Italy's Polimeri Europa becomes versalis in €2bn restructuring plan

23 April 2012 11:12  [Source: ICIS news]

Chemical plantLONDON (ICIS)--Italy’s largest petrochemical producer Polimeri Europa has been rebranded versalis as part of an ambitious strategy to reflect the company’s future direction, the major revealed on Monday.

The relaunch is intended to highlight the company’s new international focus, as well as emphasise its commitment to becoming a more efficient and sustainable player in the chemical sector, said CEO Daniele Ferrari in an exclusive interview with ICIS.

“The brand is the pillar of corporate identity, reputation, culture and much of the company’s drive,” said Ferrari. “Most importantly, the brand has to express as much as possible through its identity, the stakeholders’ perception and the company’s overall vision.

“Versalis is a result of an interesting naming process; it suggests versatility, direction, accessibility, path, universality, being global. It reflects the business trends,” he added.

Outlined in a special supplement published on Monday in ICIS Chemical Business magazine, around €2bn ($2.6bn) is being invested in a four-year plan through to 2015 to complete the transformation – representing the largest outlay in the company’s history. It expects to see the result of some of these changes by mid-to-late 2013.

Part of the strategy will see the firm expand its geographical footprint to become less reliant on Europe, which has to compete with rapidly emerging markets such as Asia and the Middle East. Europe currently accounts for 90% of the company’s sales, with about 50% in Italy, said Ferrari.

“Europe remains an outstanding marketplace and continues to be a leading chemical producer but, with respect to the challenges stemming from new and strong players on a global level, is destined to decline if not willing to go into action soon and innovate, renew the asset base and create a supportive environment,” said Ferrari. “It is in this very spirit that we’ve undertaken our new way forward.”

The business will now be more market focused and has undergone extensive reorganisation to concentrate on licensing, innovation and four core business units: styrenics, polyethylene (PE), intermediates and, particularly, elastomers.

Versalis has a leading position in the elastomers business, and this business, unlike some other product families, is less subject to competition from lower cost base regions,” said Ferrari. “I would consider elastomers as the cornerstone in our strategies.”

Ferrari acknowledged that in addition to the traditional market challenges that continue to face the chemical industry, players have been severely affected by the global financial downturn, geopolitical concerns and competition from more advantaged regions.

The new strategy will see versalis regenerate several production sites, with improvements made to integration and production flexibility. There will also be efforts to develop green chemistry.

The expenditure includes the previously announced €500m Matrica project, a 50:50 joint venture with Italy’s Novamont, to produce bio-based materials at its Porto Torres site in Sardinia. This will see the construction of seven new plants and a research centre, and will include 350,000 tonnes/year of bio-based capacity.

“Change is what some parts of the European chemical industry needs now. We had no other options but to start converting our asset base and re-design the company's boundaries. [We’ve had to] innovate and consolidate our portfolio, invest on R&D, take opportunities overseas, and enter new businesses like in bio-based chemistry. This is the future, this is what the future requires,” said Ferrari.

“We just expect to strengthen in Europe and become a reliable reference, and partner at times, with an extensive footprint in our target marketplaces, in Asia, India, Latin America, in particular,” added Ferrari.

The producer was originally named Polimeri Europa in 1995 following a joint venture between Enichem and Union Carbide. In 2010, its turnover totalled €6.1bn and it employed some 6,000 people.

($1 = €0.76)

Click here to read the supplement

By: Andy Brice
+44 20 8652 3214

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