SPENDING BILL ADVANCES - C&EN Global Enterprise (ACS

Mar 2, 2009 - BUDGET: Science agencies' funding rises in 2009 appropriations ... bill to continue funding the federal government through fiscal 2009...
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NEWS O F TH E W E E K

EUROPEAN EARNINGS TOUGH YEAR: Fourth quarter

sinks annual results

F

OR MANY of Europe’s chemical makers, 2008’s fourth quarter spoiled a year that was on course to set records. Now companies are looking at cuts in spending and jobs just to survive 2009. That’s what happened at BASF, whose annual results press conference was late last week. Sales were up

EUROPEAN RESULTS

Earnings mostly fall in 2008 for Europe’s chemical leaders SALES

EARNINGSa

($ MILLIONS)

AkzoNobel BASF Clariant DSM Solvay

$23,859 91,750 7,462 13,691 13,975

$1,093 4,288 -26 895 661

CHANGE FROM 2007 SALES

6.2% 7.5 -5.4 6.2 -0.9

EARNINGS

-13.6% -28.4 nm 9.0 -45.8

PROFIT MARGINb 2008

2007

4.6% 4.7 def 6.5 4.7

5.6% 7.0 1.3 6.4 8.7

NOTE: Monetary figures were calculated at average 2008 exchange rate of $1.00 U.S. = 0.7184 euros, 1.0816 Swiss francs. a After-tax earnings from continuing operations, excluding significant extraordinary and nonrecurring items. b After-tax earnings as a percentage of sales. def = deficit. nm = not meaningful.

SPENDING BILL ADVANCES BUDGET: Science agencies’ funding

rises in 2009 appropriations

T

HE HOUSE has cleared a $410 billion omnibus appropriations bill to continue funding the federal government through fiscal 2009. In line with the Obama Administration’s focus on energy and R&D FUNDING science, the bill includes inOminbus bill swells budgets for creased funds for R&D. The key science agencies Senate is expected to take up the bill quickly, as Congress CHANGE $ MILLIONS 2008 2009a 2008–09 must pass it by March 6, NIH $29,362 $30,300 3.2% when current government DOE 24,500 27,000 10.2 funding runs out. Office of Science 4,045 4,800 18.7 Last year, Congress and NASA 17,415 17,800 2.2 President George W. Bush NSF 6,137 6,500 5.9 were unable to reach agreeNOAA 3,931 4,400 11.9 NIST 756 819 8.3 ment on appropriations for most government agencies, NOTE: Fiscal years. The 2009 Department of Defense budget, which includes R&D funding, has already been except for the Departments approved. DOE = Department of Energy. a Amounts given of Defense, Veterans Affairs, in House omnibus bill; does not include funds appropriated in the stimulus package for 2009. and Homeland Security. SOURCE: House Appropriations Committee Instead, Congress passed W W W.C EN - O NL I NE .ORG

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almost 8% for the year because of higher prices in all divisions, Chairman Jürgen Hambrecht said. Operating income “was on course for a new record up to the fourth quarter,” he said, but results in all the company’s chemical divisions tumbled in the last three months. At Clariant, mounting restructuring charges contributed to a loss for all of 2008. CEO Hariolf Kottmann warned that Clariant intends to cut 1,000 jobs this year and make no dividend payment. The focus for 2009 will be on cash generation: “Loans are either not available or not affordable in the current financial crisis,” he said. For Solvay, 2008 results showed a marginal decrease in sales and a 46% drop in net earnings. Most of that drop came from investment losses of about $384 million. Solvay will slash its 2009 capital expenditure budget, spending only on health, safety, and the environment, or on “a very limited number of strategic projects.” On the other hand, the company said it would increase R&D spending almost 5% to $755 million in 2009. Roughly three-quarters of that is for Solvay’s pharmaceutical business. In contrast, DSM enjoyed a “record year” in 2008, with rises both in earnings and sales. Still, the poor economy is taking its toll on much of DSM, Chairman Feike Sijbesma said. The company, he added, has “swiftly taken the necessary steps to reduce costs in the affected businesses.”—PATRICIA SHORT

legislation last September continuing federal funding at 2008 levels for five months, forcing the new Administration to address the 2009 budget. Overall, the House-approved bill provides an 8% increase over last year’s funding level. Democrats and a smattering of Republicans backed the bill, but Republican House leaders objected to the price tag and urged that government funds be frozen at last year’s level. The bill boosts the budgets of key science agencies. For example, the Department of Energy’s Office of Science will see its 2009 funding grow by $755 million to $4.8 billion. This includes $765 million, $268 million above the 2008 level, for “advanced energy research,” such as batteries and fusion energy. To support climate, ocean, and weather research, NOAA will get $4.4 billion, up $469 million. NASA also will get a boost of $385 million to $17.8 billion for climate-change research, space exploration, and other activities. NSF and NIH will see increases of $363 million and $938 million, respectively, to support more research. Funding for NIST will also grow by $63 million to $819 million. The bill does not include funds from the $787 billion stimulus package. The House Appropriations Committee did not provide details about how the two packages will be merged, saying only that the bill “works in harmony with the economic recovery package.”—JEFF JOHNSON AND SUSAN MORRISSEY

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