2.1 The fortunes of the additives business are closely linked to those of the plastics industry, and consequently to the health of the global economy, the level of business confidence, the number of domestic appliances, vehicles and computers purchased each year, the state of the construction industry, the ability of consumers to afford home refurbishment etc. The last few years have been rather difficult from these standpoints. The additive suppliers, in common with most of the world s chemicals sector, faced difficult times between 2000 and 2003, and recovery has been patchy. Even now, the US dollar s decline against other leading currencies suggests a continuing struggle for profitability.

2.2 Although trading conditions are now improved, the dependence of manufacturers on fluctuating oil and energy prices is a matter of concern for the future. Several other raw materials are increasing in price, notably bromine, tin, phthalic anhydride and epoxy chemicals. Another aspect of the prices issue is that, besides raw materials, plastics themselves are also seeing rapid price increases that may eventually affect their growth rates considerably.

2.3 Globalisation means that the plastics industry s major customers, such as the automotive and packaging sectors, want the same plastics formulations to be available, with the same uniform quality, whether in Asia, Europe or North America. Customers want additive suppliers to offer similar standards of technical service in all continents.

2.4 Furthermore customers increasingly prefer to deal with suppliers who can offer a full range of additives, backed by considerable research...