Poland’s PKN Orlen poised to expand into new businesses

27 December 2010 16:44  [Source: ICIS news]

PRAGUE (ICIS)--PKN Orlen is poised to enter the second phase of its 2009-2013 strategy, which would place emphasis on expansion into new business segments and possible acquisitions, the Polish oil, chemicals and petrochemicals group said on Monday.

The move by PKN Orlen into the 2011-2013 growth period - following two years devoted to priorities such as efficiency savings and paying down debt - would partly commence with the start-up of the company's new 600,000 tonne/year purified terephthalic acid (PTA) plant in Wloclawek, which should produce marketable PTA soon into the new year, it added.

Czech subsidiary Unipetrol, meanwhile, stood ready to maximise operations at a new joint-venture 120,000 tonne/year butadiene unit to provide the principal raw material for an 80,000 tonne/year polybutadiene rubber (PBR) plant to be opened by Synthos in Poland in early 2011, it said.

“We will also monitor the market to identify any potential acquisition opportunities that would make economic and operational sense,” said Orlen spokesman Aleksandra Pustelnik.

Unipetrol was potentially in a good position to enter into acquisitions given its low net debt position of koruna (Kc) 413m ($21m, €16m) translating to a net debt/earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of just 0.09, said Raiffeisen Centrobank analyst Philipp Chladek.

But whether Orlen was giving it a proper chance to take advantage of this situation was “the major conundrum about Unipetrol”, he added.

“The company wanted to present a new strategy by the end of this year [but Orlen board approval of it] was postponed until mid-2011. I think there are opportunities but Unipetrol can only do what parent Orlen allows it to do, and up to now the order is to stay put and concentrate on the Czech market,” said Chladek.

Orlen has never hampered the growth of Unipetrol “and was dedicated to... maximising its development potential”, responded Pustelnik.

($1 = Kc 19.27) ($1 = €0.76)

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By: Will Conroy
+44 20 8652 3214

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