMIA S.r.L. 

Via Bergamo, 121 

IT-24047 Treviglio (BG) (Italy) 

Tel.: +39 0363 31 401 

Fax: +39 0363 45 985 

Website: www.farchemia.it 

TAILE CHEMICAL INDUSTRY 

188, Xinhai Road 

Lianyungang City, 

CN-Jiangsu Province 222023 (China) 

Tel.: +86 518 85 25 20 50 

Fax: +86 518 85 25 56 86 

Website: www.taile.com 


H. Hartlaan 21 – Entrance 3-4 



Tel.: +32 13 61 22 11 

Fax: +32 13 66 29 53 


TESSENDERLO CHEMIE MAASTRICHT B.V. 

Ankerkade, 111 

NL-6222 NL Maastricht (The Netherlands) 

Tel.: +31 433 52 59 59 

Fax: +31 433 52 59 55 

TESSENDERLO FINE CHEMICALS Ltd 

Macclesfield Road 

GB-Leek, Staffs ST13 8LD (Great Britain) 

Tel.: +44 1 538 39 91 00 

Fax: +44 1 538 39 90 25 

Website: www.tessenderlofinechemicals.co.uk 

TESSENDERLO ITALIA S.r.L. 

Fine Chemicals Plant 

30/32 Via Mario Massari 

IT-28886 Pieve Vergonte (VB) (Italy) 

Tel.: +39 0324 86 03 59 

Fax: +39 0324 86 03 73 

179


180 

Sales offices 

TESSENDERLO CHEMIE NV – FINE CHEMICALS 

Rue du trône 130 

1050 Bruxelles (Belgium) 



Tel.: + 32 2 639 18 11 

Fax: + 32 2 639 19 99 

GELATIN 

TESSENDERLO CHEMIE NV, AFDELING 

VILVOORDE 

PB GELATINS 

Bedrijvenzone “Centrale” 

Marius Duchéstraat, 260 

BE-1800 Vilvoorde (Belgium) 

Tel.: +32 2 255 62 21 

Fax: +32 2 253 96 18 

Website: www.pbgelatins.com 

PB GELATINS GmbH 

Große Drakenburger Straße 43 

DE-31582 Nienburg/Weser (Germany) 

Tel.: +49 50 21 60 100 

Fax: +49 50 21 60 10 60 


PB GELATINS (Pingyang) Co, LTD 

Fuqian Road, Wubanqiao, 

Aojiang Town, Pingyang County, Wenzhou City 

CN-Zhejiang Province 325401 (China) 

Tel.: +86 577 63 66 80 05 

Fax: +86 577 63 66 81 83 


PB GELATINS UK Ltd 

Treforest Industrial Estate 

Building A6, Severn road 

GB-Pontypridd CF37 5SQ (Great Britain) 

Tel.: +44 1443 849 300 

Fax: +44 1443 844 209 


PB LEINER ARGENTINA 

Parque Industrial Sauce Viejo 

S3017W16 - Sauce Viejo 

Post Office: CC108-S3016WAC 

AR-Santa Fe (Argentina) 

Tel.: +54 342 450 1100 

Fax: +54 342 450 1112 

Website: 

www.pbgelatins.com - www.gelatin.com 

PB LEINER USA 

7001 Brady Street 

US-Davenport, Iowa 52806 (USA) 

Tel.: +1 563 386 8040 

Fax: +1 563 391 1138 

Website: 

www.pbgelatins.com - www.gelatin.com 

NATURAL DERIVATIVES 

AKIOLIS GROUP 

72, av. Olivier Messiaen 

FR-72000 Le Mans (France) 

Tel.: +33 2 44 81 50 10 

Fax: +33 2 44 81 50 12 

General Sales Office China 

TESSENDERLO TRADING SHANGHAI 

Room 2201, 

Shanghai Times Square Office Tower 

Huai Hai Zhong Road, 93 

CN-200021 Shanghai (China) 

Tel.: +86 21 63 91 80 66 ext 15 

Fax: +86 21 63 91 80 77 

Website: www.tessenderlogroup.com


Index 

page 

Accounting Policies 105 

Addresses 175 

Animal feed phosphates 30 

Applications 22 

Audit (committee) 85 

Auditor’s report 166 

Balance sheet NV 168 

Balance (consolidated) 102 

Board of Directors 81 

BEL Mid 92 

Business Groups: 

Chemicals 28 

Plastics Converting 40 

Specialities 54 

Calendar (financial) 7 

Call warrants 88 

Capital 143 

Cash flow 

cover 

Cash flow statement 103 

Chart of the group 20 

Committees 84 

Compounds (pvc/tpe) 50 

Consolidated balance sheet 102 

Consolidated companies 163 

Consolidated income statement 100 

Consolidated revenue 

cover 

Contacts 7 

Corporate Governance 81 

Dividend 94 

Energy 76 

Environment 74 

Equity (shareholders) 143 

Events (recent) 26 

Fertilisers 30 

Figures over 10 years 

cover 

Financial communication 94 

Financial assets 138 

Financial notes 104 

Financial ratios 2 

Gearing 145 

Gelatin 60 

General Meeting 7 

Goodwill 134 

Graphs 2 

Guarantees 159 

Headcount 71 

Human resources 70 

IFRS 105 

Important figures 

cover 

Index (stock exchange) 92 

page 

Intangible assets 136 

International presence 18 

Investor relations 94 

Key figures 

cover 

Leadership 15 

Liabilities (long-term) 144 

Management Committee 86 

Markets 22 

Natural derivatives 64 

Next 150 92 

Number of shares NV 93 

Off-balance sheet commitment 159 

Organisation chart companies 20 

Pension plan 147 

Personnel (costs for) 128 

Pharmaceuticals 56 

Plastics 40 

Plastic Pipe Systems 46 

Press releases (dates) 7 

Principles of consolidation 106 

Production units 172 

Products 22 

Profile 14 

Profiles 42 

Profit distribution 144/170 

Provisions 152 

PVC 35 

Results (consolidated) 100 

Results NV 169 

Revenue breakdown 5 

Revenue (consolidated) 

cover 

Risk Management 76 

Safety 74 

Sales offices 175 

Segment Reporting 121 

Share Tessenderlo Chemie NV 92 

Shareholders 92 

Stock Exchange data 93 

Stock options 88 

Strategy of the group 16 

Subsidiary companies (consolidated) 163 

Tangible assets 132 

Taxes 131 

Vinyl 2010 75 

Water treatment 37 

www 184 

181


Financial Glossary 

Basic earnings per share (Basic EPS) 

EBITDA 

Profit (+) / loss (-) for the period attributable 

to equity holders of the group divided by the 

weighted average number of ordinary shares. 

Earnings before interests, taxes, depreciation, 

amortisation and provisions 

(Profit (+) / loss (-) from operations plus 

depreciation, amortisation and provisions). 

182 

Capital employed (CE) 

The carrying amount of property, plant and 

equipment (PP&E), intangible assets and 

goodwill together with working capital. 

Dividend per share (gross) 

Total amount paid as dividend divided by the 

number of shares issued at closing date. 

Diluted earnings per share (Diluted EPS) 

Profit (+) / loss (-) for the period attributable 

to equity holders of the group divided by the 

fully diluted weighted average number of 

ordinary shares. 

Diluted weighted average number of ordinary 

shares 

Weighted average number of ordinary shares, 

adjusted by the effect of share options on 

issue. 

EBIT 

Earnings before interests and taxes 

(Profit (+) / loss (-) from operations). 

Gearing 

Net financial liabilities divided by equity. 

Interest coverage 

Profit (+) / loss (-) for the period plus income 

tax expense and interest expense, divided by 

the interest expense. 

Market capitalisation 

Number of shares issued (at the end of the 

period) multiplied by the market price per 

share (at the end of the period). 

Net cash flow 

Profit (+) / loss (-) for the period and all 

non cash flow items included in the income 

statement (provisions, amortisations, 

deprecation and impairment losses). 

Net financial liabilities 

Non-current and current financial liabilities 

minus cash and cash equivalents.


Non-recurring items 

Items related to restructuring, impairment 

losses, claims and other income or expenses, 

which do not occur regularly as part of the 

normal activities of the company. 

Pay out ratio 

Gross dividend divided by profit for the period 

attributable to equity holders of the group. 

REBIT 

Recurring earnings before interests and taxes 

(Profit from operations before non-recurring 

items). 

REBITDA 

Recurring earnings before interests, taxes, 

depreciation, amortisation and provisions 

(Profit from operations plus depreciation, 

amortisation and provisions). 

Theoretical aggregated weighted tax rate 

Calculated by applying the statutory tax rate 

of each country on the profit before tax of 

each entity and by dividing the resulting tax 

charge by the total profit before tax of the 

group. 

Weighted average number of ordinary shares 

Number of shares outstanding at the 

beginning of the period, adjusted by the 

number of shares cancelled, repurchased or 

issued during the period multiplied by a timeweighting 

factor. 

Working capital 

Inventories, trade and other receivables 

minus trade and other payables. 

183 

Return on capital employed (ROCE) 

REBIT divided by capital employed. 

Return on equity (ROE) 

Profit (+) / loss (-) for the period divided by 

average equity attributable to equity holders 

of the group.


Editor 

M. Vandenbergen – Corporate Communication 



B-1050 Brussels (BE) 

Tel.: +32 2 639 18 11 

Concept & Pre-press 

Comfi & Publishing, www.comfi.be 

184 

Het jaarverslag is tevens beschikbaar in het Nederlands. 

Le rapport annuel est également disponible en français. 

The Annual Report (in English, Dutch, French) may be viewed on our website: 

www.tessenderlogroup.com; see News & Media – Publications. 

A user-friendly interactive (html) version of the English Annual Report is also available on 

the website. 


Administrative Headquarters 


B-1050 Brussels (Belgium) 

Tel. +32 2 639 18 11 

Fax +32 2 639 19 99 

BTW BE 0 412 101 728 

RPR Hasselt 

Website: www.tessenderlogroup.com

www.tessenderlogroup.com

Making it together 

Making it FIT 

Making it LASTING 

Making it INSPIRING 

Making it CONVINCING 

Making it WORK 

www.tessenderlogroup.com

Annual Report 2008 English [PDF, 2.69 MB] - Tessenderlo Group

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