August 1, 2008 - Bekaert strategy drives results
Half year results 2008
China, Brazil and innovation overcome difficult conditions in traditional markets
The Bekaert strategy, with focus on innovation, emerging markets and fast growing new industries, delivers excellent results. Top line growth reflects raw material linked price increases, an improved product mix and strong organic volume growth.
The first half of 2008 was characterized by major price rises in raw materials and energy across all continents. The size of the price increases forced Bekaert to substantially raise its selling prices at a time when overall market conditions in the Western world were not favorable, mainly in the traditional automotive and construction sectors. Tight wire rod supply conditions kept inventory levels down and forced the company to pass on price increases without delay.
Broad geographical coverage with strong focus on emerging markets offered Bekaert more resilience to economic downturn in mature markets than in previous economic cycles. As part of its strategy, Bekaert does not hesitate to invest in capacity to meet the continued growing demand in emerging countries like China and Brazil. The organic volume rise in such countries is more than offsetting the economic slowdown in mature markets, where Bekaert is being forced to streamline
Last but not least, the power of its innovation strategy and the extensive product and technology portfolio have allowed Bekaert to significantly improve its product mix, taking maximum advantage
of growth sectors like offshore, energy, mining, and clean technology.
The combination of these three elements: strong organic growth in emerging markets, an innovation based product mix, and overall price increases forced on Bekaert mainly by the higher raw material prices, resulted in vigorous growth.
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