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Croda flags currency impact on profits

Croda International, the chemicals maker which makes ingredients that go into everything from face creams to insecticides, warned its full-year profits will be lower this year due to the strong pound.

The East Yorkshire-based business, which counts Procter & Gamble, Unilever and L'Oreal among its key customers, said if the pound remained at current levels currency effects would have cut 2013 pre-tax profits of £251.4 million by about £19 million.

Last week the pound climbed above 1.70, a near six-year high against the dollar, which led the CBI business lobby group to warn that the rise in sterling could hit export orders.

Croda, which employs 3,400 staff in 34 countries and was formed in 1925, accounts for around 59% of its sales from the Americas and the Asia Pacific region.

As well as the sterling impact, the business said it suffered a less favourable sales mix at its consumer care unit, which produces chemicals for skin creams, herbicides and animal care.

Croda also said sales at its industrial business - chemicals that go into paper and rubber production - were lower. The firm added that market conditions, especially in Europe remain subdued.

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