HR report 2004

1
Contents
3 CEO Lennart Holm and HR Director Martin Lundin
4 HR events in 2004
6 Key figures
7 Employees
8 Improved recruitment, Quickly into the job, PMD process
9 People Satisfaction
10 The Miró Project, HR+
11 Skills
12 Constant development, Functional training
13 English in Korea, Mentor Scheme, Project Methods in R&D
15 Communication
16 Communication for achieving goals
17 Honesty in change processes
18 Perstorp in the community
19 School and community projects
20 Perstorp and SOS Children’s Villages, In the wake of a natural disaster,
We want to be good neighbors
21 Working environment/Health
22 What is health?, Keep fit, Corporate healthcare
23 Sickness absence, Safety

Employees Skills Communication Perstorp in Working

the community environment/
Health

7 11 15 18 21
Photo: Rikard Hansson, Jenny Hargne, Lars-Olof Henriksson etc.

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 The Perstorp Group has seen exciting changes
"A dynamic, in recent years. In just a few years, despite tough
global competition, we have succeeded in chang-
very profitable ing our company from a relatively traditional
player into a dynamic, highly profitable business
business filled filled with belief in the future. We have focused
the business on specialty chemicals with en-
with belief in vironmentally adapted applications as something
of a specialist area, we have more new products

the future" than ever before, we have established business

with new customers on new markets in new
countries throughout the world, we are building
new factories and our employees are showing increased confidence and initiative.
Our corporate culture, based on common values and practices developed in recent Lennart Holm,
years, is a major factor behind our success. Perstorp is currently characterized by an internal President and CEO
culture that encourages openness, cooperation, personal initiative and action. Our business
is based on knowledge and skill, combined with courage and ambition to work towards
common goals in a constantly changing world. Our development has required hard, purposeful and systematic work.
We are far from perfect and there is unlimited potential for further development.
My hope is that our 2004 HR report will provide insight into the work we have done during the year and a glimpse
of where we are heading.

An average-sized high school – that’s roughly

how many employees Perstorp has worldwide. "A common
Spread over four continents, with production
or sales companies in many countries, there is
every reason to fear divided operations under
corporate culture
the Perstorp brand. Having said that, we are
possibly more homogenous than many other
that sets clear
companies in our class. Why?
Our joint products, processes and policies
boundaries"
naturally play a major role. But it’s ultimately
a question of our employees’ will to work across boundaries, with customer benefits and
profitability as top priorities.
This is based on a value-steered leadership that understands the importance of com-
munication and the benefit of a common corporate culture that sets clear boundaries and
Martin Lundin,
encourages everyone to perform to their best ability. HR director
This is not to say that everything is always done correctly. We still have areas where
there is much room for improvement. For example, we can still improve at giving each
other honest, open feedback, or working more actively towards coaching and developing
our direct reporting in the long term. But at least we know what we need to do better. And our year-by-year reports
show that we are improving. Our philosophy in this context is not to strive for perfection. Our aim is more realistic:
to constantly perform better than the companies we compare ourselves with in each area.
The purpose of this second HR report is to inform of our operations both externally and internally, to compare
our performance with previous years and to present our future goals. This transparency places positive pressure on
us all to succeed. We will do our best.

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 HR events in 2004

January 2004

The Perstorp Health Club opened in India

The Perstorp Health Club opened in mid-January at the plant at Vapi, India. This initiative is
aimed at improving employees’ group spirit and physical and mental health.
March 2004
Healthier Coatings employees at Perstorp
2.7% sick leave in 2003, compared to 4.1% in 2002 – this was the comparative figure for
employees at the Group’s former business area Perstorp Coating Intermediates. The study
also showed that many employees have good long-term health.
A master of skills development
Perstorp’s HR Director Martin Lundin received the Swedish Competence Award for
Human Resources Directors at the 2004 Competence Gala (Kompetensgalan 2004) for his
enthusiastic, structured efforts to unite personal and business development. He won the
award over his opposite numbers at Ericsson and Astra Zeneca.
Perstorp makes 160 employees redundant
The news came at the end of March that 160 employees within the Group’s chemicals
operations would be made redundant. The redundancies will mainly affect the Swedish
units.
May 2004
Perstorp’s human resources report
In May, the Perstorp Group published its first Human Resources (HR) report for external
interested parties.
June 2004
The new organization will come into force today
This was the Group’s headline on its intranet on 1 June, the day Perstorp’s new function-
oriented organization came into force. This marked the completion of the project to
introduce the new organization.
August 2004
Perstorp in India contributes to better grades
The nine children in house no. 11 in the Balgram SOS
Children’s Village in Pune, India completed their exams
with good grades, largely thanks to ongoing support
provided by Perstorp Aegis Chemicals to the Children’s
Village. This support enables the children to receive
food, health care and school education.
Mentor program and personal development
in Perstorp
Interpersonal exchange is the most effective way to
development. For this reason, Perstorp invited interested
employees to participate in a mentor program in August
to increase involvement, motivation and personal
development for mentors and trainees.
Perstorp and the UN in unique documentary film
partnership
After the Group’s CEO attended a UN meeting in
New York, Perstorp was invited to participate in a unique
documentary film partnership with the UN. Perstorp is
one of 16 companies from around the world taking part
in a film that reflects how companies work with the
UN Global Compact initiative.

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September 2004
New website up and running
Perstorp’s new website was launched in September
as a first step in a conscious digital investment as an
active communication channel for customers as well
as for future employees and other interested parties.
Second accident-free year at Vapi
The 730th accident-free day passed safely on
12 September at Perstorp’s plant in Vapi, India.
A concerted effort from both employees, corporate
management and contractors made this possible.
We now aim for more accident-free days and a
renewal of the area EHSQ (Environment, Health,
Safety & Quality).
October 2004
Self-registering system
All the time clocks were removed from the plant at
Perstorp in October. Now employees at our Swedish
units register using the web-based HR system.
November 2004
More certified leaders in the Group
The fourth group of certified leaders received their diplomas in November at a formal
ceremony at Perstorp. This increased the number of certified leaders by 22 people, who
have gained advanced skills in areas such as communication, group development and
personal development.
Perstorp S.p.A. – 16 injury-free months
In November, we congratulated one of the Group’s Italian plants for 16 months without
any work-related injuries leading to sick leave. The recipe for success was cooperation and
pronounced safety-consciousness.
December 2004
SEK 3 million to Chinese Children’s Village
Perstorp initiated a partnership with SOS Children’s Villages in December to sponsor one
of the organization's Children’s Villages over the next three years in the Chinese province
of Nanchang. Humanitarian sponsorship in accordance with the Group’s Code of Conduct,
combined with the fact that China is a key market for Perstorp worldwide, made it a
natural choice to focus on local social development. This investment in China is expected
to provide an excellent return on every krona invested.
Study English through interactive training
In December, Perstorp’s employees were given the opportunity to study English through
Englishtown, an interactive internet-based training scheme. Several employees joined the
scheme, which is being implemented in 2005.
SEK 100,000 to the Red Cross
The Tsunami disaster in South East Asia caused the death of almost 300,000 and left
behind it devastation and poverty. Many organizations collected donations for the disaster
fund to provide long-term aid. Perstorp donated SEK 100,000 to the Red Cross Tsunami
relief fund.
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Key figures 2004
Average number of employees
Financial development
2004 2003
The year was characterized by continued positive economic conditions, Country Total number of whom Total number of whom
resulting in favorable demand for most of the Group's products. of employees men of employees men
Sweden
Net sales increased by 14% to SEK 6,532 m (5,741 m). Adjusted for Parent company 5 5 5 5
exchange-rate changes, the increase was 18%. Subsidiary 1,060 767 1,128 820
Belgium 207 185 212 189
Operating earning before depreciation increased to SEK 1,101 m France 7 5 11 6
(922 m), as a result of higher volumes, better capacity utilization and India 232 225 241 233
an increase in internal efficiency. Accordingly, the operating margin Italy 92 80 99 87
Japan 2 1 2 1
improved, despite the negative effects of rising raw-material prices and Netherlands 1 1 2 2
a weaker US dollar, and despite non-recurring costs of SEK 74 m. Singapore 4 2 4 2
UK 5 3 8 6
Net profit increased to SEK 71 m (39 m). South Korea 28 25 15 14
Germany 138 123 145 128
Cash flow from continuing operations was the same level as in the USA 310 271 312 275
preceding year at SEK 755 m (754 m). Total 2,091 1,693 2,184 1,768

Women who are members of company boards or management Sickness absence, 2004

2004 2003 Total sickness absence as a percentage of ordinary working time,%

Total of whom women % Total of whom women % The Group Swedish operations
Board members 133 2 2 160 5 3 2004 2003
Other senior executives 114 18 16 159 14 9 Total 2.2 3.4 3.9
Uninterrupted sickness absence
of 60 days or more *) 2.1 -
The Board members category comprises ordinary members of the boards of all companies within the Group.
The same person may be counted several times if he or she is a member of the board of more than one com-
pany. By gender
Men *) 3.2 -
The Other senior executives category comprises the Group’s executive management team, management teams Women *) 3.9 -
within each business sector, the management teams of major subsidiaries and the president of all other
companies within the Group. By age
29 years or younger *) 1.8 -
Between 30 and 49 years *) 2.8 -
50 years or older *) 5.5 -

*) There are no confirmed figures for foreign units pertaining to the distribution
among long-term and short-term sickness absence, sickness absence by gender
and the age distribution.
Swedish operations includes all Group companies in Sweden. Since the Parent
Leadership development Company has only four employees, it is not reported separately.

Forward program, 2004 Basic education,% of all employees

Module 1: Performance Culture Module 2: Strategy Module 3: Superior Value Creation & Growth 2004 2003

Time Program Location Sweden Other Total Total Compulsory school 18 19

country 2003 Upper secondary school 56 56
College/University 26 25
April Forward 3, module 3 Japan 12 11 23
May Forward 4, module 3 Japan 14 7 21
June Forward Fast PMT Japan 9 9

Total 35 18 53 87

Diploma leadership program Total LTAR fell in 2004

Time Program Location Sweden Other Total Total
country 2003 2004 2003 2002
Sept Group 3 and 4 Sweden 23 23 9.0 17.2 15.4
Nov Group 2, boarding Spain 2 8 10
Total LTAR = Lost Time Accident Rate (number of LTAs per million working hours).
Total 25 8 33 30

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Feedback develops
cooperation and team spirit

Employees
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Values
Perstorp’s outlook can be described with one word,
FORWARD, which is divided into three areas:
Our direction and driving force
Our attitude and motivation
Our actions
The company’s values are linked to FORWARD:
Earn the right to invest and grow
Decentralized leadership and initiative powers
Good insight into goals and results
Active cooperation and good cross-boundary
team spirit
Transparent feedback
Consideration and support for one another
Lead the process for change
*) The six different stages of the PMD process
Annual evaluation – talks at the start of the year aimed at evaluating the previous year and setting targets for the forthcoming year.
Staff and leadership evaluations – attitude evaluations, People Satisfaction (see next page), to promote improvement and growth.
Six-monthly evaluation – talks in late June with the main aim of formulating individual development plans for all employees.
Personnel planning – starting with the company strategy and using the development plans to evaluate future needs.
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We compete in a world where change is ever faster and has become
part of our everyday lives. This makes it extremely important to employ
people with the right skills and the right attitude, and to give them good
opportunity for development. This promotes the company’s growth
and increases our competitive strength. When working with our em-
ployees, we believe in a systematic, long-term approach that encourages
participation. Our global processes such as PMD (People Management
and Development *) are important. Over the past year, we focused on
spreading our global HR processes to many units throughout the world.
Starting from 2004, all wholly owned units will work according to PMD.
Our major employee study, People Satisfaction, was conducted with the
same questions as in 2002. The result was gratifying, showing a positive
change in all areas.
After three years in use and numerous training efforts, the PMD process
is constantly improving. Goal and development sessions with employees
improve clarity in both the short and long term and long term and en-
courage increased participation. Since 2004, most of the documentation
is entered in HR+, the Group’s personal administration tool, where both
manager and employee can use it. Because the documentation for the
employees’ skills development needs is collected in a single system, it
is easier to get a comprehensive picture of overall needs. This enables
more strategic development work.
Improved recruitment
Perstorp constantly works to improve and adapt the recruitment process.
This work is based on constant evaluation of our recruiting procedures.
Company policy states that all appointments should be advertised intern-
ally. In 2004 a change occurred in the digital advertising procedures for the
Swedish units with the introduction of HR+, our new tool for personnel
administration (See page 10). The internal positions are now available
on each individual’s page in HR+, which greatly simplifies searches. The
Group’s website, www.perstorp.com and other external search methods
have been used since 2004 for external recruitment.
Our strategy regarding skills profiles for external recruiting is based on
our values. Initiative powers, a desire to take responsibility and an ability
to share and listen are some of the qualities that we value highly. We want
employees who seek solutions to problems, ideally through a creative
approach, who help and respect each other, and who show honesty and
transparency, thus contributing to the company’s growth.
Quickly into the job
Perstorp sees introduction as an ongoing process that lasts for the first six
months starting right from day one. The
introduction process is aimed at helping
new employees achieve optimum work
results in the shortest possible time.
This process provides a structured
introduction that gives new employees
a positive attitude towards the com-
pany. The introduction also offers
other benefits. New employees can
use their experience to provide new
perspectives on how we can develop
and improve.

People Satisfaction
The Perstorp Group performs an at-
titude survey every two years called
People Satisfaction for employees
worldwide. The survey was carried out
throughout the Group with a response
frequency of 58%.

The survey has three aims:
- to listen to employees’ views on their
work situation
- to gain a basis for internal improvement
measures
- to provide a tool for measuring improvements
The survey consisted of two parts:
the company’s values and its working
environment. The results showed that
“Leading change” and “Decentralized
Employees’ opinions on working environment issues
Strengths
- we are good at performing PMD talks
- we give our colleagues support when they have
problems at work
- our working goals are clear and straightforward
- we decide ourselves how to organize and
perform our work
Weaknesses
- decision-making channels are perceived as
unclear
- cooperation between departments can be
improved
- not everyone is perceived as getting the same
opportunities
- difficult to get enough information about what’s
happening in own business area

leadership” were appreciated most,

while “Candid and direct feedback”
gained the worst result.
The most worrying aspect was a
low response frequency, although this
may have been because the survey was
conducted during a major restructur-
The result was reported by department and work continued by setting up improvement groups.
These groups have used the results to discuss a number of improvement measures that they will propose
to their managers.
Examples of proposals from improvement groups:
Everyone should be trained in giving and receiving feedback. Internal or external trainers may be
invited to teach the most basic skills in giving and receiving feedback.

ing process. The survey was conducted
intensively for a short period using the
same procedure for everyone. This
method requires a lot of resources and
is cumbersome to perform in some
respects. The evaluation suggests that
the methods for conducting the survey
should be changed.
When new employees join the company, they should be allocated time for getting to know their
colleagues and duties.
Introduction of regular departmental meetings.
The budget should be presented at the departmental meetings.
What do employees think of this kind of survey?
- It’s too comprehensive.
- It’s good to get a chance to express one’s opinion.
- Employees get the opportunity to express their opinions anonymously.

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 The Miró Project HR+
Our chemicals activities in Sweden were thoroughly re- A new personnel administration tool was implemented in
structured in 2004 under the Miró project. 2004 called HR+. Meanwhile, a change was made in the sys-
The project aimed to improve the company’s internal tem for clocking on and off at Swedish units. The traditional
efficiency and customer focus and cut fixed costs. The time clock was replaced by a new system where employees
basic concept for the new organization was that it should individually report any deviation from their normal work-
be function-based, with clear roles and responsibilities and ing hours. Employees and managers were trained in the
short, fast decision routes. This is in line with improving new reporting system during the year. Employees now also
the weaknesses shown in the People Satisfaction survey have access to their own data in the employees’ system,
(see page 9). for instance their address, compensatory leave and holiday
The new organization came into force on 1 June entitlement, wages and courses attended during their time
2004. at the company. Employees can update their address and
next of kin at any time. Employees can also log in and
Project Miró in brief update their CV and apply for internal courses.
The marketing organisation was concentrated at The aim is to have as much up-to-date information as
Perstorp, Sweden. possible on employees available for the employee and
The Supply Chain function was formed. their managers. This improves visibility and better internal
Administrative functions were concentrated at communication, thus enabling better use to be made of the
Perstorp, Sweden. organization's skills and expertise.
A cut in the number of legal units.
A reduction of 151 full-time employees.

Marketing & Sales Coating Intermediates The future

Marketing & Sales Performance Chemicals
Specialty Perstorp aims to offer all employees the same opportunities for professional
Perstorp Chemicals
Renewal & Development
Supply Chain development. Diversity efforts will be conducted continually throughout
Operations
the Group. One example is the planned new leadership scheme, which is
HR & largely about shaping attitudes.
Communi-
cations The company, together with HR and the various business areas, took
a decision to change the People Satisfaction survey. In 2006, the survey
Finance & IT
Materials will be carried out continually over a whole financial year, and will primarily
Technology
consist of questions adapted locally for each unit as a base, supplemented
with some common questions for everyone.

Engineering Materials

10
 Skills

Responsibility
generates
initiative and
ability to change
11
 A strategic skills-improvement plan is a key
factor in ensuring the company’s success in
a rapidly changing world. It’s not enough to
know what we can achieve today – we must
also ensure that we develop at a pace that
makes us competitive in the future too. Each
employee’s development opportunities and
willingness to change is of significant import-
ance. We need to maintain and develop a
working environment that prioritizes these
factors. Meanwhile, skills should not just be
seen from an individual perspective. When the
organization's and unit’s collective skills are
integrated in the optimum way, the final result
can be better than the sum of its parts.

Constant development Functional training

It is vital for all of us to adopt a wider view of skills de-
velopment that includes more than just traditional training
methods. Most opportunities to learn from each other oc-
cur in everyday life, in situations such as work rotation,
trainee work, project participation or study visits. Working
on development plans in a structured way allows us to
make the most of these opportunities.
The Life and Career Scheme and the Mentor Scheme
are other important initiatives to promote employee de-
velopment with focus on the future. The Mentor Scheme
was reintroduced in 2004 after being dormant for a few
years.
Constant leadership development is a high-priority
process, and the Group runs a certified leader scheme
to ensure a stable platform. Ongoing evaluation of our
managers’ development is followed up through regular
leadership surveys.
All production units in the Group constantly perform train-
ing based on the organization's and individual’s needs.
The training focuses on learning new things, and also on
re-evaluating or consolidating skills you already have. Pri-
oritized training areas during the year included working
environment, risk management and safety. This training
is necessary to help us perform our duties correctly and
safely, both for ourselves and for those around us.
Besides the prioritized areas, training has also been con-
ducted in areas such as communication, project skills and
product knowledge. The collective picture of employees’
individual development plans provides a good overview
of the need for general training that can be coordinated in
individual units or between units.

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English in Korea
It is impossible to grade the importance of different forms
of training. It is always necessary to start from the organ-
ization's and individual’s specific needs. What is absolutely
necessary in certain circumstances may be less of a priority
in others.
When the Hansol-Perstorp joint venture was initiated
in Korea in 2003, it was absolutely vital for the sake of
communication to invest in English language courses. Of
the organization's 30 employees at the Seoul office and the
Ulsan production facility, about a third – mainly from Seoul
– have participated in various intensive English courses.
The aim is to progress from a patchy, limited knowledge
of English to good communicative skills in primarily spo-
ken but also written English. The training is carried out
in collaboration with universities and consultants on site.
Initially, only traditional training methods were used, but
the initiative was recently supplemented with personal
coaching in Ulsan. The results of this training initiative are
already evident in the form of improved business develop-
ment opportunities and increased cultural understanding
and dialogue.
The plan for the future is to prioritize continued English
training with the aim of involving more employees in the
scheme.
Mentor Scheme
The internal mentor scheme was re-introduced in 2004 to
promote employee development. The scheme employs a
new methodology, and priority is given to working meth-
ods and business methods. Eleven mentors and an equal
number of trainees started the program after the summer,
with completion scheduled for summer 2005. The aim was
to achieve maximum development of mentors and trainees.
For this reason, the initiative started by training the mentors
in the new method. The purpose of the mentor scheme is to
increase employee involvement through improved visibility
and training in how to make the optimum contribution to
the business and its development with the help of other
contacts than those in the line organization. The scheme
focuses on the trainees’ relationship to the company, col-
leagues and themselves. This makes the mentor scheme
an important complement to the Life and Career scheme,
which concentrates more the individuals’ overall everyday
life including work, family, free time and the individuals
themselves.
These two programs use similar conversation methods
but have different aims and objectives.
Project Methods in R&D
Renewal & Development (R&D) aims to find the optimum
processes and product development opportunities for the
13
company to promote growth. A consistent project culture
throughout the organization is a vital prerequisite for a
successful and productive R&D project.
Project management includes the creation of a team,
a flexible group of people with different skills working
towards common goals.
A uniform working method for projects was prioritized
in 2004, and all employees have received training in project
management. All employees are involved in projects, and
the aim of the training was to provide tools for implemen-
ting projects and give all employees in R&D a common pro-
ject culture and values to allow a uniform working method.
Each employee’s motivation is increased by projects and
taking responsibility for the various tasks involved.
Common project methodology to
increase efficiency and motivation through uniform
working routines based on our values.
The training was well received by the R&D organiza-
tion, where the general view was that a joint base via
PRIMA, R&D’s project management guide, is vital in order
for everyone to understand the same language and work
towards the same goals within the projects. Immediately
visible results of the training include increased employee
14
motivation and clearer and more target-oriented project
goals, leading to increased project completion.
R&D’s project organization will continue to be developed
through ongoing training both in project management and
for individual project roles. The plan for 2005 is continued
project management training, mainly for new employees,
follow-up training for employees with basis skills and active
coaching of project managers and members.
The future
Efforts to develop leadership and employees will continue in many areas,
including skills development. A skills analysis project started in 2004 with
the aim of developing units and organizations through strategic focus on
expertise areas. The PMD process will continue to play an important role
in our continued skills development efforts, and its content is also under
development.
A more detailed analysis of our leadership development efforts will
be initiated in 2005.
Action plans describing the organization's skills development, together
with the employees’ individual development plans, in accordance with the
PMD process, will provide a valuable platform for establishing priorities
and decisions in the area.
Communication
Insight and transparency
generate involvement
and motivation

14
15
 www.perstorp.com
The new version of Perstorp’s external website,
www.perstorp.com, was launched in September
2004. The website has many new features, in-
creased user-friendliness and, above all, a clearer
customer focus. Another area that underwent major
change was Careers, the part of the website aimed
at job seekers and students – an important target
group for Perstorp.
The new Careers was designed with the aim of The Latin word
presenting an up-to-date picture of Perstorp’s activi- "communicare"
ties and what the Group has to offer job seekers and means to share.
students. The information has been adapted to the
various target groups in order to market Perstorp as
an attractive workplace. Internal administration of
job applications has also been facilitated by linking
the website directly to HR+, the Group’s personnel
administration tool.

Communication for achieving goals Comprehensive view

Communication between people, companies and society at
large is vital in order for life and business to run smoothly.
This might mean families making plans for the weekend or
a company signing an agreement with a customer. Large
and small, but necessary.
Perstorp’s communication activities can also be divided
into large and small, but they all have a common goal
– to help the Group achieve its main goals. This makes
communication a strategically important management tool.
Communication is integrated into the Group’s business, so
it not regarded as an isolated activity. All communication
follows four basic principles:
Active
Perstorp should conduct active, ongoing dealings with the
Group’s interested parties to provide an accurate, up-to-
date image of the Group. As far as possible, communication
should be proactive and initiated by Perstorp.
Communication activities at Perstorp should be charac-
terized by a comprehensive view and coordination with
other efforts to promote the Group’s interests. Perstorp’s
goal, strategy and profile should be conveyed in a uniform
manner.
Communication activities in the Perstorp Group can be
divided either by recipient or by time perspective. Intern-
ally, we aim to promote our culture based on our values,
while externally, our brand is based on our vision and busi-
ness objectives. At a day-to-day level, we aim for dialogue
and the communication of information and news, both to
internal and external recipients. The diagram below shows
how Perstorp’s communication processes work:
Long-term perspective

Open Brand Culture carrier

building
Internal and external communication activities should be
characterized by transparency. All important events, both
positive and negative, should be communicated and high- External Internal

lighted, unless competition or confidentiality prevent it. News News

and dialogue and dialogue
Correct
All communication must be correct so that the recipient
has confidence in Perstorp. It should also be adapted to
the recipient to ensure that it is correctly understood. Daily perspective

16
Honesty in change processes
Spring 2004 was an intensive period for Perstorp, not least from
a communicative perspective as the Group implemented the
Miró Project with the aim of improving internal efficiency and
cutting fixed costs. Many people were affected by the organ-
izational changes, generating a huge need for both internal and
external information.
During this period, it was particularly important to follow two
of Perstorp’s basic communication principles – openness and
accuracy. The communication efforts were managed according
to these two principles as well as a third principle – speed. In
the internal communication work, focus was placed on one-
to-one meetings, an intranet-based question forum where the
management answered employee’s questions, and a new com-
munication channel for Perstorp known as streaming, where
film sequences are sent via the intranet. The films were used
as a tool for conveying messages in both images and words to
many employees simultaneously. This channel also worked well
for presenting the new organization and its employees, many
of whom been assigned new roles.

Communication channels
- Around 90% of Perstorp’s 1,800 employees have access to the Group’s
intranet, insite
- Perstorp’s internal publication insidan is distributed to all the Group’s
production and sales sites. The publication is issued 8 times a year in
Swedish and English.
The future
A project is underway at Perstorp to survey internal information exchange
and flows, with the aim of finding opportunities for rationalization and
new knowledge sharing methods. Studies of how other companies handle
these issues show that many choose to invest in virtual portals, which are
largely replacing the traditional intranet.
Perstorp’s website continue to be developed to meet the needs of the
Group’s interested parties, owners, customers, future employees or even
our neighbors. A communicative company is a successful company – and
that’s what Perstorp aims to be.

17
 Perstorp
in the
community

Investing and
growing with
responsibility

18
 For many years, Perstorp has focused on es-
tablishing a fruitful collaboration with other
sectors of the community, which has led to
investment of both financial and human re-
sources. Our level of active involvement deter-
mines our acceptance by the community and
our future recruitment of skilled employees.
Our investment includes supporting SOS
Children’s Villages and working with the UN
principles within the framework of Global
Compact. The Group also has contact with
schools and universities in many areas. We
invest in fitness activities, sports associations,
club activities etc. We conduct both long- and
short-term efforts to promote a positive view
of the company both among employees and
in society.

School and community projects

Global Compact and Code of Conduct
The UN General Secretary Kofi Annan encouraged world business to back
ten principles for human rights, working conditions, the environment and
anti-corruption. The Perstorp Group has been actively advocating Global
Compact since spring 2004.
The company’s Code of Conduct, which is based, among other things,
on the principles of the UN’s Global Compact initiative, states the business
principles that permeate our business:
We respect the individual and advocate justice, honesty, openness
and trust. We encourage networks, participation and individual
initiative.
It is our responsibility to provide secure, healthy working relationships
and forbid all kinds of persecution.
We constantly work to reduce environmental impact through our
commitment to sustainable development.
We create long-term benefits for customers, shareholders, employees
and society, and realize that sustainable profit developments are
crucial to our success.
We are a strong but just competitor. We constantly compete in accor-
dance with appropriate laws and do not participate in illegal industrial
collaboration.
All business transactions are documented in accordance with the
company’s accounting principles and local legislation. We do not
allow bribery of any kind. Every employee is expected to avoid
situations where their personal interests may conflict with the
company’s interests.
As part of the company’s recruitment efforts, the Group
operates its own upper secondary school in Perstorp. The
school conducts a three-year chemical-technical course
with emphasis on the chemical process. The students gain
working life experience on a ten-week practical placement
including two weeks at units outside Sweden.
The company also collaborates with local state schools
with the aim of presenting industry as a future workplace
option. This involves study visits, practical placements
and school-based projects. A more comprehensive prac-
tical placement takes place at Stenungsund at Perstorp
Oxo, where students from Tunaskolan’s processing course
carry out their one-year traineeship. Stenungsund also has
Molekylverkstan’, a science centre where students gain
deeper knowledge on science and the environment. Mole-
kylverkstan’ is jointly run by actors from the local chemicals
industry, including Perstorp.
Perstorp’s production unit at Castellanza, Italy con-
ducts exchange schemes and study visits with students
from administration and marketing, as well as engineer-
ing and chemical-technical students. Besides study visits,
we regularly receive trainees, and this year took on three
final-year university students specializing in quality and
environmental issues. At our production unit in Toledo,
USA, we invest in summer camps in chemistry for upper
secondary school students in collaboration with the local
university. The aim of this project is to present chemistry as
an interesting professional field. We also support children’s
environmental awareness projects.
College and university students have the opportunity of

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preparing their theses at Perstorp, thus contributing import-
ant skills to our research and development activities.
Collaboration with colleges also includes many activi-
ties and projects in Renewal & Development. Perstorp aims
for at least ten completed theses a year. In 2004 we were
far behind this target, with only four completed theses.
One reason for this was the organizational restructuring
implemented during the year. To reach this goal, the
company will work to achieve a better structure over the
coming year. For instance, we will become more clear in
specifying our preferred subjects and orientations for the
theses. We will also stress more clearly that the theses
must contribute directly to our business development.
Perstorp and SOS Children´s Villages
For Perstorp, humanitarian aid is a natural way of taking
responsibility for development in the countries we produce
in or export to. For several years, Perstorp’s production
plant in India has sponsored a house in the SOS Children’s
Village in the town of Pune, India.
In 2004, Perstorp became the main sponsor for one of
the ten SOS Children’s Villages in China. Perstorp will invest
SEK 3 million over three years to provide the 89 children
living in the village’s 12 houses with a home, a family and
an education. Investing strongly in education was a key
factor in the Chinese sponsorship project.
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In the wake of natural disaster
The Tsunami disaster in South East Asia required the world
to respond rapidly and contribute disaster funds and aid
to support the region’s long-term reconstruction. Perstorp
assisted by donating SEK 100,000 to the Red Cross.
We want to be good neighbors
As a company in the chemical production industry, Perstorp
wants good relations with the local community – including
authorities and close neighbors. Each production plant in
the Group actively addresses these issues by organizing
study visits for local residents where they can learn more
about the company and about Perstorp’s efforts to man-
age the risks connected to chemical production. At the
Group’s plant in Ghent, Belgium, the company regularly
communicates with its neighbors by distributing letters and
arranging an open house. Read more about the Group’s
environmental report at www.perstorp.com.
The future
The Perstorp Group is continuing its long-term investment in community
and school projects in many areas. We aim to present our chemicals in-
dustry as an interesting workplace for our youth, while continuing to take
responsibility for a sustainable environment and community development.
Cooperation should occur at many levels, and each small meeting is an
important contribution to the overall picture.
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Working
environment/
Health
Well-being is a
prerequisite

21
For many people, health means both ties. Employees are also offered yoga training, Pranayam
deep breathing exercises, stretching and meditation. At
physical and mental well-being the Toledo unit, the company helps pay for gym member-
WHO’s (World Health Organization) definition of health is: ship.
The greatest possible well-being of the individual, physi- The company will continue to adopt a more con-
cal, spiritual, intellectual and social, and not just in the centrated, focused approach to keep-fit activities as an
absence of illness. important step in its long-term efforts to minimize sick
Traditionally, workplace health issues have tended leave figures.
to focus on the physical working environment. In recent
years, however, increased focus has been placed on the
psycho-social working environment. At Perstorp, we see
Corporate healthcare
A significant aspect of securing a good working environ-
organizational efficiency, good leadership and a favorable
ment is good corporate healthcare. Perstorp’s primary
psycho-social environment as central factors for employee
concern in the area of corporate healthcare is to conduct
health and well-being.
preventative working environment measures and health-
People Satisfaction (see Employees, page 9) gives us an
promoting measures. The Perstorp unit has its own cor-
indication of how our employees feel, both physically and
porate healthcare structure, while the Stenungsund plant
psychologically. Another important indicator is the PMD
has an agreement with an external provider of prevent-
talks (see Employees, page 8).
ative healthcare, health checks and drug tests. In Ghent,
Belgium, the company has an agreement with an external
Keep fit healthcare provider, which also assists with ergonomic
Perstorp’s plant in Stenungsund focuses on the whole per- issues and work-related stress. In Bruchhausen, Germany,
son. This means that keep-fit activities are linked to safety the company has a contract with a doctor that regularly
activities. A Health and Safety Day has been introduced visits the site.
to provide exercise for all employees. A keep-fit group
works with a range of activities such as lunch walks, gym
workouts, spinning etc.
The Perstorp unit organizes keep-fit activities including
spinning, boxing training and various kinds of weight train-
ing. In India, there are indoor and outdoor training facili-

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Sickness absence
Strong preventative healthcare efforts to reduce sickness ab-
sence are essential to Perstorp. These efforts include many
different factors: clear values, working environment issues,
training and information, provision of keep-fit activities,
PMD process talks, People Satisfaction surveys and ready
access to healthcare at an early stage. Although these efforts
cannot prevent all sickness absence, the Group reported a
comparatively low sickness absence rate in 2004 (see Key
figures page 6). A drop in sickness absence has been re-
ported at our Swedish units compared to the 2003 figures,
which we regard as very positive. The equivalent figure has
not yet been reported for units outside Sweden. The efforts
mentioned above may be part of the reason for the low
figures. Another possible reason is that we usually work in
quite small groups where employees have the opportunity
to influence their work. We aim to continue keeping sick-
ness absence figures down and make them even lower if
possible, under our motto “healthy at work”.
Safety
Safety at Perstorp is a priority area, not least in production,
where risk factors are highest. Safety in production, hand-
ling of raw materials and products, transport and storage,
maintenance work and service – there are many situations
where we must be aware of what we are doing and not
put ourselves or others at risk. As mentioned in Skills (page
12), top priority areas for skills development in 2004 were
working environment, risk management and safety. Active
efforts are underway at production sites around the world
to prevent accidents by surveying, analyzing and preventing
accidents on the basis of incident reports. Over the past few
years, much work has been done to reduce the number of
accidents, concentrating on LTAR = Lost Time Accident Rate
(the number of LTAs per million working hours), see Key
figures table on page 6. Training, risk analysis and a range
of protective measures cannot prevent all accidents. Only
single-minded, determined safety efforts, combined with
personal responsibility and awareness on the part of each
employee, can help us avoid this. On a positive note, the
number of LTARs has fallen drastically since 2003, which is
a step on the road to completely eliminating accidents.
The future
Keep-fit activities will continue to be prioritized throughout the Group in
future. For instance, a keep-fit project will begin at the Perstorp plant in
late 2005.
A completely new alcohol and drug policy has been adopted at the
Group’s Swedish units, with the basic concept “addiction out – employees
in” remains. Management and employee training efforts raise awareness
regarding addiction, thus increasing opportunities for helping the people
concerned.
Safety is another priority area where all production sites will work very
actively to prevent accidents that can cause sick leave. This is part of the
Group’s ongoing improvement efforts.
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 World-class employees
Perstorp is a market leader in certain areas of specialty
chemicals and material technology. Our products are
important additives for the coatings and plastics indus-
tries as well as the engineering, construction and auto-
motive industries. The Group had sales of around SEK
6.5 billion in 2004 and employs approximately 1,800.
We have production plants in eight countries in Europe,
North America and Asia. Perstorp’s parent company is
Sydsvenska Kemi AB, and the Group is controlled by
the Industri Kapital 2000 fund. Industri Kapital is one
of Europe’s leading risk capital companies.
Perstorp aims to promote a culture that frees up in-
dividual and group potential for optimum performance.
This not only refers to the actual work, but also to our
attitudes – the ability to find new solutions, do our best
and occasionally dare to risk failure. Foresight, integrity,
courage to stand up for ourselves and insight about the
consequences of our actions are just a few of the per-
sonal traits that we encourage in employees, and which
help create a Group with world-class employees.

More information about us and our products is available

at www.perstorp.com

© Perstorp AB 200508. www.am-tryck.se

Perstorp AB, SE-284 80 Perstorp

Phone +46 435 380 00 Fax +46 435 381 00
e-mail perstorp@perstorp.com Internet www.perstorp.com

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