The European chemical industry association CEFIC, which represents around 50% of all global chemical companies, expects production to increase by 2.3% in 2008, excluding the chemical production of drugs. Irrespective of basic material production for drugs, CEFIC predicts that all sectors of the chemical industry will see slowing growth, which will reflect the weakening of global economic activity. According to CEFIC data, specialty chemicals are expected to see growth of 2.8% in 2008. The German chemical industrial association VCI also assumes a similar growth dynamic and expects production in German chemical companies to increase by 2.5% in 2008.
With a portfolio of dynamically growing businesses in strongly expanding markets and stable business in mature market segments, the Chemicals business sector contributes substantially to balancing entrepreneurial risk. To better diversify risk, Merck wants to achieve above-average growth by developing innovation-driven business fields over the long term and by acquiring businesses that are complementary to existing customer relations or technology platforms. The Chemicals business sector thus expects total revenues to grow by 5% to 7% in 2008 with the earnings contribution remaining stable. The company assumes that total revenues and the operating result of the Chemicals business sector will improve further in 2009.
The Liquid Crystals division has been preparing for some time now to face increasing competition in the liquid crystals market, with the aim of maintaining a leading role over the long term. According to market researchers at DisplaySearch, the market for flat-screen televisions will see volumes of units sold to surpass the 100 million mark in 2008. Consequently, global sales of flat-screen televisions will exceed those of conventional cathode-ray tube televisions for the first time. The market researchers expect that LCD televisions will account for two-thirds of the overall television market by 2011. The division wants to play a similarly active role in new display technologies in order to translate its technological competence and customer expertise into new businesses. Merck therefore expects total revenues to grow in a range of 5% to 10% with return on sales of about 50% in 2008. The Liquid Crystals division expects both total revenues and the operating result to increase further in 2009.
The Performance & Life Science Chemicals division will continue, step by step, to focus on profitable sub-segments. Within these customer segments, the breadth of the Merck product range and customer-centric development are the success factors for the further profitable development of the business. Merck therefore expects total revenues to continue the positive trend of previous years with growth of approximately 5% in 2008. In addition, the company expects the operating result to increase markedly over the previous year. For 2009, the division also expects further growth in both total revenues and the operating result.
