A "difficult economic environment" was the major factor in Linde's materials handling businesses returning a profit of EUR148 million (USD159.3 million) in 2002, down 38 percent on the EUR240 million (USD258.3 million) 2001 result.

Linde's 2002 annual report, released last week, showed sales revenue peaked at EUR2.979 billion (USD3.2 billion), down three percent from EUR3.071 billion (USD3.3 billion) in 2001. Orders received fell 2.8 percent from EUR3.14 billion (USD3.38 billion) to EUR3.053 billion (USD3.29 billion).

"After the drastic fall in demand (30 percent) in 2001 in north America, our European operations suffered a similar fate in 2002. In the first six months of the year, demand declined by around 10 percent, although it fell rather less in the second half," the report said.

Despite the poor economical situation, Linde was able to retain market leadership in Europe with 35 percent. Linde and subsidiaries Still and OM Pimespo increased their market shares in Germany but fell in Italy and Spain.

In America and Asia, the market improved. Linde doubled sales volumes in Japan with the help of joint-venture partner Komatsu. The increased cooperation resulted in greater use of the companies' production facility in Xiamen, China.

Linde would counter the negative effects of the economic downturn with an optimisation program which would streamline processes, reduce costs and generate improvements in competitive ability and earnings power, the report said.

The program, called TRIM.100 (Total Reorganisation of our International Multi-brand strategy), would strengthen Linde's individual brands and produce savings of EUR100 million (USD107.7 million) in 2003 and 2004, Linde said. The program would also see 1000 jobs cut.

Under TRIM.100, Still, OM Pimespo and Komatsu would "form a new worldwide brand association, with each retaining its brand identity and independence". Linde would be reinforced as a global brand.