Poland's ZchP cuts capex $22m on recession fear

23 October 2008 12:31  [Source: ICIS news]

PRAGUE (ICIS news)--Poland’s second largest fertilizer maker Zaklady Chemiczne Police (ZchP) said on Thursday it is to cut its capital expenditure budget by zlotys (Zl) 70m ($22.6m/€17.6m) for its 2008-09 fiscal year on fears of a global recession.

 

The capital expenditure budget would be a cut to Zl150m, it added.

 

Precise details of the cuts would be announced on 14 November when the company was due to announce a revised business strategy, it said.

 

“In order to counter the effects of the financial crisis, the management board has appointed a team of professionals who have already taken action to control and improve the situation,” the company added.

 

ZchP was also currently factoring in to what extent a gas tariff increase of 10.3% announced by natural gas monopoly Polish Oil & Gas Co (PGNiG) would have on its profits, it said.  

 

ZchP’s response to the deteriorating market environment and higher feedstock costs would include “projects for internal savings measures, aimed at achieving a stable situation”, the company added.

 

Its current operational improvement programme included replacing 30-year-old gas processors in its power plant to try and achieve annual savings of Zl400,000 and the optimisation of the ammonia production line (APC system), to be completed in 2009, it said.

 

ZChP also announced that it had just completed the pre-registration of its used and produced chemicals for the EU’s chemical safety regulations, known as Reach.

 

Under the Polish government's new plan for the consolidation and privatisation of the Polish chemical industry, ZchP had been told to explore the potential of linking up with the country’s largest Polish fertilizer maker Zaklady Azotowe Pulawy (ZAP) - also a melamine and caprolactam producer - to find a common owner for further investment. Ministers see PGNiG as a candidate.

 

($1 = €0.78/$1 = Zl3.07)

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By: Will Conroy
+44 20 8652 3214

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