Poland’s ZChP unveils strategy to double revenues

04 December 2008 15:07  [Source: ICIS news]

PRAGUE (ICIS news)--Poland’s second-largest nitrogen fertilizer firm and titanium dioxide (TiO2) producer, Zaklady Chemiczne Police (ZChP), could more than double its revenues under a new business-expansion strategy, the company said on Thursday.

The projected growth in annual revenues, to zloty (Zl) 5bn ($1.6bn/€1.3bn) by 2015 from the expected result of more than Zl2bn in 2008, could be achieved under the “optimistic variant” of the strategy, the company said.

The projection was devised on the premise that the world economic crisis would not last longer than one year, ZChP said.

A second, “pessimistic variant”, based on the economic crisis lasting three years, forecast that ZChP could achieve up to Zl4bn by 2015 and Zl5bn or more by 2020.

The strategy outlines a six-year, Zl600m capital expenditure programme running from 2009.

Approximately 40% of the programme would be sourced from ZchP's own capital, with about half designated for acquisitions.

Another Zl125m would be earmarked for boosting its urea installation's capacity from 400,000 tonnes/year to 600,000 tonnes/year, with Zl120m set aside for expanding the company's seaport facility.

Around half of ZChP's revenues are export-based.

The company's fertilizer units have been running at around 30% of capacity since late November due to poor demand resulting from the global economic slowdown.

The economic decline has also led ZChP to postpone the release of its 2009 financial forecasts and to concede that it may have to delay investments.

ZChP, a state-controlled company, is studying a Polish treasury ministry recommendation that it pursue further strategic investment by linking up with Poland’s largest fertilizer firm and melamine and caprolactam producer, Zaklady Azotowe Pulawy (ZAP), to find a common owner through privatisation.

($1 = Zl3.06/€1 = Zl3.87)

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By: Will Conroy
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