20 years ago

07 July 2003 00:00  [Source: ICB]

20 years ago: ECN 11 July 1983

France's government expenditure supervisory body the Cour des Comptes has hit out severely at investment decisions made by the state-owned chemicals sector, referring to them as 'catastrophic'.

At the forefront of the criticism is the notorious CdF Chimie steamcracker at Dunkirk, an ambitious project which the government body considers was pursued 'without sufficient objective assessment'. CdF Chimie is accused of misrepresenting the choice between expanding its activities at Carling or constructing a new cracker at Dunkirk. In the end it was the attraction of job creation in the north of France that enticed the government to give the green light to the Dunkirk plant.

After a total investment of FF1.5bn, the Dunkirk cracker ran up losses of FF123m in 1979, FF248m in 1980 and FF458m in 1981.

CdF Chimie's over-optimism vis-a-vis the Dunkirk project has proved 'economically ruinous', the Cour des Comptes asserts. Furthermore, the company is accused of entering into precarious and onerous financing arrangements.

The acquisition of the paints concern Duco by CdF Chimie's paints subsidiary Ripolin, and of Sanders by EMC, also came under fire for overvaluation of the assets bought. An even greater black mark is awarded against Elf for the purchase of the former Rhone-Poulenc heavy chemicals assets.

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