Strategic Overview
How will we improve our performance and build a stronger platform for growth?
Steve Good
Group Chief Executive
Q. How has the group evolved in the last year?
A. The Group has made good progress towards all of the medium-term growth, margin and efficiency targets which we set last year.
The strong growth in sales and profits, together with the efficient management of our assets and costs, resulted in the Group delivering good cash inflow during the year, which has further reduced the Group’s indebtedness. These factors led to a very successful refinancing late in the year which will support the Group’s medium-term growth agenda.
Our focus on innovation and geographic expansion has intensified and during the year we have taken a number of actions to ensure our growth momentum continues. We have taken the steps necessary to turn around our loss-making Yarns business and we expect this part of our business to return to profitability in 2011. The recently announced Saudi joint venture is also an important development in securing future growth, particularly for our civil engineering business.
Q. What is your vision for the group?
A. I would like to see the Group develop into a truly global performance materials business. We have excellent value-added propositions and a great range of technologies and products in Europe and the US which will have increasing relevance in emerging markets. As a Group we need to take steps to ensure we follow these emerging market developments and leverage our considerable expertise to provide new customers with products tailored to their specific needs.
Q. Are there any parts of the group that you are targeting for expansion?
A. All of our markets have good underlying growth drivers. There are number of sectors which will benefit from big global trends and have the opportunity to grow faster. The considerable infrastructure spending which will take place in Asia, the Middle East, the Indian subcontinent and South America will benefit our civil engineering activities. The urbanisation trend, as the population increasingly migrates to urban areas, will also benefit civil engineering and parts of our building products business. The increasing demand for food as populations grow and average incomes rise, particularly in emerging markets, will offer significant opportunities for smart agrotextile products which maximise yield, reduce the need for agrochemicals and limit water requirements. The other big trend which will ultimately affect all our markets is sustainability. Consumers will increasingly drive industrial businesses to manufacture products with acceptable end-of-life solutions and made increasingly from renewable resources and recycled materials. This is both a challenge and significant growth opportunity and one which will be central to our innovation activities over the coming years.
Q. Will the group remain solely focused on organic growth?
A. There is plenty of scope to grow the business using innovative products in our heartland and targeting high growth geographies with our speciality propositions. To maximise the growth opportunities we will need to invest selectively in new manufacturing assets or through bolt-on acquisitions in growth markets. Any acquisitions would augment and be clearly aligned to our organic growth strategy, and the work we have done to improve trading and debt levels leaves us in good shape to do this.
Q. What is the main focus for the year ahead?
A. We need to continue to make progress on the three elements of our growth strategy:
- Focusing on where the growth is in terms of both markets and geographies
- Improving our innovation to increase our market share
- Driving higher operational and asset efficiencies and in particular achieving the turnaround of the Yarns business
In addition we aim to significantly improve our health safety performance and establish a culture with a zero tolerance for accidents and a mindset which puts safety first at all times.
