Economic and Legislative Factors

In 2009, the broad economic environment was clearly burdened by the international financial crisis. Three of our five divisions posted lower sales and earnings. Thanks to our product portfolio, however, we were able to partially mitigate this trend via strong growth at WACKER POLYSILICON. In 2009, we kept an eye firmly on volume trends, raw-material and energy-price shifts, and personnel and material costs. See further details on Comparison with Forecast Performance 

Our business is influenced by currency fluctuations against the euro. We use currency hedging to secure half of our US-dollar sales. The hedging ratio is around 50%. A one cent increase in the euro against the dollar lowers EBITDA by some €3 million.

Since June 2007, we have been obligated to register all substances on the European market – and classify them by property – if annual quantities reach one metric ton or more. Registration is governed by the EU-wide REACH regulation (Registration, Evaluation, Authorization and Restriction of Chemical Substances). We began registering products in accordance with REACH in 2009, when we submitted a total of 45 registration dossiers (primarily for phase-in substances) to the European Chemicals Agency (ECHA). We still expect REACH implementation to cost some €3 million per year.

2009 Sees WACKER Starting to Register Products as per REACH

In January 2009, the European Regulation on Classification, Labeling and Packaging of Substances and Mixtures (CLP) took effect. It marked the EU Commission’s introduction of the United Nations’ new Globally Harmonized System of Classification and Labeling of Chemicals (GHS) to Europe. At WACKER, this involves checking, reclassifying and – where appropriate – relabeling all our products. Every substance in the EU must be reclassified by the end of 2010; the same goes for all mixtures by mid-2015.

GHS is all about globally harmonizing the classification and labeling of hazardous substances. It is up to each country to decide whether to sign up and which system modules to adopt, and when. This means considerable costs for the chemical industry. The switchover to GHS will cost WACKER some €3 million.

Overall, the legislative framework for Wacker Chemie AG did not change substantially in 2009. As a result, no additional conditions were imposed on our business operations.