Companies in Asia Pacific generated sales of €8,664 million, which was slightly below the previous year’s level. Sales in local-currency terms increased by 4%.
As the global economic downturn progressed, the economy in the region decreased from the second quarter on. Beginning in the third quarter, this development intensified with the slowdown in the Chinese economy.
Sales increased in the Performance Products, Functional Solutions and Agricultural Solutions segments, in some businesses strongly. This positive development, however, was partially offset by the decline in sales in the Chemicals and Plastics segments.
Income from operations declined substantially by €574 million to €254 million. This is largely due to weaker results in the Chemicals, Plastics and Functional Solutions segments. Furthermore, our earnings were significantly impacted by special charges of €128 million. These comprised the restructuring of our coatings business, the shutdown of our butanediol/THF plant in Korea as well as impairments of our plants for styrene monomer in Korea, and butanediol in Malaysia. The Performance Products and Agricultural Solutions segments generated earnings growth.
Within the framework of our global excellence program NEXT, we started a project to increase the efficiency of our production sites. By the end of 2010, we expect improvements amounting to €80 million.
We still aim to achieve 70% of our sales in Asia from local production by 2015. For this purpose, we intend to expand our Verbund site in Nanjing, China, with our Chinese partner Sinopec. In addition, we plan to build a new MDI plant in the Chongqing municipality, in Western China, with a capacity of 400,000 metric tons of crude MDI per year.
We are also intensifying our research and development activities in Asia. For example, we opened a new development center for fuel cell technology in Yokkaichi, Japan; and in the field of plant biotechnology, we have signed a new cooperation and licensing agreement with the National Institute of Biological Sciences in China, and with the Academia Sinica, a leading research institute in Taiwan.
Particularly in China and in India, we strengthened our research and especially our development activities to react better and faster to new market impulses. We have further expanded Shanghai as our innovation center for China; development units for all of our segments are located there. We expanded our research site in Thane, India, through the construction of a laboratory for organic synthesis.