ARJ Arch Chemicals

Swiss chemicals maker Lonza Group AG (LONN.VX) Wednesday said that as part of its five-year business plan it wants to spread its geographic reach, partly to limit its dependence on Switzerland.

Chief Executive Officer Stefan Borgas said during a conference call after the company reported first half results that Lonza is looking for more partnerships and will continue to seek small and mid-sized takeovers after its $1.2 billion acquisition of U.S. biocides maker Arch Chemicals Inc. (ARJ).

The U.S. acquisition, together with cost cuts and plant optimizations, should help the Basel-based company reach a return on operating assets of about 15% over the next few years, up from about 10.8% in 2010, Borgas said. He added that as part of its efforts to improve plant efficiency, Lonza may move some product lines out of Switzerland.

Lonza's first half net profit fell 28.1% to 97 million Swiss francs ($120.9 million), mainly due to the strong Swiss franc, its reporting currency. Borgas said the negative full-year currency impact could be above the envisaged CHF70 million as the franc has continued to rise recently. Besides natural hedges, Lonza uses contract and forward hedging to limit the effect of the strong franc. A substantial part of Lonza's costs are generated in Switzerland, where it employs more than a third of its 8,200 staff.

By Goran Mijuk, Dow Jones Newswires, +41 43 443 80 47;

goran.mijuk@dowjones.com

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