General Meeting of 1 June 2010

The Chairman's message to the Tessenderlo Chemie Annual General Meeting of 1 June 2010 can be consulted in the "Related Documents" section on the right hand side of this page. The message is available in English, Dutch and French.

In 2009 the group was hit badly by the international financial and economic crisis, and the accounts that we are presenting to you today are severely affected by that. 

The drop in activity which had been felt in autumn 2008 continued throughout the year, with the result that the group's revenue fell overall by 24 %. The decline was even worse for the major products from Chemicals such as fertilisers, PVC and lye, which, in contrast, had been the products behind the exceptional results of 2008.

The reduction of the high stock levels from the start of the year, made with expensive raw materials, has now been achieved but it has impacted the results for the year.

Plastics Converting was also affected by the drop in activity in the construction and civil engineering works sector but to a lesser degree than the large commodities.

The Organic Specialities activities and the special products and services in the United States have produced the best performance. For our gelatin activity, we have even recorded one of the best results of the last few years.

This confirms that it is indeed these activities that the group should focus on for its future development.

The cumulative impact of the disastrous state of the international economy, and the non-recurring exceptional items means that we are showing a very heavy net loss of 167 million euros.

This is one of the most difficult periods in the history of the group but, structurally, it does not call its profitability into question.

For this reason, your Board is proposing to maintain our dividend distribution policy and, therefore, to distribute a dividend of 1 euro net per ordinary share, as per last year. The Board of Directors also decided to offer the choice of payment of the 2009 dividend in new shares, or in cash, or a combination of both. The price of these new shares was set at 20.00 EUR per share.

It has also decided to offer, once again, to the group's employees the opportunity to subscribe to a capital increase exclusively reserved for them. The aim of this operation, which we carry out every year, is to allow the employees to share in the group's development and growth. As in previous years, it relates to a maximum number of 150,000 new shares. The subscription price has been set at 18.20 euro.

Before the crisis, the group had already embarked on a huge cost-cutting programme. This was stepped up further in 2009 with the closure of two factories in Plastics Converting in order to reduce overcapacities.
It is, of course, continuing in 2010 with, among other things, a strict limit on expenditure and current investments in order to keep the level of indebtedness under control.

In 2009 we were able to carry out targeted growth investments in the specialities sector. A new business activity in crop protection products was acquired in the United States. In France, in Natural Derivatives, the group bought up the remaining 50 % of a joint venture. Finally, the construction of a new gelatin factory was started in Brazil.

These investments all help to reduce the share of commodities in our activities portfolio.

We had set ourselves the target of reducing commodities to below 30% by 2012. Obviously, the financial crisis has made it somewhat more difficult to execute this strategy but, on the other hand, the resilience of our specialities activities has confirmed our view of the validity of this strategic direction.

So, it is this maintained objective that has been set by our Board for the new group management, which was appointed, as planned, at the beginning of the year and is headed by Frank Coenen as CEO.

We have every reason to believe that this new management team will be able to deal with the many challenges facing the group and, despite the crisis, achieve the strategic objectives.

Gérard MARCHAND
Chairman of the Board of Directors