Poland's Synthos signs six-year $1.15bn rubber deal with Goodyear

24 August 2012 13:11  [Source: ICIS news]

(recasts, clarifying company descriptor in third paragraph) 

LONDON (ICIS)--Poland's Synthos announced on Friday that it has signed a six-year contract to supply solution styrene butadiene rubber (S-SBR) and emulsion styrene butadiene rubber (E-SBR) to US-based tyre maker Goodyear.

The value of the deal with Goodyear, which runs to the end of 2018, is estimated at zlotych (Zl) 3.74bn ($1.15bn, €912m), the company added.

Synthos is Europe's second largest SBR and BR producer.

The price-setting mechanism for rubber covered by the contract is based on feedstock prices, the company said.

“Although the new contract does not necessarily affect our sales volume forecasts, we perceive the news as positive from the perspective of volume visibility for the next few years,” said Piotr Drozd, an analyst at Prague-based investment bank WOOD & Company, in a note to investors.

“Assuming that the first contract volumes are delivered in the third quarter of this year, the estimated contract value implies approximately Zl 0.6bn in sales per annum. Against our ESBR price forecast of €2,300/tonne, this translates into around 60,000 tonnes of ESBR/SSBR annually, or 23% of our 2013-15 forecasts and 18% of our 2017-18 volume estimates [for the company],” he added.

Synthos is currently constructing a 100,000 tonne/year S-SBR and polybutadiene rubber (PBR) facility in Krakow, southern Poland, that will operate with licensed Goodyear technology.

“We expect the first batches from the new unit to arrive in 2015 and the unit to operate with 90% capacity utilisation starting from 2017,” said Drozd.

($1 = Zl 3.26, €1 = Zl 4.10)


By: Will Conroy
+44 20 8652 3214



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