(AOF) – Solvay announces that it is increasing the capacity of its Shandong Huatai Interox Chemical site in China. The partnership with China’s Huatai Chemical will enable the site to produce 48 kilotons of photovoltaic-grade hydrogen peroxide per year by 2025. This is to effectively meet the growing demand of the photovoltaic industry, thereby supporting growth of the renewable energy sector in northern China
Since 2010, Solvay and Huatai have operated a joint venture that integrates Solvay’s hydrogen peroxide technology. Located in the Dongying technical and economic development zone, in Shandong province, the site positions Solvay at the heart of the Chinese market, the largest in the world for hydrogen peroxide.
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Key points
– Chemical group created in 1863, world leader in several of its specialty polymers, composite materials, etc.;
– Turnover of €9 billion distributed between solutions for 33%, materials for 30%, and chemicals for 30%;
– Sales made at 29% in Europe, 28% in North America and 11% in South America and intended for aeronautics and automobiles for 26%, industrial applications for 18%, consumer goods & health for 17% , resources & environment for 14%, agriculture for 12% and electronics & electricity for 6%;
– GROW economic model:
– G: accelerate in specialty polymers and composite materials,
– R: maintain solid cash flow in chemical activities,
– O: optimize returns in the solutions branch,
– W: reorganize the operational model;
– Capital controlled at 30.71% by the family holding company Solvac, Nicolas Boël, president of the 15-member board of directors, and Ilham Kadri, president of the executive committee;
– Balance sheet under control with a debt of €3.1 billion at the end of June, i.e. leverage of 0.9 at a historic low.
Challenges
– “Power of Two” strategy of split into 2 companies, listed on the stock exchange by the end of 2023:
– Syensqo for specialty activities (polymers, Aroma, Novecare, etc.) and Solvay for basic chemicals (Soda Ash, peroxides, silicas, etc.).
– aimed at optimizing the allocation of capital between activities;
– Innovation strategy based on 22 R&D centers (1st Belgian for patent filing) generating 18% of annual sales and integrating environmental impacts into its approach (75% of sales from the R&I pipeline generated by “Sustainable Solutions” ):
– “Solvay One Planet” environmental strategy aiming for carbon neutrality in 2050:
– climate: complete exit from coal, 26% reduction in GHG emissions, 30% reduction in pressure on biodiversity,
– circular economy: 65% of sales in sustainable solutions, 30% reduction in non-recyclable waste and 25% reduction in water consumption;
– Benefits of industrial investments in carbonates (sites in the United States and Bulgaria), polymers for lithium batteries and polyvinylidene fluoride (coverage of lithium batteries);
– Strengthening strategic research links with Chinese manufacturers and ramping up sites in the United States.
Challenges
– Impact of the decline in sales partially offset by increases in selling prices;
– Limited energy risk, 32 of the 45 European sites using natural gas;
– Syensqo targets organic net sales growth of 5% to 7% over the period 2024-2028 and an underlying EBITDA margin of around 25% by 2028. Solvay forecasts average organic growth of 5% and increase in underlying EBITDA margin between 25 and 30% in 2028.
– 2023 dividend policy: distribution between Syensqo for 40% and EssentialCo for 60%.
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