Synthos to build S-SBR/PBR plant in Poland by 2015

03 August 2011 16:48  [Source: ICIS news]

LONDON (ICIS)--Synthos intends to build a 100,000 tonne/year solution styrene butadiene rubber (S-SBR) plant in the Krakow special economic zone in southern Poland by 2015, the Polish company said on Wednesday.

The facility, which would also be equipped to switch to polybutadiene rubber (PBR) production instead of S-SBR, will cost around zlotych (Zl) 260m ($91.5m, €64.5m), Synthos added.

Another Zl 30m would be spent on building a company research and development centre, said Synthos, which is also a producer of polystyrene (PS).

Synthos, Europe's second-largest synthetic rubber producer, would be entitled to tax relief for locating the investments in the special economic zone, noted ING Bank.

“Based on our 2015 forecast of PBR prices, the new installation could add Zl 190m in EBIT [earnings before interest and tax] annually from 2015,” said ING analyst Adam Milewicz.

In April, Erste bank noted that Synthos was sitting on a cash pile from big profits achieved from a sustained market boom in synthetic rubber, largely caused by shortages of natural rubber from producers hit by extreme weather in eastern Asia.

The company's synthetic rubber capacities currently amount to 330,000 tonnes/year, comprising 250,000 tonnes/year of low-performance emulsion styrene butadiene rubber (E-SBR) and new capacity of 80,000 tonnes/year of high-performance PBR, the output of which is due to start in the third quarter.

“We view the new rubber capacity additions positively, given expected large demand for high-performance rubber resulting from a new EU [tyre] regulation that takes effect from November 2012,” said Milewicz.

“New tyres will be labelled for fuel efficiency, wet grip and noise performance. In our view, tyre labelling should influence consumer behaviour and put upside pressure on high performance S-SBR/PBR consumption in the long term,” he added.

($1 =  Zl 2.84, €1 = Zl 4.03)

By: Will Conroy
+44 20 8652 3214

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