According to a recent statement from the company, raw material prices leveled off temporarily during the spring; however, quoted prices for supplies for the summer period are back to higher levels. The rise in raw material prices, the delay in transferring these increases over to sales prices and price reductions based on contracts reduced the value-added margin by some €2 million. Energy and payroll costs increased by some €1.5 million compared to the first six months of 2007. The company's cost-saving program has generated approximately €2.5 million since the previous year.
During the period under review, net sales of the Wipes and Nonwovens business area totaled €72.0 million, an increase of 8% on the corresponding period in 2007. The business area’s operating profit totaled € 0.2 million, up from €-0.1 during the year-earlier quarter.
Net sales of Wet Wipes totaled €35.9 million, an increase of 7% on the previous year. Delivery volumes grew and strong growth was seen in personal care wipes in particular. Average sales prices fell as expected, mainly due to long-term contracts. Development in sales to new customers and sales of Suominen's own product applications was slow. The revision of production recipes launched in the business unit at the beginning of the second quarter enabled a shift to less expensive raw materials for some products, which has slightly improved the margins for sales. The stock of finished products was increased for the summer period. The positive development of operational efficiency and cost-saving measures continued, the impact on performance being mainly attributable to cost-savings. The demand structure for products did not allow any increase in the use of automatic lines in production, and yield increased slower than expected.
Net sales of Nonwovens increased by 13% to €41.7 million. Deliveries of thermal bonded material for hygiene products increased. In hydroentangled nonwovens, the focus of sales shifted to Europe. There was an increase in internal deliveries. The second quarter brought some increases in sales prices.