25
ACTIVITY REPORT LA SEDA DE BARCELONA
ACTIVITY REPORT
LA SEDA DE BARCELONA
LA SEDA DE BARCELONA
Activity Report
2006
Letter from the Chairman
Board of Management
LA SEDA DE BARCELONA Group Directors
Most signifi cant events
Activity Report
48
50
52
54
58
2006
48 49
The scenario is a promising one. In 2005, world demand for PET resin reached 11.3 million tons, and the most encouraging aspect is that forecasts point to continuous growth of 7.6% to 2010. Furthermore, demand in Western Europe reached 3.5 million euros in 2006 and is expected to increase by 5% a year until 2010.
The main fi gures of LA SEDA DE BARCELONA give a very encouraging table, with sales of 1.6 million tons, invoicing in excess of 1,400 million euros and a presence on the majority of the rungs of the value chain of the Polyester Industry. These are the powers of a fi rm that in PET has found its market niche after years of hard migration from the traditional textile to the chemical sector. From now on, the Grupo SEDA will row with the current, “new winds are blowing” and this has been seen by the analysts and investors who are rewarding the company with a stock market value clearly on the rise, in a year when historical records have been broken in contracting.
From the strategic perspective, this vertical integral presented by LA SEDA DE BARCELONA enables, amongst other things: technology to be supplied to others, such as the NHR factories in Russia; new PTA projects to be started, such as the 700,000 tons expected in Sines (Portugal) or recycled PET projects, thanks to the purchase of 60% of the company RPB.
In addition to the business derived from the vertical integration in the Polyester chain, the Company has stamped an alliance with CIE Au-tomotive for the creation of biodiesel plants to maximise the profi tability of the sites the Group already has. With respect to fi bres, we have created an alliance with Montefi bre to constitute a joint company: Fibras Europeas de Poliéster (European Polyester Fibres), in which we currently have a 19% holding.
Now, our objective in the near future is to complete the integration process in which we are immersed and achieve the synergies and benefi ts of this new industrial reality, for which it is essential to carry out a solid work of adaptation and consolidation of these new subsidiaries.
Following the purchase of the Eastman PET plant in San Roque, horizontal growth is now complicated as we have reached a truly considerable size. LA SEDA DE BARCELONA has become a large group integrated vertically, with a capacity for licensing technology and to supply its own raw materials, and not discard continuing to grow “upstream” (raw and recycled materials) and/or “downstream” (PET transformed products).
This new industrial reality replies to the dimension that corresponds to us as a European PET leader, the third largest producer in Europe of PTA and the only producer in Spain of Ethylene Oxide and Glycol. Having reached this point, I thank you once more for the confi dence you have placed in LA SEDA DE BARCELONA, in our shareholders, customers, suppliers and employees who with us have overcome the long path of our slow conversion, not forgetting those who have recently come into our Group. To the former, I thank you for your effort and invite you to continue in the plenitude that awaits you; to the latter I simply say that the future belongs to us all.
RAFAEL ESPAÑOLChairman of La Seda de Barcelona
Dear Shareholders,
In my previous intervention, during the General Assembly of Shareholders held in June, I advised you that the year 2006 would be written in large letters in the history of LA SEDA DE BARCELONA, and this has been con-fi rmed. I am pleased to inform you on behalf of the company, that in under a year we have fulfi lled our commitments and are prepared to present you with a new industrial reality: We are a chemical multinational and have reached European leadership among PET producers.
Remember that in this brief, but intense stage, our imperative has been to grow. And we have grown through an ambitious, but well-studied, plan, our Purchasing Programme that has made us the most important PET and PTA producer on the old continent, with an installed capacity of 975,000 tons and 670,000 tons, respectively. The SEDA GROUP is an industrial project with a future made reality and with an international weight backed by the presence of the Group in Spain, Portugal, Italy, Greece, Turkey, the United Kingdom and Rumania. These strategic purchases also extend the overall coverage of our customers.
The year 2006 is also characterised by the achievement of two large fi nan-cial operations that have received the approval of the market. I refer to the fact that thanks once more to the confi dence of the company shareholders in our industrial project, we once more successfully covered 100% of a capital share of 419 million euros (stock premium included), the second largest operation in the Spanish stock market in recent years. And secon-dly, though no less important, Deutsche Bank’s stake on the growth of LA SEDA DE BARCELONA, with the awarding of a loan for 405 million euros. This credit has backed up the fi nancial structure of the Company so that it might take on its phase of expansion and growth with solvency, which has also represented the support of the fi nancial community for the LA SEDA DE BARCELONA project.
We now start a new fi nancial year, 2007, with the excitement of continuing to see the growth of a large industrial group integrated vertically in the polyester production line. The growing international expansion and the new industrial reality of our Company stake on a structural reorganisation replying to the new challenges posed by the 21st century. With the latest purchases, we now face the challenge of the integration process - which all large corpora-tions have to overcome - and the redesign of the PET Division. In this sense, in the fi rst quarter of 2007, ARTENIUS - Art and Genius -, the original form we have used to design the main division of the Group, has started to con-centrate the activity of the core business of the Company, the PET.
LETTER FROM THE CHAIRMAN
50 51
MODIFICATIONS TO THE BOARD OF MANAGEMENT
In the period from the fi rst of January 2006 to 31st March 2007,
the following changes took place in the composition of the com-
pany administration:
Expiry, re-election and appointmentof Members by the Board:
At the end of the mandate of INVERCARTERA, S.A., the Company
did not asked for the post to be renewed and the Ordinary General
Assembly of Shareholder of 12th June 2006, agreed, by substitu-
tion, to appoint the Grupo EBN BANCO, through their subsidiary
Liquidambar Inversiones Financieras, S.L.. Approval was also gi-
ven to re-electing Vicent Ignasi Blanes Tort, José Manuel Fandiño
Crespo, José Luís Morlanes Galindo, FIATC MUTUA DE SEGU-
ROS Y REASEGUROS A PRIMA FIJA and Ferran Conti Penina as
members of the board.
Present at the event, those re-elected thanked the Board for
their appointments and accepted their position. Liquidambar
approved the appointment in its Board of Management of 25th
September, and designated Francisco Javier Saiz Alonso, the
general assistant manager of Caja Castilla La Mancha as their
personal representative.
Dismissals and Appointments by Co-opting:
In the Board of Management on 10th October 2006, the Board
Member Ferran Conti Penina handed in his resignation, which was
admitted by the Board, which thanked him for his services and
management and appointed Caixa Capital, of Grupo Caixa Geral
de Depósitos de Portugal, by co-opting to cover the vacancy, which
designated Jorge Humberto Correia Tomé as its representative.
As a result of the portfolio restructuring of the Ibersuizas Group,
the members Ibersuizas Alfa, S.L., and Ibersuizas Participadas,
S.A. handed in their resignation at the meeting of the Board of
Management on 23rd November 2006. The Board accepted both
resignations and recognised their management, thanking them for
the services they had given. The Board appointed the companies
of the same group IBERSUIZAS GESTIÓN ALFA, S.L. and IBER-
SUIZAS GESTIÓN GAMMA, S.L. by co-opting by substitution, re-
presented by Juan Luis Ramírez Belaústegui and Jorge Delclaux
Bravo, respectively.
MODIFICATIONS TO THE BOARD OF MANAGEMENTBOARD OF MANAGEMENT
C H A I R M A N
Mr. Rafael Español Navarro
VICE-CHAIRPERSONS
Mr. Joan Castells Trius
Mr. Fernando Freire Sousa
Mr. Francesc Robert Ribes
MEMBERS
Mr. Vicenç Ignasi Blanes Tort
Mr. José Manuel Fandiño Crespo
FIATC Mutua de Seguros represented by Mr. Joaquim Mª Gabarró Ferrer
Ibersuizas Gestión Gamma, S.A.represented by Mr. Jorge Delclaux Bravo
Ibersuizas Gestión Alfa, S.A. represented by Mr. Juan Luís Ramírez Belaústegui
Liquidambar Inversiones Financieras, S.L. represented by Mr. D. Francisco Javier Saiz Alonso
PC Siglo XXI Invesiones Bursátiles S.L. represented by Mr. D.Gustavo Pérez Carballo
Caixa Capital – Sociedade de Capital Risco represented by Mr. Jorge Humberto Correia Tome
Mr. José Luis Morlanes Galindo
Mr. Ramón Pascual Fontana
Mr. Jacint Soler Padró
Mr. Nuno Ricardo Gaioso Jorge Ribeiro
SECRETARY (non board member secretary)
Mr. Albert Carrillo Carrillo
ADVISORS
Mr. Joan Majó Cruzate
Mr. Joan Poch Serrats
Esteve Español Navarro, General Secretary of LA SEDA DE BARCELONA who passed away on 3rd june 2006.
52 53
CHAIRMAN Rafael Español
FUNCTIONAL MANAGEMENT BODIES
CHEMICAL DIVISION MANAGEMENTAurelio González-Isla
CORPORATE MANAGEMENT BODIES
GENERAL SERVICES MANAGEMENT-PRATXavier Domingo
TECNOLOGY MANAGEMENTRui Vaz Sousa
NEW BUSINESS MANAGEMENTAurelio González-Isla
PTA DIVISION MANAGEMENTRui Vaz Sousa
PET DIVISION MANAGEMENTSinforiano Sisniega
TRANSACTIONS DIRECTORSMark KenrickElias Vafopoulos
PLANT DIRECTORSAdana - Inegol (Turquía): O. KutevuEl Prat de Llob. (Spain): J. FoguetPortalegre (Portugal): J. MacedoSan Giorgio (Italia): G. BertínTarragona (Spain): R. FerrúzVolos (Grecia): D. FilippouWilton (U.K): G. Conroy
FINANCIAL DIRECTORSItalia: S. SebastianuttoPortugal: C.H. PereiraReino Unido: P. RidsdaleTurquía: A. Kazbek
CORPORATE MANAGEMENTJoan Brat
FINANCIAL MANAGEMENTCarlos Sanz
LEGAL MANAGEMENTAlbert Ramos
HUMAN RESOURCES MANAGEMENTLluís Ribas
LA SEDA DE BARCELONA GROUP DIRECTORS
54 55
LA SEDA DE BARCELONA purchases a majority holding in VOLOS PET INDUSTRY
On 22th December 2006, LA SEDA DE BARCELONA purchased
51% of the Greek Volos PET Industy (VPI), the only PET producer
in Greece and the Balkans. The strategic location of its production
plant, 15 Km. from the port of Volos, has enabled LA SEDA DE
BARCELONA to increase its market coverage to Eastern Europe.
The price of the holding was 18.5 million euros.
In June 2007, a further 14% will be purchased of the Greek com-
pany, for a price proportional to the fi rst purchase.
LA SEDA DE BARCELONA sells the textile subsidiary Industrias Químicas Textiles ( INQUITEX)
Within the framework of the strategy of concentration and expan-
sion in the PET polymer business, LA SEDA DE BARCELONA re-
ached an agreement with the company Rumblefi sh for the sale of
the subsidiary Industrias Químicas Textiles (INQUITEX), speciali-
sed in the production of polyamide fi bres, fi bres for the car sector
and plastic laminates. The amount of the sale was agreed at 24
million euros.
Constitution of FIBRACAT EUROPA for the creation of a joint venture with the Italian group MONTEFIBRE
On 31st October 2006, LA SEDA DE BARCELONA and the Italian
group Montefi bre - European leaders in polyester fi bres - reached
an agreement for the creation of a joint venture. Both compa-
nies have contributed their respective polyester fi bre businesses
in order to strengthen their position in the European market and
benefi t from the synergies caused by the rationalisation of costs,
production processes and joint commercial actions. To develop
this operation, LA SEDA DE BARCELONA constituted the com-
pany Fibracat Europa by bringing in its polyester fi bre business in
El Prat de Llobregat. The new company started to operate inde-
pendently on 1st November 2006.
As a result of the fi rst objective, on 21st December 2006, Fibras
Europeas de Poliéster, S.L. was constituted. This new company
will be engaged in the production and commercialisation of the
polyester fi bres that Fibracat Europa and Montefi bre produce
in their facilities in El Prat de Llobregat (Barcelona) and Acerra
(Italy). LA SEDA DE BARCELONA has a 19% holding in this new
company, Fibras Europeas de Poliéster.
Agreement with the Portuguese government to set up a PTA production plant in Sines (Portugal)
The LA SEDA DE BARCELONA Board of Administration agreed
on 30th November 2006 to negotiate with the Portuguese govern-
ment, specifi cally with the Agencia Portuguesa para o Investimen-
to (API), to reach an agreement to build a PTA production plant on
the Sines industrial estate (Portugal), with a production capacity of
700,000 tons a year.
The project, which would suppose an approximate investment of
360 million euros, has been qualifi ed by the Portuguese gover-
nment as a Project of National Interest, which means that they
can opt for the programmes of aid and community subsidies to
be specifi ed.
LA SEDA DE BARCELONA purchases 19.1% of the Italian company SIMPE
As a result of the comprehensive agreements reached with Mon-
tefi bre, on 22st December 2006, LA SEDA DE BARCELONA pur-
chased 19.1% of the Italian company Simpe, owned by Montefi -
bre, for 7 million euros.
The Italian company owns an industrial plant engaged in the ma-
nufacture and commercialisation of polyester polymers and will
soon carry out the necessary industrial investments needed for it
to produce 150,000 tons./year of PET polymers. To carry out this
operation, the Italian company will agree on a capital increase that
will be subscribed entirely by LA SEDA DE BARCELONA, thus
becoming the main shareholder of Simpe.
The purchasing policy places LA SEDA DE BARCELONA as the multinational leader in the European PET market
The shareholders of LA SEDA DE BARCELONA subscribe to 100% of he capital increase for 419 million euros
The Shareholders’ Assembly held on 12th June, approved a capi-
tal increase for 418,721,946 euros, an operation entirely covered
in the preferential subscription period. The resources brought in
by this call to market have been used in the Industrial Expansion
Plan designed by LA SEDA DE BARCELONA to achieve leadership
in the European market of PET polymers.
A fi nancing line is signed with DEUTSCHE BANK SAE for 405 million euros
On 16th June 2006, LA SEDA DE BARCELONA and Deutsche
Bank SAE signed a fi nancing line for 405 million euros, one of the
largest operations in the Spanish capital market in recent years.
With this credit from the German bank, the Company has streng-
thened the fi nancial structure of the new Group.
LA SEDA DE BARCELONA signs the purchase of 100% of SELENIS POLÍMEROS and SELENIS ITALIA
On 15th February 2006, LA SEDA DE BARCELONA signed the
purchase of 70% of the Portuguese company Selenis Polímeros
and the Italian Selenis Italia (now Artenius Portugal and Artenius
Italia), with a PET production plant in Portugal and two plants in
Italy, respectively. The operation was completed in late July with
the purchase of the remaining 30%, for the global amount of 80
million of euros for both acqusitions.
LA SEDA DE BARCELONA purchases the PET and PTA production plants of ADVANSA B.V.
On 28th July 2006, LA SEDA DE BARCELONA reached an agree-
ment in London with Advansa BV (Sabançi Group) for the purcha-
se of its industrial assets of PET, Pre-forms and PET and PTA for
320 million euros. This purchase includes the production plants
in the United Kingdom, Turkey and Rumania, in addition to the
technology that LA SEDA DE BARCELONA might licence out. With
this operation, the Spanish Company has become the European
leader in the sector and opens the doors to PTA, the raw material
used to produce PET polymers.
MOST SIGNIFICANT EVENTS 2006
LA SEDA DE BARCELONA establishes the fi nancial bases for taking on the Industrial Expansion Plan
56 57
ADVANSA UKnow:
ARTENSA TURKY now:
ADVANSA ROMANIA now:
SELENIS ITALY now:
SELENIS PORTUGAL now:
CATALANA DE POLÍMERS, Polyester DivisionLA SEDA DE BARCELONA
now:
VOLOS PET INDUSTRY now:
ECISA SPAIN (in process):
San Roque
In its structural reorganisation process, LA SEDA DE BARCELONA
has concentrated the activity of the PET division of the new Group
under the ARTENIUS trademark. A specifi c division has also been
LA SEDA DE BARCELONA regroups the PET activity under the ARTENIUS trademark
created for PTA and the Technology and New Business divisions,
which along with the Chemical Division, make up the structure of
the new Group.
As a result of this reorganisation, the company names and corpo-
rate image have changed of the different subsidies to adapt them
to the new ARTENIUSAlliance with CIE AUTOMOTIVE for the development of biodiesel plants
On 6th February 2007, LA SEDA DE BARCELONA and Cie Au-
tomotive, through the holding Bionor Transformados, constituted
the company Biocombustibles LA SEDA, S.L., with a 60% holding
for LA SEDA DE BARCELONA.
With this business alliance, both companies hope to take advan-
tage of the different production sites controlled by LA SEDA DE
BARCELONA, the majority of which are ideal for the development
of these kinds of activities and the proven experience and mana-
gement capacity of Bionor in the area of bio fuels. The alliance
also hopes to benefi t from all the economic-industrial synergies
that the agreement between the companies will enable.
The fi rst project planned is the introduction of a biodiesel plant in
the IQA-LSB facilities in Tarragona, with an estimated investment
of 45 million.
Agreement for the purchase of the PET plant of EASTMAN CHEMICAL in San Roque
On the past 20th February 2007, LA SEDA DE BARCELONA re-
ached an agreement with Eastman Chemical on the purchase of
their PET plant in San Roque (Cadiz). This operation will be ca-
rried out after receiving the corresponding authorisation from the
Service in the Defence of Competition, for 40.5 million euros. This
fi gure includes the working capital, estimated in 15 million euros.
With the purchase of the plant in San Roque, LA SEDA DE BARCELONA
has reached a production capacity of nearly one million tons of PET a year.
Agreement for the purchase of 60% of the company RECICLADOS DE PLÁSTICOS BARCELONA
On 6th March 2007, LA SEDA DE BARCELONA reached an agree-
ment for the purchase of 60% of the recycling company, Recicla-
dos de Plásticos Barcelona, with a production plant in Balaguer
(Lleida), for 2.6 million euros.
With this purchase, LA SEDA DE BARCELONA has completed the
PET production cycle and taken a further step in the Policy of Cor-
porate Social Responsibility of the Company, as it will initially bring
7,000 tons a year of recycled PET on to the market.
2007
ACTIVITY REPORT
60 61
INTERNATIONAL
ARTENIUS ITALIA, S.p.A.
SIMPE, S.p.A.
HOLLAND
ITALY
ARTENIUS PORTUGAL,
INDUSTRIA DEPOLIMEROS S.A.
ARTENIUS SINES PTA, S.A.
SELENIS SERVICIOS,
S.R.L.
PORTUGAL
100 %
100 % 50 %
100 %
19 %
ARTENIUSHELLAS
HOLDINGS, S.A.
GREECE
100 % 51 %VOLOS PET INDUSTRY
March 31st 2007.
ARTENIUS ROMANIA, SRL
ROMANIA 100 %
TURKEYARTENIUS
TURKPET KIMYEVI100 %
ARTENIUS HOLDING, B.V.
UK
100 %
ARTENIUS PENSIONTRUSTEES Ltd.
ARTENIUS UK Limited
100 %
100 %
INDUSTRIAS QUÍMICAS ASOCIADAS LSB, S.L.
CARB-IQA DETARRAGONA, S.L.
ANERIQA, A.I.E.
NATIONAL
FIBRAS EUROPEASDE POLIESTER, S.L.
FIBRACAT EUROPA, S.L.
SLIR, S.L.
PETROLEST, S.L.
50 %
90 %
100 %
10 %
100 %
FIDION, S.R.L.
100 %
100 %
60 %
49 %
*BIOCOMBUSTIBLESDE LSB, S.L.
100 %
*ARTENIUS SAN ROQUE S.A.
(in incorporation)
60 %*RECUPERACIONES
DE PLASTICO DEBARCELONA, S.L.
19 %
*Incorporated companies in the consolidation perimeter during the year 2007.
LA SEDA DE BARCELONA
COMPANY STRUCTURE
62 63
PREFORMS CHEMICALS PTA FIBRE
TurkeyTurkeyGreece
RomaniaSpain UK Spain Italy
ARTENIUSTurkPet
ARTENIUS TurkPet
ARTENIUSHellas
ARTENIUSRomania
IQA-LSB ARTENIUS UK
FibracatEurope
Fidión
130 66(b) 125 670 22 22
100% 100% 100% 100% 19% 19%
PET
Spain Italy Portugal Greece UK
Name
InstalledCapacity (a)
LSB share at31 Dec. 2006
LA SEDA DE BARCELONA
ARTENIUS PRAT
ARTENIUSItalia
ARTENIUSPortugal,
Industria de polímeros
ARTENIUSHellas
ARTENIUSUK
170 200 70 80 150
100% 100% 100% 51% 100%
(a) In thousands of tonnes/years until Dec. 2006
(b) Preforms production is in Turkey (50 KT) Greece (6 KT) and Romania (10 KT)
Afterwards, LA SEDA DE BARCELONA buys the factory of Eastman Chemical in San Roque (Cadiz) whit a PET capacity production of 175.000 tonnes per year and a further 14% aditional of Artenius Hellas in June.
BUSINESS STRUCTURE
LA SEDA DE BARCELONA
64 65
The year 2006 for LA SEDA DE BARCELONA meant the achieve-
ment of the plan of development and international expansion de-
signed by the Company in 2005. This plan contemplated an initial
stage of fi nancial consolidation, which has brought the necessary
long term stability for them to be able to concentrate on the com-
pany growth operations. With this priority objective, a syndicated
loan was negotiated and signed for a total 470 million euros, whi-
ch has enabled the refi nancing of the existing debt in a single,
long term package. Of this total amount, 75 million were a bridge
loan to the capital increase of July 2006. Afterwords the given that
was extended in 10 million of euros for investments. Thus, the trial
amount adds up to 405 million of euros.
At 31st December 2005, the percentage short term debt was
47.18% of the total, whereas at 31st December 2006 it was
6.62% due to a loan for 405 million euros granted by Deutsche
Bank backing up the group structure.
With respect to the Stockholders’ Equity, the Company carried out
a capital increase for 419 million euros (stock premium included).
The purpose of the increase was to provide the Company with the
necessary resources to complete the purchase programme already
up and running, and at the same time to maintain a fi nancial so-
lidity to assure the means for the success of the project. LA SEDA
DE BARCELONA has set the objective of maintaining and indebte-
dness of no more than 3.50 times the operative cash fl ow.
With this structure, purchases have been made of companies fo-
llowing criteria that were expected to facilitate the future success
of the project, such as production effi ciency, geographical loca-
tion, available technology, etc.
Independently of the possible operations that complete the pro-
ject, LA SEDA DE BARCELONA has started a deep internal reor-
DESCRIPTIVE TABLE SYNDICATED LOAN
Amount Amortisation Objetive Situation at 31/12/06
Tranche A 65 mill./euros 7 years Refi nancing Group debt Lay-out 65 mill./euros
Tranche B 190 mill./euros 8 years Refi nancing Group debt Lay-out 190 mill./euros
Credit line 50 mill./euros 7 years Financing Manoeuvre Fund Lay-out 50 mill./euros
Loans forInvestments 100 mill./euros 7 years Investment fi nancing Lay-out 86,5 mill./euros
YEAR 2006
ganisation process that will allow it to progressively integrate the
new Group to be able to defi ne the benefi ts and synergies of this
new organisational structure. The areas of organisation, technolo-
gy, accounting, logistics, treasury, engineering, etc. are developing
new projects and initiatives in this way.
In 2007 the income statement is expected to start to refl ect the
benefi ts of the scale economy, logistics and productive rationali-
sations, etc.
Seda Group 2007
Eastman
Equipolymers (DOW)
NEO GROUP
Mossi Gisholfi
Invista (Kosa)
NovaPet (Brilen)
INDORAMA
LSB 2004
ELANA
SK Eurochem
CEP Tergal
VELLMAN
Thousand Tons0 150 300 450 600 750 900
CONSOLIDATION PROCESS: NEW GROUP’S POSITIONING
200.000
180.000
160.000
140.000
120.000
100.000
80.000
60.000
40.000
20.000
01996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
PET Polymers PET Fibres Basic Chemical
Tonn
es /
Year
EVOLUTION OF THE PRODUCTION IN SPAIN
*
975.000 tonnes/year
Eastman plant in San Roque (Cádiz). Date of incorporation into Seda Group May 2, 2007.
66 67
LA SEDA DE BARCELONA has made a considerable effort in pur-
chasing companies on the market, while maintaining a high rate
of investment in the productive facilities of the Group. LA SEDA DE
BARCELONA stakes on continuous improvement of production,
as there is great competition in these markets that implies the
need to make producers more effi cient.
The most important projects they have taken on or fi nished in
2006 were:
• Start of the construction of a polygeneration plant in El Prat
de Llobregat (Barcelona) of 7.5 MWh. to allow energy savings of
around 35%. This installation will start working in the fi rst quarter
of 2008 and represents an investment of 8 million euros.
• In the fi rst quarter of 2006, investment was completed in a po-
lycondensation unit in the plant in St. Giorgio (Italy), which meant
an increase in capacity of 35,000 tons/year, and also reduced the
costs of energy and maintenance by 3.6 million euros a year. This
unit involved an investment of 9.2 million euros, which was com-
plemented by different actions to improve quality and safety, with
an outlay of 570,000 euros. The construction of new silos in the
Italian plant caused an investment of 900,000 euros. .
• In the Volos-VPI plant (Greece), investment was made in a se-
cond pre-form injection machine for 950,000 euros, representing
an increase in capacity of 3,000 tons/year. The safety and thermal
oil heating systems were also improved with an additional outlay
of 630,000 euros.
• In the Wilton plant (United Kingdom), in 2006 investments were
made of 6.5 million euros, ending in 2007. These investments are
framed within the policy of reducing environmental impact, as it
reduces the disposal of waste waters.
• A number of small individual actions were carried out in the IQA
plant in Tarragona, which together amounted to an investment of
over 5 million euros. This investment effort has brought about an
improvement in productivity, safety and equipment renewal.
With these purchases, the Company now has access to different
technologies and productive processes. LA SEDA DE BARCELONA
hopes that this Know How might be spread to all of the production
plants, taking advantage to introduce the “best practices” of each of
them in the rest of the subsidiaries. Through this new change, it is
hoped that the annual rate of investment might grow signifi cantly to
the benefi t of maximising productivities and minimising costs.
INVESTMENTS
PET57%
CHEMICALS23%
FIBRES14%
OTHERS6%
DIVISION SALES DISTRIBUTION 2005(percentage in €)
DIVISION SALES DISTRIBUTION 2006(percentage in €)
DIVISION TONNES DISTRIBUTION 2005 (tons./year)
PET45%
CHEMICALS42%
OTHERS3%FIBRES
10%
PET78%
PREFORMS1%
FIBRES2%
CHEMICALS14%
PTA5%
DIVISION TONNES DISTRIBUTION 2005 (tons./year)
PET69%
PREFORMS1%
FIBRES2%
CHEMICALS21%
PTA7%
GROUP SALES DISTRIBUTION
68 69
(Quotation on the stock market graphic SED and IBEX comparable index)
150.000
160.000
140.000
130.000
120.000
110.000
100.000
90.000
La Seda de Barcelona
IBEX 35
1.200
1.000
800
600
400
200
2001 2002 2003 2004 2005 2006
Mill
ions
Eur
osMarket Capitalization
MARKET CAPITALIZATION LA SEDA DE BARCELONA
LA SEDA - IBEX 35 AÑO 2006
1.008.625.503
217.421.82161.815.058 93.222.50757.865.94757.710.000
JAN JAN JAN FEB FEB MAR MAR APR APR MAY MAY JUN JUN JUL JUL JUL AUG AUG SEP SEP OCT OCT NOV NOV DEC DEC DEC
STOCK MARKET EVOLUTION
In 2006, the LA SEDA DE BARCELONA quotation accumulated
a revaluation of 41.2%, which, along with the revaluation of the
year 2005, supposes an increase of over 100% in two years. This
behaviour of the share lies above the rises refl ected in the same
period by the reference index of the Spanish market, the Ibex-35,
which ended the year with an increase of 31.1%, whereas the
IBEX Small Caps, the index of which the company formed a part
throughout the year, was revalued by 52.4%.
The Stock Exchange year was characterised by the extension of
the change of dimension started the previous year with the in-
crease carried out with the purchase of Selenis Polímeros and
Aussapol (now Artenius Portugal and Artenius Italia respectively),
which was continued by a further increase this time resulting from
the purchase of the Turkish company Advansa and the Greek Vo-
los. This supposed passing from 101.5 m of shares at the end of
2005, to 416.78 m today, of which 35.8 m corresponded to the
conversion of obligations carried out in mid-February. This increa-
se in the number of shares meant, along with the above-mentio-
ned share revaluation, that the capitalisation of the company at
the end of the year was 1,008.6 m, 4.6 times the capitalisation
with which it had started 2006. An increase of 363.9%.
The average volume negotiated grew in consonance with the di-
mension of the company, passing from 21.2 m shares in 2005 to
1,068.7 m in 2006, with a daily average titles negotiated of 4.22
m shares.
These two factors, the liquidity and the increase in capitalisation,
allowed the company to pass from the Ibex Small Cap, to which it
belonged, to the Ibex Medium Cap, which comprises, as the name
suggests, a selection of the Spanish companies of medium capita-
lisation. Our company will have a weight of 2.38% in this index
Throughout the whole of 2006, LA SEDA DE BARCELONA main-
tained a clearly rising behaviour, reaching an annual maximum of
2.64 euros (15th December 2006), with the data corrected by the
number of new shares, and having quoted in 100% of the working
sessions (256).
In 2006, LA SEDA DE BARCELONA carried out operations that
modify its share capital.
The General Assembly of Shareholders of 12th June 2006 agreed
on a capital increase of 418,721,946 euros. This operation was
carried out through the issue and circulation of 279,147,964 sha-
res with a par value of 1 euro each and an issue premium of 0.50
euros per share, and was entirely subscribed.
Furthermore, in 2006 two conversion periods expired of the emis-
sion of obligations convertible into shares of LA SEDA DE BARCE-
LONA from July 2005. The fi rst period ended on 10th February
2006 and a total 35,847,883 shares exercised their right to con-
version, some 94.4% of the total issue. The second conversion
period ended on 10th August 2006, with the conversion of a total
192,569 shares. In the fi rst period, the conversion was carried out
at a fi xed price of 1.25 euros/share, so the Share Capital increased
by 36 million euros, and the Stockholders’ Equity by 45 million
euros. In the second period, the conversion price was calculated
from the average quotation in the last 65 days, with a discount of
10%, which represents an increase of 193 thousand euros in the
Share Capital and has left the stockholders’ equity of the Company
at 31st December 2006 on 682 million euros.
With all of these operations and the application of the results of
the year, the net wealth of the Company evolved in the following
manner:
SHARE CAPITAL
Date
01/01/06
31/12/06
Share Capital (Euros)
101.598.982
416.787.398
70 71
LA SEDA DE BARCELONA entered this market by converting its
polyester fi bre production capacity to PET on a small scale in the
1980s; more so in the 1990s and as a strategic product in the
past 5 years. With an initial annual production capacity of 35,000
tons/year in 1997, this grew to 170,000 in 2005. The purchases
of Selenis Polímeros (now Artenius Portugal), Selenis Italia (now
Artenius italia), Volos PET Industry (now Artenius Hellas) , the
Advansa plants in the United Kingdom and Turkey and Ruma-
nia (now Artenius UK, Artenius TurkPet and Artenius Romania
respectively) and the recent purchase of the Eastman production
plant in San Roque (Cadiz), have increase the installed PET poly-
mer production capacity of the new Group to practically a million
tons a year.
DIAGRAM OF THE PET PROCUCTIVE PROCESS
OIL
PARAXYLENE(PX)
OXYGEN(O2)
ETHYLENE
ETHYLENE OXIDE (EO)
H20
MEGPTA
POLYESTER RESIN
FIBRE PET
PREFORMS
CONTAINERS
BUSINESS UNITS
PET polymer is the strategic business of LA SEDA DE BARCELO-
NA, which, with the industrial investments carried out in 2006,
has achieved leadership in the sector in Europe.
Technically, PET is known as Polyethylene Terephthalate and is
a polyester of the thermoplastic family, materials that are easily
mouldable when heated. PET is a plastic with an ideal behaviour,
as in its manufacture no waste is caused and its chemical compo-
sition allows a certain degree of regeneration. This polymer, thanks
to its characteristics, has begun to be used massively in recent
decades with great success.
At fi rst, PET was only used in manufacturing textile fi bres, but the
mechanical and chemical properties of this polymer opened new,
promising application in the fi eld of packing food and drink. Its
excellent shine, transparency, high resistance to impact, low per-
meability to gases and dimensional stability guarantee the requi-
rements demanded of packs intended for preserving and trans-
porting products for foodstuff use. Its small weight implies large
savings in transport, and fundamentally user safety in the event of
possible breakage.
Furthermore, thanks to its composition, PET is the most re-
cyclable resin, and is identified with number 1 (surrounded
by three arrows for form a triangle) on the bottom of the
pack. Moreover, the use of PET results in many benefits,
such as the drastic reduction of the energy used in trans-
port, the simplicity of the procedures and the temperatures
(250º C) to which PET must be submitted to be able to be
transformed into new products, which are also recyclable.
The growth in demand in recent years is explained by the
fact that PET has replaced other kinds of materials in many
of their uses.
PET consumption throughout the world has grown by 10%
a year since 1995, and this rate is expected to be maintai-
ned due to the increase in demand for the new applications
mentioned above. Due to the high logistics costs, the geo-
graphical coverage of PET producers becomes strategic as
they come closer to their customers. The increased demand
in Western Europe is expected to be largely covered by local
producers. This estimated demand in Western Europe is 3.5
million tons/year, and is expected to grow at rates of between
6%-8% a year.
The price of PET is related to the price of the raw materials. PET
prices are expected to end up moving in the same line as PTA and
MEG, and that following the large increase suffered in 2005 and
2006 they will stabilise in 2007. Furthermore, the price of PET is
also affected by offer and demand.
The current dimension of the LA SEDA DE BAR-CELONA Group has made it necessary to reorga-nise into fi ve divisions:
PET Division
72 73
With all of these purchases, LA SEDA DE BARCELONA has beco-
me the largest producer in Europe with a market share of close
to 32%, more than double its closest competitor, and with a geo-
graphic coverage incomparable with that of the other PET pro-
ducing companies. These magnitudes place it in an unbeatable
position with regard to the market, as it is the only company capa-
ble of offering a comprehensive service and guaranteeing supply
through several plants, and unbeatable logistics.
One of the main challenges this year has been to homogenise the
productive processes of each of the purchased plants in order to
be able to offer exactly the same product, regardless of where it
is produced, in order to take advantage of the above mentioned
competitive advantages.
MEG, PTA AND PET PRICES IN WESTERN EUROPE
1996 1998 2000 2002 2004 2006E 2008E 2010E
1.600
1.400
1.200
1.000
800
600
400
200
0
Price (US$/ton)
MGE Price Western Europe Market Price
PET bottle Western Europe Market Price
PET - Diversifi cation of fi nal consumption market
Juices and dairy products
Cleaning products Fresh andfrozen food
Drinks Pharmaceuticalindustry
Industrialapplications
DEMAND OF PET FROM WEST EUROPE PER SEGMENTS
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
4.500
4.000
3.500
3.000
2.500
2.000
1.500
1.000
Thousands of tonnes
Food Beverage Pharmaceutical Cosmetics Other PET
ForecastPET advantages
• Low density, light weight
• Ecological, recycling, resistant
• Less energy intensive to make and recycle
• Quality superior
• Easier to mould into a variety of shapes
• Personalised characteristics
Artenius Portugal
Has a plant in Portalegre (Portugal). This started with the manufacture
of polyester fi bre, later evolving to PET production. The installed
capacity of Artenius Portugal is 70,000 tons of PET a year.
Artenius Italia
With two production plants located in San Giorgio de Nogaro
(Italy), in 2006 it had a production capacity of 200,000 tons of
PET a year.
Artenius Hellas
Is the only producer of PET in Greece and the area of the Balkans. It
is located in a strategic area 15 Km. from the port of Volos (Greece),
which gives it access to Europe, the Balkans, the Middle East and
the Euro-Asian markets. The installed production capacity in 2006
amounted to 80,000 tons of PET a year. 50% of production is com-
mercialised outside the Greek frontiers and the remaining 50% is
aimed at the internal market, so 65% of demand is covered.
Artenius UK
Is located in Wilton and has 3 production plants: two for PTA and
one for PET. The installed PTA capacity amounts to 670,000 tons/
year and for PET it is 150,000 tons/year. The PTA production is
used to satisfy internal and external demand.
Artenius TurkPet
Has a PET production plant in Adana, with a PET production ca-
pacity of 130,000 tons/year, and a PET pre-form plant in Inegol,
with a production capacity of 50,000 tons/year.
Artenius Romania
In Bucharest, is the third largest production plant in the coun-
try, with a market share of 10%. Since December 2005, this fac-
tory has produced PET pre-forms and has a capacity to produce
10,000 tons a year.
Simpe Italia
Within the agreements reached with the Italian Montefi bre, on 21st
December 2006 LA SEDA DE BARCELONA purchased 19.1% of
Simpe S..p.A, engaged in the production and commercialisation of
polyester polymers and will soon be making the necessary indus-
trial investments to produce 150,000 tons/year of PET. To these
effects, a capital increase will be agreed, which will be subscribed
to entirely by LA SEDA DE BARCELONA, so that the company will
become the majority shareholder in the Italian entity in Acerra.
Artenius San Roque
In the fi rst quarter of 2007, LA SEDA DE BARCELONA reached an
agreement for the purchase of the Eastman plant in San Roque
(Cádiz), which will be brought into the Group from 2st May 2007.
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006E 2007E
PET POLYMERS CONSUMPTION
14.000
12.000
10.000
8.000
6.000
4.000
2.000
0
Thou
sand
Tns
/ ye
ar
2.8993.262
4.0064.800
6.0356.769
7.639
8.463
9.548
10.58411.291
12.146
13.064
791 864 1.097 1.2541.840
2.089 2.288 2.5002.986 3.173 3.309 3.535 3.817
European Consumption
World Consumption
MARKET SHARE IN WESTERN EUROPE (%)
M&G12%
Invista11%
LSB32%
Eastman14%
Equipolymers17%
Novapet9%
Others5%
74 75
INSTALLED CAPACITY OF PTA IN WEST EUROPE
Eastman y PCK Schwedt do not sell PTA, they use it only
for internal consumption
BP
Interquisa
LSB
Eastman
Equipolymers
PCK Schwedt
1.085
740
670
290
190
80
0 500 1000 1.500
Capacity 000s tonnes p/a (2006)
Important competitive advantage for internal supply of
MEG from IQA and PTA for ARTENIUS Wilton
PCK Schwedt3%
LSB22%
Interquisa24%
BP36%
Eastman9%
PTA MARKET SHARE IN WEST EUROPE
Equipolymers6%
In the last quarter of 2006, LA SEDA DE BARCELONA entered
the PTA business with the purchase of the Advansa plant in Wil-
ton, which with a capacity of 670,000 tons/year, makes the Com-
pany the third largest European producer with a market share of
22%. The plant with the largest capacity was submitted in the
fi rst quarter of 2006 to a revision that translated in the months
following into record monthly production fi gures and greater pro-
ductive effi ciency.
PTA is a fi ne white powder that is obtained by reaction in the air of
the substance called Paraxylene. This reaction produces a white
raw terephthalic acid powder that is purifi ed in water at high pres-
sure and temperature to give PTA.
PTA is used as a raw material in the production of polyester, and
particularly of PET polymers and fi bres.
Demand for PTA in Western Europe registered 3.3 million tons
and growth is expected of 5% a year until 2010, mainly due to
the strong growth in the demand for PET for containers. In 2006,
LA SEDA DE BARCELONA achieved strong positions in the sector,
by supplying PTA to the main PET producing companies and by
recently opening a new market in Lithuania.
In the period between 2007 and 2009, an increase in PTE produc-
tion capacity is expected in Asia, Mexico and the United States.
In the same period, in Western Europe there are no plans by other
competitors to build new plants.
The global PTA market has been very competitive this year and
the margins have been affected by the new production capaci-
ties in Asia and by the relative weakness of the dollar, which has
coerced PTA prices in Europe. European demand is well balan-
ced despite this.
PTA producers have been affected by the price of crude and gas
in 2006, which was higher than expected. This is also added to
by the fact that the price of Paraxylene was exposed to extreme
volatility in the year. This behaviour is explained to a certain ex-
tent by the increase in the demand for Xylene (a hydrocarbon
from paraxylene) from the petrol markets in the USA and also
due to the great demand for polyester in China and the rest of
the Asian continent.
The European PTA market is highly concentrated, as the
three main competitors account for a market share of 82 %.
The remaining producers are not active in the market as they
only produce PTA for their own consumption. LA SEDA DE
BARCELONA’s access to this raw material is therefore strategic
and fundamental for founding the future development of the
Group in the polyester sector.
PTA Division
DIAGRAM OF PTA PRODUCTIVE PROCESS
OIL
PARAXYLENE(PX)
OXYGEN(O2)
ETHYLENE
ETHYLENE OXIDE (EO)
H20
MEGPTA
POLYESTERRESIN
FIBRE PET
PREFORMS
CONTAINERS
Strategy: vertical integration of the production in order
to assure margins
76 77
The Chemical Division of LA SEDA DE BARCELONA was created
in 1995 with the purchase of IQA (Industrias Químicas Asociadas)
on the Tarragona petrochemical estate.
This plant produces Ethylene Oxide, Glycols, Polyoles, Ethoxylates
and PEG´s (Polyethylenglycol). Through IQA, LA SEDA DE
BARCELONA is the only producer of Ethylene Oxide in Spain, with
a production capacity of 125,000 tons a year, of which 50% is
consumed internally.
The Tarragona site includes a 6 MWh generation plant that
supplies electricity to the ethylene oxide plant
The customers of this division are producers of plastics, detergents,
antifreezes located on the Tarragona platform.
The main applications of the products made in the Chemical Division are the following:
CHEMICAL Division
The total volume of sales, by product lines, was distributed as
follows:
DIAGRAM OF THE CHEMICAL PRODUCTIVE PROCESS
OIL
PARAXYLENE(PX)
OXYGEN(O2)
ETHYLENE
ETHYLENE OXIDE (EO)
H20
MEGPTA
POLYESTERRESIN
FIBRE PET
PREFORMS
CONTAINERS
PRODUCT APPLICATIONS
Ethylene Oxide Detergents
Monoethyleneglycol Polyester Fibre / PET / Polyester Resins
Anti-freeze / Explosives
Diethyleneglycol Resins / Plasticizers
Polyethyleneglycols Silk screen liquids / Ceramic additives /
Pharmacy / Cosmetics
Polyols Polyurethane foams
The market of the Chemical Division is a stable, mature one with
very small variations. Despite this, the sales volume in tons increa-
sed by 9% with respect to last year, passing to 156,802 T. from
143,722 T. in 2005.
Furthermore, the turnover in this period reached 98.4 million
euros, as compared with 79.4 million euros in the previous year.
2006 VOLUME (Tons.)
Ethylene Oxide 48.915
Glycols 74.973
Peg’s 6.913
Polyols 13.805
Ethoxylates 12.196
Although the increase in the average price of the raw material
(ethylene) was approximately 120 €/T, the margins were able to
be kept at a good level. Following the habitual tendency, the lar-
gest percentage of sales went to the domestic market.
78 79
ARTENIUSHELLAS
ARTENIUSROMANIA
ARTENIUSTURKPET(Inegol)
ARTENIUSTURKPET(Adana)
ARTENIUSUK
*Incorporation into Seda Group May 2, 2007.
ARTENIUSPRAT
IQA-LSBARTENIUSPORTUGAL
*ARTENIUSSAN ROQUE
ARTENIUSITALIA
STRATEGIC GEOGRAPHICAL COVERAGE OF THE NEW GROUP
SIMPE
80 81
New Business Divisions
Biodiesel Project
In December 2006, LA SEDA DE BARCELONA and Bionor (held
by CIE Automotive) reached an agreement to create an alliance
to develop Biodiesel plants in different industrial locations of LA
SEDA DE BARCELONA. This alliance appears in the form of a new
company under the identity of Biocombustibles LA SEDA, which
starts its activity with a share capital of 3 million euros, held 60%
by LA SEDA DE BARCELONA and 40% by Bionor.
This business agreement is intended to benefi t from the different
production sites controlled by LA SEDA DE BARCELONA that meet
the ideal conditions for the development of this kind of activity.
For its part, Bionor brings in proven experience and management
capacity in the area of biofuels. The fi rst Bioseda project planned
is the introduction of a biodiesel plant in the IQA-LSB facilities in
Tarragona, with an estimated investment of 45 million euros. The
new company, Biocombustibles LA SEDA, was constituted on the
past 6th February 2007.
PET Recycling Project
In the past month of March, the Company reached an agreement
on the purchase of the PET recycling company Recuperaciones
de Plásticos Barcelona. The operation is for 2.6 million euros, of
which 60% goes to the company. The agreement also includes a
commitment by LA SEDA DE BARCELONA to subscribe the whole
of a capital increase of 1 million euros, to raise its participation
to 67.4%. The remaining 32.6% lies in the hands of Fernando
Casanova, the former owner, and the person who will still lead the
management as Managing Director.
RECUPERACIONES DE PLASTICOS BARCELONA (RPB) has a
PET plastic recovery plant in the town of Balaguer (Lleida), which
achieves a production capacity of 7,000 tons a year of recycled
PET. With a net business turnover last year of 2,3 million euros,
RPB has two production lines, the second of which came into
operation in the last quarter of last year. This is a recycling factory
that develops its own technology and employs 20 people.
With its entry in the PET recycling business and this purchase, LA
SEDA DE BARCELONA closes the production cycle of this plastic,
which is the company’s strategic product, as it is used as a raw
material for making polyester fi bre and for reuse in certain PET
applications. In this line, RPB’s short-term objective is to raise a
new recycling plant in the south of France, where the company
already has land to start to build. RPB has also started a study
phase for the construction of a third plant in the south of Italy.
This purchase means a further step in the policy of Corporate So-
cial Responsibility of LA SEDA DE BARCELONA, as it will initially
contribute 7,000 tons a year of recycled PET to the market.
Technology Division
In order to make use of the technology rights of the Group for PTA
and PET, LA SEDA DE BARCELONA has created a new business
division. The LA SEDA DE BARCELONA technology is based on
its large portfolio of patents, know how and the rights acquired
for licensing out the PTA and PET technology of Invista in Europe,
Middle East, Africa and Eastern Europe. This division also inclu-
des the Beyond World Class, which contributes to the business of
improvement and safety consultancy.
In 2006, very important agreements were reached within the fra-
mework of this new business, of which we highlight the following:
• Obtention of the rights to license out Invista PET and PTA
technology
• Licence agreement signed with CJSC Nizhnekamsk Refi nery
(Republic of Tatarstan, Russia), to supply PTA and PET technolo-
gy for new plants as part of their petrochemical complex
• Renewal of the licence agreement with Sans Fibres Limite (South
Africa) for the use of PET technology and trademarks for PET resin
bottles.
• Licence agreements signed for supplying technology in conver-
ting two plants to produce PET resin bottles, one in Italy and the
other in Russia.
• First important external continuous development Beyond World
Class contract with the English-Dutch steel company Coros, in the
Redcar plant in the United Kingdom.
Polyester fi bre is a chemical fi bre composed of a combination of
PTA and MEG, both materials derived from oil.
In recent years, the profi tability of the fi bres has fallen due to the
increasing competition in Asia. As a result of this market decelera-
tion in Europe, in June 2006 LA SEDA DE BARCELONA decided
to sell off INQUITEX, one of its fi bre production plants.
In October 2006, LA SEDA DE BARCELONA announced an agree-
ment with Montefi bre to combine their businesses and create a
joint venture.
LA SEDA DE BARCELONA has contributed its participation in Fi-
bracat Europa, a subsidiary that concentrated its fi bre activities in
El Prat de Llobregat.
For its part, Montefi bre has contributed its fi bre assets in Acerra
(Naples) to this business alliance that is expected to have a pro-
duction capacity of nearly 100,000 tons of fi bre in Europe.
Fibre Division
• Development of the MegaPTA project for a plant in Sines (Por-
tugal) with a capacity of 700M tons a year, backed by the aid and
subsidies of the Portuguese government.
82 83
Quality, safety and environment policy
The production plants of the LA SEDA DE BARCELONA Group,
through their Integrated Management Systems based on the refe-
rence standards ISO 9001, ISO 14001 and OSHAS 18001- pur-
sue a priority objective: to achieve effi ciency and effi cacy in the
production processes necessary for the optimal development of
the commercial and industrial activities.
LA SEDA DE BARCELONA applies prevention criteria at origin in
all its actions concerning respect for the environment and ensures
compliance with the legal requirements that may be demanded
at any time.
The Company understands that this effort would not be effective
without developing a personnel training policy aimed at knowledge
and sensitisation in the prevention of labour risks and respect for
the environment, in addition to the training that might functionally
be necessary in each case.
The corporate culture of LA SEDA DE BARCELONA is characte-
rised as being proactive and collaborative, and in this same line,
to achieve effi ciency in the business process, specifi c plans are
developed which also provide the necessary resources to achieve
results-focused management. In the whole of this process, the
company places special emphasis on the incorporation new te-
chnologies to facilitate access to information on all levels of the
organisation.
LA SEDA DE BARCELONA considers that profi tability in business
must also be based on the establishment of reliable, lasting rela-
tions with their spokespeople: employees, customers, suppliers,
social organisations, public administrations etc., this being a re-
ference criterion in defi ning the commercial, industrial and social
strategies of the Group.
The LA SEDA DE BARCELONA General Management, with the
entire support of the Management Team, periodically reviews the
evolution of the key management indicators, trying to identify the
strengths and weaknesses of the Company in order to propose
and prioritise the opportunities for improvement that are conside-
red most suitable for achieving the general objectives.
LA SEDA DE BARCELONA, as a quoted company,
is aimed at offering its shareholders maximum
returns while staking on becoming consolidated in
its current business and growing sustainably. The
culture of the mother company and its subsidiaries
involves making the necessary investments not
only to adapt production to market needs, but
also to adapt the teams and the facilities to the
good practices in Health and Labour Safety, and
in the policy of respect for the Environment
• Voluntary adhesion to the Progress Commitment Programme, re-
cognised internationally as Responsable Care, covering the whole
world and which is applied in 52 countries around the world and
which in Spain, is being managed and co-ordinated by the FEI-
QUE (Federación Empresarial de la Industria Química Española
– Business Federation of the Spanish Chemical Industry). The
objective of the Programme is to achieve continuous improve-
ment in areas such as Safety, Protection of Health and the Envi-
ronment according to the principles of Sustainable Development
CORPORATE SOCIALRESPONSIBILITY
• Member of the COASHIQ (Comisión Autónoma de Seguridad e
Higiene en la Industria Química – Autonomous Commission of
Safety and Hygiene in the Chemical Industry) to share experien-
ces with the companies associated with this Commission.
• Associate of AITEX, the Textile Technological Institute, a refe-
rence entity in the promotion of innovation and technological
development in the textile industry. This Institute guarantees the
absence of products that are harmful for consumers and the
Environment in the products made with their polyester fi bres.
• Member of PLASTVAL: A plastic recycling group.
• Member of APIP: Portuguese Association of the Plastic Industry.
Which is engaged in recycling.
• APEQ: Portuguese Association of Chemical Companies.
Relations with the International Chemical Community
84 85
With respect to the Environmental Policy, it must be said that the
emissions of volatile organic compounds (VOC) fell this year to
43% of the levels in 2004. The energy consumed per ton fell slig-
htly thanks to the improvements made in 2006. This plant lay
within the objectives of the Agreement on Climatic Change, the
impact of which was lower than in previous years due in general to
the tight objectives marked by the British government with effect
from 2006.
R&D&i
In 2006, the R&D+i department focused particularly on conti-
nuing the development of the necessary technology for the Me-
gaPTA project, which is based on the construction of a plant in the
petrochemical complex in Sines (Portugal). This project is subject
to negotiation and the support of the British and Portuguese au-
thorities.
This Project has started ideas to increase the competitiveness of
the Wilton PTA plants. These new contributions are being develo-
ped and will be correspondingly presented for approval.
The PTA Division also includes the activity of licensing DuPont/
Invista technology to others. This year, the Company was awarded
the tender of the Russian company CSJC Nizhnekamsk Refi nery
(NHR) to supply the necessary technology to raise a PET plant
and another for PTA in the petrochemical complex of Nizhneka-
msk (Tatarstan Republic).
Chemical Division
Policies of Quality, Safety, Health and Environment
Due to the particular features of the products and processes used,
IQA-LSB is subject to highly demanding regulations on industrial
safety, the prevention of serious accidents and the transport of
hazardous goods.
Certifi cations
In the development of its regular activity, Industrias Químicas Aso-
ciadas-LSB pays special attention to aspects related to Quality,
Safety and Environment. For its Quality Policy, IQA has opted for a
System of Management by processes focused on the key results of
the Company. To achieve its business objectives, comprehensive
training and the establishment of reliable and lasting relationships
with customers, suppliers, employees, social organisations, public
administrations, etc. is fundamental.
PET Division
The main business unit of the company, Artenius -PET Division-
follows the policy of Corporate Social responsibility marked by LA
SEDA DE BARCELONA. The fundamental value that guides the
safety, health and environmental policy of the PET Division if the
profi table management of the business without causing harm to
people, the facilities of the environment, as the effi cient mana-
gement of the risks inherent to the business help to create and
protect its value.
The risk management policy forms part of the business culture as
it is motivation for our personnel, and also creates value through
the identifi cation, evaluation and control of the risks to people,
trademarks, suppliers, customers, social agents and the impact of
our activities on the Environment.
The management effi ciency is refl ected in the British production
plant of LA SEDA DE BARCELONA in Wilton, which has received
the prestigious “Sword of Honour” award
R&D&i
The R&D+i Department of the PET Division was concentrated in
2006, on carrying out different developments in order to increase
the profi tability of the business. The following stand out among
these projects:
• A production reorganisation process that involves the homoge-
nisation of the formulae to achieve a basic polymer common to all
plants, with particular importance given to the commercialisation
of a “Fast Heat” polymer with improved properties while injecting
and blowing the bottles.
• Rationalisation of the product catalogues, enhancing the de-
velopment of new high value added polymers that improve the
average profi tability of the business.
• Technological optimisation of the production processes to achie-
ve greater effi ciency and operative stability.
PTA Division
In 2006, the PTA production activity was centred on the Wilton
plant (United Kingdom). The Quality, Safety, Health and Environ-
ment policies that are applied in this industrial plant scrupulously
follow the regulations of the country.
With regard to the Safety and Health levels, the Wilton production
plant is characterised by its low labour loss background. The last
work accident was in October 2002.
86 87
Recycling
In 2006, the LA SEDA DE BARCELONA Group made a determi-
ned effort to reuse all surplus materials and sub-products of the
group production processes. The company included recycled ma-
terials from post-industrial and post-consumption uses into the
composition formulae of some types of polyester fi bres.
World pact of the United Nations
LA SEDA DE BARCELONA is a member of the Group of Large
Companies adhered to the United Nations World Pact, an initiative
of ethical commitment for entities from all countries to take on
ten principles as an integral part of their strategy and operations
with regard to Human Rights, Work, Environment and Struggling
against corruption. (See: www.pactomundial.org).
LA SEDA DE BARCELONA, S.A.: active pre-sence in its relations with the community
Throughout the years, in all its subsidiaries LA SEDA DE BARCE-
LONA has consolidated excellent relations with the communities
in the areas most nearby their productive plants.
In the Tarragona petrochemical complex where the plant is lo-
cated of IQA-LSB (Industrias Químicas Asociadas LSB), the only
producer of Ethylene Oxide in Spain, the Group has an excellent
relationship with the nearest Tarragona community and also with
the associations of proprietors (La Granja, Camp Clar, Torreno-
va…). In this province, the Group also collaborates with collectives
in favour of the social and labour integration of the disabled (La
Muralla), the Elderly (Llar Avis SP iSP) and professional schools
(Colegio Ofi cial de Químicos de Catalunya). In the more sporting
area, LA SEDA DE BARCELONA collaborates with groups such as
Torreforta, Camp Clar Zona Esportiva,… and sponsors a cycling
team in the city.
In the fi eld of teaching and promoting access to labour life, the LA
SEDA DE BARCELONA Group collaborates through agreements
with the Universidad Rovira i Virgili in Tarragona (the Chemical
Faculty) to provide practice for students, and with Professional
Training schools, such as the IES Comte de Rius.
The community nearby LA SEDA DE BARCELONA in El Prat de
Llobregat (Barcelona), also benefi ts from the actions included in
the Company’s Programme of Relations with the community. In
fact in declarations to Dossier Econòmic, the mayor of El Prat de
Llobregat, the Rt. Hon. Mr. Luis Tejedor, recalls that LA SEDA DE
BARCELONA is the company that brought El Prat to industriali-
sation, and adds that it was this company that brought women into
the industrial workplace. Within this line of action, the Company is
also an active part of the project “Plans d´Igualitat de les Empre-
ses de la ciutat de Barcelona” led by Barcelona City Hall with the
aim of promoting policies to nurture equal opportunities between
sexes in company management, and non-discrimination.
In the same area of infl uence, marked geographically by the river
Llobregat, LA SEDA DE BARCELONA forms part of the Board of
Government of the Comunitat d’Usuaris d’Aigües del Delta del Riu
Llobregat and takes part in new development projects (R&D+i)
with the UPC (Chemical Department of Polymers of the ETSIIB).
Furthermore, the Company is a founding member of the IQS foun-
dation (Instituto Químico de Sarrià) and takes part in different im-
portant cultural and social events: it is a protector member of the
“Fundació Orfeó Català Palau de la Musica” and a sponsor of
numerous acts organised by the Down’s Syndrome Foundation.
The LA SEDA DE BARCELONA production plant in Wilton (UK)
is actively involved in its relations with the most nearby commu-
nity. The Company develops a large number of activities, among
which we would highlight the collaborations with the educational
community, the Tees Valley Community Foundation, and its parti-
cipation in the agenda of local events.
Other Businesses Division
The technical fi bres of the LA SEDA DE BARCELONA Group are
certifi ed by the AITEX Textile Technological Institute for the use
of the Oeko-Tex Standard 100 ecological label for polyester fi bre.
This certifi cation guarantees the non-presence of harmful subs-
tances in the consumer goods manufactured with those fi bres.
Special customer attention
LA SEDA DE BARCELONA has a specifi c service for customer
attention in all matters related to the environment and health
care requirements that affect its products and are required by
the markets.
Product guardianship:
Product guardianship: customer attention in matters related to environmental and sanitary requirements
Chemical Division
In the area of Product Guardianship, IQA follows the codes of
conduct established in the Progress Commitment Programme, in
which it is considered priority to involve the Management, training
and the relationship with the suppliers, distributors, customers
and other spokespeople of the organisation.
IQA-LSB also regularly holds open doors meetings to inform the
community where it is of the activity developed in its installations
and so compile possible concerns in this respect.
The short term objectives in the development of Product Guar-
dianship will particularly include the application of the new Euro-
pean policy on chemical products set out in the REACH Regula-
tion, recently approved by the European Parliament.
PET Division
All of the polymers of the LA SEDA DE BARCELONA Group fulfi l
European Directives and their transposition to the corresponding
Spanish Regulations concerning Productive, Environmental and
Health Care aspects, particularly those concerning products that
might be in contact with foodstuffs.
In addition to strictly legal compliance, the PET produced by LA
SEDA DE BARCELONA has been approved by companies of the
prestige of Coca-cola, Pepsi, Danone, Nestlé, amongst others.
88 89
PAYROLL EVOLUTION LSB GROUP
2003 2004 2005 2006
LSB 489 403 416 246
IQA 122 119 122 122
SLIR - 16 16 16
WILTON 340 331 326 319
ADANA INEGOL 142 135 183 188
BUCAREST - - 1 1
PORTALEGRE 57 56 51 52
SAN GIORGIO 137 139 134 126
VOLOS 101 101 100 99
LSB GROUP 1.388 1.300 1.349 1.169
STAFF AT 31-12-06
MANAGEMENT COMMITTEE 9
DIRECORS 18
MANAGERS 42
TECHNICIANS 190
ADMINISTRATION 86
MIDDLE MANAGEMENT 167
MAINTENANCE OPERATORS 145
MANUFACTURING & SERVICE OPERATORS 512
TOTAL 1.169
The above table (total payroll at 31st December 2006) refl ects the
situation of the structure of the Grupo SEDA, having carried out the
operation in the last quarter of the year. In other words, this table al-
ready contemplates the segregation of the Polyester Fibre business
and the purchases of Advansa, Artensa (Wilton, Adana, Inegol and
Bucharest), Selenis (Portalegre and St. Giorgio) and Volos.
Collective Covenants
In the El Prat and Tarragona production plants, and agreement
has been signed for 3 years (from 1st January 2006 to 31st De-
cember 2008) with a salary base of CPI plus 0.5%. The area of
application of this agreement is the Work Centre.
In 2006, in Adana (Turkey) an agreement was also signed in the
Work Centre for the coming 2 years (ending on 31st December
2007). This agreement includes an increase according to Turkish
infl ation, which is around 10% a year.
The Agreement for the British plant in Wilton, also applicable to
the Work Centre, will remain in force until 1st June 2007. The
labour agreements in this plant have been annual up to now, and
the one that is active is based on CPI plus 0.3%.
Except for the above cases, the remaining Production Centres in
LA SEDA DE BARCELONA do not have Collective Covenants for
their Work Centres, but are rather subordinated to state agree-
ments between the Employers and the Unions (St. Giorgio and
Volos) or state regulations (Portalegre).
Training
In general as established in the Chemical Industry, the training
commitment is high in all production plants in the LA SEDA DE
BARCELONA Group. In each operating centre, we highlight the
hours of training dedicated to Safety and Environment, which ac-
count for 70% of the total. The remaining 30% of the hours are for
different courses, and especially those dedicated to improvement
and innovations in the operating processes.
Human Resources
The year 2006 was characterised by the ambitious Purchasing
Programme carried out by LA SEDA DE BARCELONA. Since the
fi rst purchase made in the fi rst quarter of the year that we are
analysing, the Company has undertaken an effi cient reorgani-
sation of the whole of its operational structure, as happens in all
large corporations. For this reason, the Group is immersed in an
Integration Process not only on the organisational level, but also
on the cultural. The main objective of the Human Resource De-
partment of LA SEDA DE BARCELONA is to unify criteria, policies
and procedures, while respecting the legal and cultural particula-
rities of each country.
The integration of new subsidiaries and the operations centres un-
der the same corporate culture defi ned by LA SEDA DE BARCE-
LONA, will allow the company to project an internally unifi ed ima-
ge to markets, customers and suppliers. The company is proud
of the individual trajectory of each of the purchased companies,
although it understands that the dynamics of the market means
that it is necessary to complete the integration. It is a question
of culminating the industrial project by taking advantage of the
strengths (and minimising the weaknesses) that each of the com-
panies brings into LA SEDA DE BARCELONA, to face a market
now totally globalised.
This integration process also contemplates the corporate move-
ments made by the company in 2006. In this sense, the largest
reduction (117 people) occurred in the El Prat de Llobregat (Bar-
celona) plant, following the segregation of the fi bre business in
this production centre.
Overall, the remaining payroll has fallen by 59 people due to the
corresponding application of the current ERE, which is planned
to continue during 2007 and foreseeably until the fi rst quarter
of 2008. Finally, in the Wilton plant (United Kingdom) a minimal
adjustment was made of 29 people.
In the remaining centre, the payroll of professionals making up LA
SEDA DE BARCELONA remained stable in 2006.
