The consequences of the financial and economic crises especially affected the chemical sector already in the summer months of 2008. Nearly all regions and sectors experienced a fall in demand, which in some cases was considerable. H.C. Starck, too, was not left completely unscathed by this downward trend, but the company initiated measures early enough to counteract the changed market conditions. In the fall of 2008, various steps were taken to make the production structures more flexible. At the same time, the core business units were restructured, the work procedures were streamlined and the decision-making processes were simplified. These measures aimed at further improving the efficiency and profitability of the H.C. Starck Group and increasing its competitive strength for the long term.

The Group generated sales of € 856 million (sales in 2007: € 905 million) in 2008. This decline compared with the previous year was largely attributed to currency effects and the sale of the Levasil business in 2008 to the Akzo Group. Adjusted for these effects, sales reached the previous year’s level.

The respective areas of the H.C. Starck Group developed differently. The Ceramics and Surface Technology Business Unit, in particular, achieved successes in the business year 2008. Surface Technology business line was able to further strengthen its market position and to press ahead with its technological leadership in the recycling of basic materials. In addition, the Electronics and Optics Business Unit boosted its business relationships to the optical industry.

The development in the individual business lines

The Hard Metals, Mill Products and Catalysts (HMC) Business Unit benefited from the high demand for its products in the European tool industry in 2008. Although sales were under last year’s level, this was mainly due to the withdrawal from the molybdenum chemicals business. Allowing for this, HMC achieved the previous year’s level of sales, despite sharply declining molybdenum prices in the fourth quarter.

A considerable slump in the Asian electronics market affected the Electronics and Optics (EOP) Business Unit in 2008, which resulted in a drop in sales of tantalum metal powder and conductive polymers. This effect was partly compensated by the strong demand from the optical industry. Since a large part of H.C. Starck’s sales are generated in Japan, but the yen to euro conversion developed poorly, the exchange rate also negatively affected results.

The growth surge of the Ceramics and Surface Technology (CST) Business Unit continued in 2008 with a further increase of sales. The Surface Technology Business Line developed very positively. H.C. Starck was able to strengthen its market position, supported by its technological leadership in the recycling of basic materials. However, business with ceramic components suffered a slight decline, due to falling demand from the automotive industry.

Despite sharply declining molybdenum quotations and the weak US$, the Fabricated Products (FPR) Business Unit, which manufactures customer-specified fabricated parts from molybdenum, tungsten and tantalum for the electronics, medical equipment and aircraft industries, was able to increase sales slightly in comparison with the previous year. Products for electronic applications played a large part in this success.

At the end of 2008, the H.C. Starck Group employed some 3,250 people at its 14 sites worldwide, compared with 3,400 at the end of the previous year.