Research and Development

General background

The research programs in 2007 were strongly influenced by the results of the strategic thinking exercises that were held during 2006-2007 in most of the business units. As a result, priorities were defined more clearly and in a number of areas, the emphasis was shifted. Below is a summary of the changes that were put into place in the various sectors:

Research

Several changes were made in the research department to optimise resources while maximising productivity:

• In order to optimise research resources and ensure the further development of Tessenderlo Group, it was decided to rationalise technical assistance for large volume products with a lower added value.

• Technical support for clients is now handled primarily by the sales department.

• Two PVC processing research laboratories were merged.

• Research into the production of intermediates and end-products for the pharmaceutical industry, in the Fine Chemicals business unit, was extended.

Development

A number of significant developments over the course of the previous year have allowed us to further our business objectives and improve results:

• The development of gelatine derivatives for applications in more specialised market segments was launched along with several other promising new projects.

• New forms of cooperation and exchange of expertise with other companies and or external knowledge centres are being tested.

• within the framework of this new strategy, the analysis laboratories should now be able to work according to the GLP standards (Good laboratory Practice).

• At the end of 2007, WebLIMS was launched. It is a web application of the Laboratory Information Management System (LIMS) and enables internal clients to electronically submit analysis requests, view intermediate results and consult end-results and reports. The system will be further expanded in 2008 to accommodate a wider range of analyses.

In addition to this, investments will be made for analysis equipment that is better suited to research into specialities with a higher added value. The total research and development budget stood at 27 million EUR in 2007 with Tessenderlo Group employing a specialised team of researchers totalling 255 at the end of December.
The more fundamental research is mainly conducted in collaboration with universities and research centres both at home and abroad. New technologies are being developed here that, in the medium term, will complement the group's wide array of techniques. These new technologies will enable Tessenderlo Group to move further in the towards increasing the value of its end-products.