MUTTENZ, Switzerland - Clariant, a specialty chemicals company, has announced sales of CHF 1.894 billion in the second quarter of 2010, compared to CHF 1.609 billion in the previous year. Sales increased 18 percent in Swiss francs and 20 percent in local currency.

Volumes were up 20 percent over an extremely weak second quarter of 2009, but remained significantly below pre-crisis levels. On the back of a broad economic recovery, Clariant reported sales growth across all businesses and regions. The Pigments, Additives, Leather and Masterbatches business units benefited the most from the improved economic environment and grew above the group average.

Against the backdrop of the depreciation of the euro against the U.S. dollar and an increased competitiveness, demand in Europe developed better than expected compared to the low basis year on year, which resulted in a strong 22 percent sales growth for Clariant. Demand in Asia, Latin American and North America increased as well, favorably affecting the company's sales volumes.

Clariant significantly improved its gross margin to 28.9 percent from 24.8 percent year on year, based on good capacity utilization. Sequentially, the company increased sales prices by one percent in order to respond to a four percent uptake in raw material costs. However, these price increases have not been sufficient yet to fully compensate for the feedstock markup and will be intensified in the coming months, as raw material costs are predicted to further increase.

Although demand will remain solid in the remainder of the year, Clariant expects a weaker second half, as the global economy is expected to soften and the normal seasonality of its businesses returns in 2010.

Based on the good results in the first half of the year and the continuing restructuring efforts, Clariant aims for high single-digit sales growth in local currency and an EBIT margin before exceptionals of above eight percent for the full year. The cash flow from operations will remain strong.