Poland chems firms need to privatise to go forward - thinktank

02 December 2009 15:23  [Source: ICIS news]

PRAGUE (ICIS news)--Failure to move forward with the privatisaion of the Polish chemical industry and to liberalise gas markets could leave major companies facing a similar decline to the shipbuilding industry, a thinktank warned on Wednesday.

"[If these moves are not accomplished, then] following on from the building of a museum of the shipbuilding industry we will also need a museum of the chemical industry," said Robert Gwiazdowski, president of the Warsaw-based Adam Smith Centre.

Gwiazdowski was opposing critics who say that by not postponing the current privatisation process amid depressed investment markets, Poland risked accepting very low prices for its flagship producers such as Ciech, Europe's second largest soda ash producer.

It was vital to push on with securing fresh private investment for the companies as soon as possible, he said.

Chemical industry restructuring agency Nafta Polska expects binding offers for Ciech and two other chemical producers within two to three weeks. Immediately in the new year, it plans to appoint a privatisation adviser for the country's two largest fertilizer producers, Zaklady Azotowe Pulawy (ZAP) and Zaklady Chemiczne Police (ZChP).

Opposition to continuing with the privatisation has largely come from the Solidarity trade union. It claims that not only would Poland secure low prices for the firms, it would fail to include a "social charter" in the sale contracts, meaning workers would have little protection from job and salary cuts introduced by new owners.

However, Nafta Polska vice president Wieslaw Skwarko said he was confident the current privatisation process was the best possible way to safeguard the chemical industry's future, with prices and investment plans "that will be acceptable to all parties".

Gwiazdowski also addressed chemical and fertilizer companies' concerns that Poland's non-liberalised gas market meant they were sometimes having to pay twice as much for gas as western rivals.

He pointed out that it would not be in Polish gas monopoly PGNiG's interest to see chemical companies fail due to high gas prices because they were its key customers. ZAP, for instance, is Poland's largest industrial user of gas.

If things continued on the current course"we could even need a museum of the gas industry", added  Gwiazdowski.

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By: Will Conroy
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