26 April 1999 00:00 [Source: ICB Americas]The Yugoslavian conflict is beginning to disrupt trade in bulk chemicals in neighboring countries because Nato's bombing of bridges in Serbia has blocked the River Danube.
The river, Europe's longest waterway, is a major route for exports of bulk products into Western and Central Europe from Serbia's neighbors Rumania and Bulgaria, as well as from the Ukraine and Russia.
Barges travel north along the river through Serbia to Hungary, Slovakia, Austria and Germany. Now shippers are scrambling to find alternative routes. The chemicals most affected are soda ash and fertilizers, much of which come from Rumania, Bulgaria and the former Soviet Union.
"Once the Danube is closed, you might as well forget about transporting some bulk products from southeast of Serbia," says Helmut Struger, general manager of Neuber, a Vienna-based chemicals distributor operating in Eastern Europe. It uses the Danube to transport Rumanian soda ash into Western Europe.
"You can switch to rail, but the extra cost is liable to make your price uncompetitive," he adds. "Another alternative is to ship bulk products out via Black Sea ports, but that also can be expensive."
Sodi of Bulgaria, which has one of the largest soda ash plants in the world, is able to rely on Black Sea ports for much of its exports. "The transport problems on the Danube have been having only a little effect," says a spokesperson for Solvay, Sodi's majority shareholder.
Rumanian fertilizer producers have also found a major export route shut off. "We could transport Rumanian fertilizer through the Black Sea, but that would have been too costly," says Tim Gaetgen, an executive in the international fertilizer department of Helm AG, Hamburg. "We have decided not to buy any more fertilizer from Rumania because it is near the end of the fertilizer season."
Even if the war ends soon, it is expected to take several months to clear the wreckage in the Serbian stretch of the Danube. Chemical traders and distributors also anticipate a long wait before business resumes in Serbia. "We are virtually writing off our annual $8 million to $9 million of business with Serbia this year," says Mr. Struger, whose company has a sales office in Belgrade.
Serbia's major petrochemicals site at Pancevo is reported to have been severely damaged by Nato bombs.
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