One fifth of the consolidated sales increase was attributed to organic growth, while the remaining four-fifths came from the net movement in acquisitions and divestments.
In China, where the market recorded strong growth last year, sales of steel cord products, mainly for truck tyre reinforcement, were up 54%. Through its investment program within the country Bekaert was able to advance its market position in China despite heightened competition. In Europe, the company recorded a lower demand for steel cord products, while in North America, the strike at Goodyear in the United States in the fourth quarter had a significant impact on sales. Already facing a steady decline in demand for steel cord products on the North American market, Bekaert decided to close the manufacturing facility in Dyersburg, Tenn.
Bekaert recorded a lower demand in other advanced wire products for the automotive sector in the mature markets. With the acquisition of Cold Drawn Products Ltd., a supplier of specialized profile wires in Western Europe, the company strengthened its position in wire products for offshore applications. The company further expanded its activities in Central Europe, thus consolidating its competitive position. In North America, Bekaert noted a distinct weakening of some industry sectors in which the company operates.
Despite the higher level of activity in Latin America, the company faced increasing competition from Asian imports and hence sustained pressure on prices. Sales benefited from a positive impact of currency movements, most notably in Brazil and Chile.
Helped by the mild winter, Bekaert maintained high sales of building products during 2006 in Europe and Asia. Sales of other advanced wire products were higher, partly due to the acquisition of ECC Card Clothing in 2005.
Sales of advanced materials were 11% higher in 2006. Bekaert achieved vigorous organic growth in fiber technologies while sales also benefited from the acquisition in June 2005 of Southwest Screens & Filters SA, which serves the industrial process filtration market. In combustion technologies, project business for industrial burner systems had a difficult year, but Bekaert advanced its position in environment-friendly burners for domestic heating systems and the recent acquisition of Aluheat, which specializes in cutting-edge technologies for condensing boilers, also contributed to this growth. In composites, Bekaert maintained its position in an extremely competitive environment.
Sales of advanced coatings were 3% higher in 2006. After two difficult quarters, industrial coatings picked up in the second half of the year. Bekaert achieved sustained growth in specialized films, mostly in North America and Asia.
