As expected, ECT’s light duty catalyst business, which represents just under 80% of ECT’s sales excluding precious metals, was directly impacted by this reduction in vehicle production. Our light duty unit sales in North America and Europe fell broadly in line with overall vehicle production. Business in North America started the financial year slowly as reduced vehicle demand and de-stocking continued. However, US Government incentives, the so-called “Cash for Clunkers” scheme, resulted in a gradual improvement in sales through the summer months. Europe also had a slow start but autocatalyst sales have picked up on the back of government incentive schemes and in September our unit sales were ahead of the same period last year, the first time in 12 months. Sales in Asia have held up well on the back of increased demand in China, which also benefited from government incentives that are due to expire in December 2009. We are continuing to gain market share in China and in total Asia now accounts for approximately 16% of our light duty sales.

We are nearing completion of the first phase of our new, highly efficient production facility in Macedonia. Shipments from this facility commenced in October. Once fully commissioned, it will have the capacity to manufacture four million light duty catalysts per year. However, the site also gives us flexibility to expand production further if required.

Sales of HDD vehicles are historically more volatile than those of light duty vehicles as haulage and construction companies respond more rapidly to changes in the economic environment and adjust levels of investment accordingly. In addition, there have been no government incentive programmes for HDD vehicles and as a result vehicle sales fell significantly in both North America and Europe. Furthermore, whilst new, much tighter HDD legislation comes into force from 1st January 2010 in North America, there was no evidence of the anticipated “pre-buy” in the half year where vehicles are purchased ahead of the implementation of new legislation to avoid additional cost. Our unit sales of HDD catalysts in the period to 30th September were down approximately 55% on those in the first half of last year. Sales excluding precious metals of HDD catalysts fell accordingly and as a result represented some 17% of ECT’s total. While still early days, sales in October were, however, a little more encouraging.

Despite the short term difficulties in the HDD market, we have recently commissioned our new HDD catalysts manufacturing plant in Smithfield, Pennsylvania, USA and are well positioned to benefit from future recovery in this market. The market for HDD catalysts is expected to show substantial growth over the next decade driven by tightening legislation in the developed markets of North America, Europe and Japan, the spread of legislation to developing markets, such as China, India and Brazil, and legislation covering non-road vehicles in Europe and North America which starts in 2011. We still believe that, after allowing for the impact of a sustained economic downturn, the market for HDD catalysts will grow to about US $2.5 billion in sales excluding the value of precious metals by the end of 2014.

Our Stationary Emissions Control (SEC) business, which includes our Powerplants business that manufactures catalysts used to reduce emissions of oxides of nitrogen (NOx) from power stations, has been impacted by a reduction in demand in the first half. This is due to our customers, in both China and the USA, delaying projects as they experienced lower demand for electricity due to the recession.

In October the group made a small bolt-on acquisition in this area, purchasing the assets of Applied Utility Systems Inc. for up to US $10 million. This acquisition complements our existing NOx emission control business and will enable us to expand the range of applications that we serve.

Process Technologies’ sales excluding precious metals were 1% higher than in the first half of the last financial year. At constant exchange rates sales decreased by 2%. While the long term fundamentals for our Process Technologies businesses remain strong, the current economic environment has resulted in a number of projects experiencing short term delays which have impacted the results of the business in the first half.

Within our Ammonia, Methanol, Oil and Gas business (AMOG), the ammonia and methanol markets have remained robust with continued investment in capacity, particularly in China and the Middle East. Demand for methanol catalysts continues to grow, partly due to the increasing use of methanol in transportation fuels in China. This is enabling the country to use its enormous coal reserves to reduce the amount of oil that it has to import. Investment has also continued in synthesis gas projects in the Middle East where we have seen expansion in ammonia production capacity to meet demand from fertiliser manufacturing. However, demand from oil refineries was significantly weaker than in the first half of last year, reflecting lower demand for transportation fuels, heating oil and gas as industrial activity contracted around the world.

The group’s investment in the expansion of our site at Clitheroe in the UK to manufacture the latest generation of syngas catalysts is nearing completion with final commissioning now underway. The initial launch of the new range of catalysts produced in this facility was made to the methanol industry in June and generated a great deal of customer enthusiasm about the benefits that they deliver. These new products reinforce our leading position in the market for methanol catalysts and technology and we are confident that sales will have a positive impact in 2010.

Davy Process Technology, which develops and licenses chemical processes, has had another good first half. Demand in China has been the key driver and during the first six months we have agreed two new licensing contracts in China and one in the USA.

In our Fuel Cells business, sales excluding precious metals, although still modest, have continued to grow in particular for natural gas powered fuel cells used in combined heat and power applications in large buildings and for portable power applications. However, Fuel Cells’ growth has been adversely impacted by the effects of the economic environment on some of our smaller customers.