Oil & Mining
Our journey in this business began in 2009, and at the close of 2011, driving customer-centric innovation and moving from product to application sales broadly defined our efforts.
Segment overview
As we finish the year with sales representing 13% growth on 2010, and also showing significant improvements in profitability, our actions are clearly proving to be effective. We have strengthened and improved our position in both mature and emerging markets.
The megatrends that impact our industry today are the increasing concern for the environment, water scarcity, and the strong general demand for energy, metals, and minerals. These stimulate a need for solutions that prepare water for use, employ it efficiently, and recycle it in an environmentally sound manner.
Water quality is a problem many of our customers face, particularly with the increasing need to recycle. Our product portfolio is designed to meet this growing challenge. For example, our KemGuard® antiscalants are used to address challenging scaling problems, and our AMA® biocides have proven performance in microbial control of water systems. Our polymer technologies are used to separate ores from water and employed in water fracture applications in tight shale gas formations.
Customer-centric innovation
To focus our efforts on innovation and employ them in meaningful business contexts, we have invested heavily in our applications teams. These teams play a crucial role in understanding the customer’s processes and connecting their unique challenges to our innovation pipeline. Kemira sets targets for innovation each year, and since 2009, we have exceeded these targets, demonstrating that focus on the customer can deliver true value for both the customer and Kemira. The Center for Water Efficiency Excellence (SWEET) and R&D activities allow us to develop new chemical technologies based on identified customer and market needs.
Emerging markets
In carefully selected emerging markets, we are targeting specific water applications and positioning Kemira to pursue those with rapid growth potential. In practice, we are investing in sales and application resources in key locations within these markets.
It is important for the purposes of innovation to have the customer interface connecting back to R&D. To this end, we have opened a research center in São Paulo, which will serve South America’s fast-growing oil, minerals, and metals production. We are increasing our resources in Shanghai, to capture the growth in China, complementing the 2012 opening of our plant in Nanjing.
Our focus on sustainability
Sustainable use of natural resources is an area of increasing focus in our business. At Kemira, we see our role as a sustainable company in two ways. Firstly, in terms of our own production, we look for ways of converting our raw materials to more sustainable products while maintaining our high product quality.
Secondly, as the oil and mining industries require intense water use, the need for more efficient water applications is increasing exponentially. At Kemira, we direct our development towards products and applications that address environmental concerns and supply our customers with solutions they need to succeed in a climate of increasing environmental and regulatory pressure.
2012 and beyond
The megatrends above will continue to guide our R&D activities. Our strategy remains the same, and we are building on our knowledge and experience each year, helping us and our customers to be more successful. Important focus areas for us in 2012 will be water applications for unconventional sources of oil and gas, poor ore quality, and contaminant removal from wastewater.
In continued deployment of our application-oriented model, we will add complementary technologies and continue to strengthen our knowledge base as a company. Expanding talent and expertise through recruitment and a comprehensive training program for all of our employees is a key element for continued success.
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Key Figures 2011
- Customers: Oil and mining industries.
- Market area: Global.
- Total market: The market relevant to Oil & Mining segment is approximately EUR 6 billion (Kemira’s estimate).
- Products: Oil and mining industry products and customized production
EUR million
- Revenue 335.7
- Operative EBIT 36.2
- EBIT 34.9
- Operative EBIT,%, 10.8
- EBIT, % 10.4
- Capital expenditure 9.6
- Cash flow after investments, excluding interest and taxes 28.7