Toll manufacturing
Slimmed down, but not gone
By making our phthalic anhydride and phthalates production and business independent, the business unit Toll Manufacturing has been considerably slimmed down. This doesn’t mean that Proviron bids its tolling activities farewell, but it does illustrate a strategy change.
About half of Proviron’s tolling activities consisted of the phthalic anhydride and phthalates production (Proviron Basic Chemicals), which were made independent in 2008. This independence and intended divestment of Basic are part of the focused strategy in which renewable raw materials and functional chemicals increasingly play a leading part. For classic chemical activities on the other hand, there is less and less room. Some 60% of toll manufacturing contribution will disappear when Basic is sold to a third party.
Evolution contribution
Investing critically
The reduced importance of tolling in Proviron’s portfolio is also illustrated by a critical approach towards new investments in that business unit. We ask customers more explicitly to make a financial commitment beforehand. On top of that we request tolling fees to reflect market prices better. This approach has been successful: tolling projects currently being researched are clearly more profitable and the customer pays the research.
Customer remains king
Toll manufacturing traditionally represents an important turnover contribution (about 60 %, Basic included). This provides Proviron with an important and predictable cash flow. We therefore will keep our existing production and business in Ostend, Hemiksem and Friendly (USA). Limited investments remain possible in these sites to allow them to be safe and profitable, and to expand if required. Apart from that, it is clear that the tolling customer will be served in a qualitative manner, something the customer has come to expect from Proviron.