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Functional Chemicals in 2007

Functional Chemicals delivered a clear improvement over the previous year. The unit reported strong revenue growth of 8%, which was driven by volumes and prices. This autonomous growth, coupled with good cost management, more than offset the raw material cost increases and the negative currency impact during 2007.

The increase in operational results was driven by the Ethylene Amines business, which performed significantly better than in 2006, when in the latter part of that year, production slowed down due to major maintenance and capacity expansion stops.

Cellulosic Specialties made further progress in improving its CMC (carboxy-methyl cellulose) business.

Salt Specialties successfully managed margins in combination with on-plan delivery of restructuring activities.

Sulfur Derivatives, on the whole, was slightly below the previous year. A strong result in Sulfur Products could not completely offset the lower performance of Polysulfides, which in 2007 faced margin pressure and start-up expenses relating to the new Taixing plant in China.

Chelates experienced a difficult year in 2007, due to the rise in raw material costs and production issues at its North American operations.

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