2009 - a Year of Learning

President Bertel Karlstedt´s review of the year 2009 is found in the new Annual Report.

Bertel Karlstedt

The year 2009 gave us a magnificent opportunity to learn new things and take in new realities about business life and the company's readiness to meet a changed market and demand. With the results we achieved, we can now state that Nordkalk coped well and is today well equipped to face the continuing challenges of 2010.

From the marketing point of view, 2009 was an instructive but difficult year. The company's net sales fell heavily to the 2005 level. Most customer segments, products and market areas showed a similar trend, but there were also positive exceptions, e.g. the sales of products for soil improvement, stabilization and environmental care. The heavy downfall had already started in November 2008, and not until the second half of 2009 could we discern a slight positive trend in some customer segments. Nordkalk has compensated for the falling net sales with adjusting capacity and resources to the prevailing market situation. The company resorted to adjusting and cost reducing measures in all countries, taking national laws, regulations and collective agreements into account. Thanks to their flexibility and positive attitude, the personnel contributed to last year's result in an exemplary way, making it possible for Nordkalk to meet the expectations of our owners and financiers.

Even in these difficult times, Nordkalk has managed to continue building its future by means of investments in research and development. The company's largest investment of all times, a new crushing plant in Miedzianka, was commissioned in Poland in the summer, and a new lime kiln was officially inaugurated in Verdal, Norway. Both of these are investments in future growth through new and environmental friendly technologies. Throughout 2009, Nordkalk continued to work on utilizing alternative fuels, improving process effectiveness and developing new product applications.

Nordkalk has continued its systematic efforts to promote health and safety at work. Our long-term work for "Zero Tolerance for Accidents" has received national recognition and visibility in Finland. The subsidiary Suomen Karbonaatti Oy achieved 1,500 days with zero accidents in 2009, and thus had the honor of being categorized as "world class" in occupational safety. In the meantime, the lime factory in Lappeenranta reached an even better milestone; 2,000 days with zero accidents. We will continue to focus on zero accidents, and the aims of this process are consistent and comprehensive. The year 2009 also was a year of learning in health and safety issues. In an international organization, not everybody works in the same manner, and the year demonstrated that there still is scope for improvement in our resources, leadership and management. Our new and unified management system will contribute.

The year 2009 was a positive one as regards important legal processes at Nordkalk. In the spring, we received final confirmation of emission allowances granted to the joint venture NorFraKalk AS in Norway. Norwegian legislation threatened to leave the kiln without an allowance for the 2008-2012 period. A strong reaction from the owners supported by the EU lead to the desired result in this issue. In this respect, the company's new kiln can now compete at the market on equal terms with other producers. The company signed a multi-year contract with Omya on deliveries to Moerdijk, Holland. The permission process to open a new limestone quarry in Bunge, Gotland, Sweden also developed in a very positive way during the year. The Environmental Court ruling in December 2008, which rejected Nordkalk's appeal, was reversed by the High Court of Justice for Environment in October 2009. Even though this ruling has been appealed to the Supreme Court of Sweden, it can, however, be seen as a major victory for Nordkalk's ambitions in this issue. The lesson learnt from this is that environmental issues and permit processes are becoming more and more central and challenging in our branch. During the year, Nordkalk has actively followed the preparation of the new mining act in Finland and contributed to it through organizations of the sector.

Last year also brought along a big change in Nordkalk's ownership structure. The structure was simplified, and the Rettig Group was clearly established as the major owner. From the company's point of view, this was a positive development, and the long-term ownership structure will strengthen our image as a stable and reliable company.

With a long-term owner and skilled personnel, Nordkalk looks ahead with confidence. The year 2010 is also going to be challenging. The difference is that we can now meet the challenges with the experiences and lessons that we learned last year.

Nordkalk is proud of our result in 2009. There is every chance that year 2010 will be better!

Bertel Karlstedt

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