Unipetrol takes right path in products shift, says bank

21 June 2010 17:53  [Source: ICIS news]

PRAGUE (ICIS news)--Czech petrochemical producer Unipetrol has taken the right path in responding to looming competition from the Middle East by shifting towards higher value-added specialty products, Raiffeisen Centrobank said on Monday.

"This way, the company hopes to defy the looming Mid-East generic petchem competition. We agree that this strategy has the potential to provide a viable business basis for Unipetrol, especially if one takes into account the fact that Central & Eastern European per-capita petchem consumption still lags behind that of Western Europe," the bank said in a research report.

"These new suppliers [in the Middle East] will only be able to compete in the segment of low-tech generic petchem products like commodity ethylene or propylene," it added.

Unipetrol's petrochemical sales had been boosted by the expansion of its polypropylene (PP) unit in Litvinov, from 204,000 tonnes/year to 275,000 tonnes/year, which was completed in 2009, Raiffeisen said.

The company should also shortly be given a lift by the completion of a 120,000 tonne/year butadiene unit in Kralupy nad Vltavou, near Prague, established under a 51:49 joint venture with Polish synthetic rubber producer Synthos. Unipetrol had expected it to be operational by the first quarter of this year, but delays have put back the start by several months.

Unipetrol also planned to further boost its ethylene steam cracker capacity in Litvinov from 480,000 tonnes/year to 540,000 tonnes/year by 2011.

"Additionally, utilisation of the plant is supposed to reach 90% from the current 70-75%," added Raiffeisen.

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By: Will Conroy
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