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- 73 -

Some risks, particularly those relating to accidents, are adequately insured. In most cases, preventive

measures and alternative scenarios have been drawn up to minimise the scope of any ensuing damage.

Moreover, where possible financial instruments are regularly used to limit normal business risks or risks

relating to fluctuating exchange rates, interest rates or prices of certain materials, particularly in the

energy sector.

Chemicals groups like Prayon are exposed to numerous known risks:

market risks:

- customer relocation;

- issues relating to substitution or reformulation in the case of some applications;

- supply and demand imbalances, especially caused by the appearance of new producers;

supply risks:

- a sudden boom in demand or increased scarcity of certain raw materials, energy or logistical


- geopolitical tensions or crises;

industrial risks:

- accidents in production plants or when transporting hazardous goods;

- environmental damage;

regulatory risks:

- operating licences and conditions;

- restrictions on the use of certain products;

- administrative and tax requirements;

- provisions of the REACH Regulation.

The Group is prioritising research and development in its areas of competence, allocating it a greater

share of its human and financial resources (around €10.7 million in the 2016 budget).

The 2017 budget includes a limited programme of capital expenditure (€15 million) in order to further

reduce debt.

Significant developments are already under way in several leading-edge areas:



(Prayon-Pulead JV currently being created) for batteries for energy storage and (to a lesser

extent) electric vehicles;

uranium extraction;

probiotics (nutrition);

an iron-chelating PK fertiliser for horticulture;

polyphosphoric acid;

innovative processes in the production of fertiliser-grade phosphoric acid adjusted to rock supply in

pulp form (under development with OCP).