12 December 2008 12:05 [Source: ICIS news]
PRAGUE (ICIS news)--Zaklady Chemiczne Police (ZChP) is putting all investment plans that require external financing on hold, the the second largest Polish nitrogen fertilizer firm and titanium dioxide (TiO2) producer said on Friday.
Recession-hit demand meant that projects such as a zloty (Zl) 125m ($43m/€32m) plan to boost the urea installation's capacity to 600,000 tonnes/year from 400,000 tonnes/year and a Zl 120m initiative to expand the company's seaport facility had been suspended indefinitely, ZChP added.
A plan to expand the company's output of high-margin nitrogen-phosphorous-potassium (NPK) fertilisers was also set to be postponed, it said.
“[The company is saying] it is hard to proceed with investments when the company is struggling for profitability on the earnings before interest and tax (EBIT) line and cash flows will be key for the coming months,” said investment bank Wood & Company.
Around half of ZChP's revenues are export-based.
The producer's recently released new business strategy outlined a six-year, Zl 600m capital expenditure programme running from 2009.
ZChP's fertilizer units have been producing at around 30% of capacity since late November because of the global economic slowdown.
Polish Information and Foreign Investment Agency (PAIiIZ) this week announced that some Gulf Arab sovereign wealth funds may be interested in picking up passive stakes in the company in the ongoing Polish chemical sector privatisation.
($1 = Zl 2.92, €1= Zl 3.89)To discuss issues facing the chemical industry go to ICIS connect
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