Tessenderlo Group announces a plan to improve the future performance of its Inorganics sulfates business

Tessenderlo Group (NYSE Euronext: TESB) launched in January a plan to improve the future performance of its Business Unit Inorganics. The BRIO-program aims at restoring the competitive position of the potassium sulfate business in a sustainable manner and to maintain its global top-3 position.  Since January an analysis was carried out to assess the improvement potential and to identify the financial objectives. Today, the personnel at the Ham plant are further being informed about the project.

The potassium sulfate business (SOP)  fits within the group's strategy, focusing on agriculture and food, and is a core activity for the group. However, the SOP market is changing fast, with increased competitive pressure, and the BU Inorganics is facing some internal challenges at the same time.

End of 2013, the production of feed phosphate in Ham will cease, in order to comply with the long term environmental permit, secured in 2008. As from then, customers for feed phosphates will be supplied out of the Rotterdam plant of the group (TCR).  At the same time, a broad range of improvement initiatives will be set up in order to improve the competitive position of the potassium sulfate business.

The BRIO-program aims at a total financial target of about 50 million EUR , consisting of taking out stranded cost related to the phosphate activity and profit improvement initiatives for the sulfates business, in order to turn sulfates into a sustainable, profitable business. In the coming months, details will be worked out in a number of work groups.

Sophie Haan, BU Director Inorganics, explains: "These financial targets confirm that it will be a fundamental change in how we are working today.  Our objectives are ambitious but realistic. Between 120 to 160 employees will be involved during the coming months to work out the specific initiatives. I am confident that we will succeed. "

The possible impact of the BRIO-program will be clear by the summer. Last week, an agreement was made with the social partners on job security until December 31 2014.

The group invested 18 million EUR in Ham in the previous years to prepare the site for the stop of the phosphates. In the 4Q12 results, the group reported that additional environmental provisions have been established  for about 60 million EUR , on top of 40 million EUR announced in 2008 to cover cost for soil remediation in the coming 40 years around the Ham and Tessenderlo plant.

Tessenderlo Chemie Ham employs about 540 people. The BU Inorganics produces fertilizers (potassium sulfate) and feed phosphates, exporting its products to customers globally. In potassium sulfate, Tessenderlo Group is the third largest player in the global market.  Potassium is one of the three major essential elements in plant nutrition. Potassium sulfate is especially suited for application in arid regions and for sensitive crops such as  grapes, tomatoes, citrus fruits.

Tessenderlo Group is a worldwide specialty company, focused on food, agriculture, water management and on valorizing bio-residuals. The group employs about 7,000 people and is a leader in most of its markets, with a consolidated revenue of 2.1 billion EUR in 2012.  Tessenderlo Chemie NV is listed on NYSE Eurolist by Euronext Brussels and is part of Next 150 and BEL Mid indices. Financial News wires: Bloomberg: TESB BB - Reuters: TesBt.BR - Datastream: B:Tes

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This press release is available in Dutch, French and English on the corporate website www.tessenderlogroup.com  - under 'News & Media' 

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Source: Tessenderlo Group via Thomson Reuters ONE

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