28 September 2012 16:55 [Source: ICIS news]
LONDON (ICIS)--Poland's Ciech group is likely to cut its workforce, close unprofitable production lines and possibly liquidate its toluene di-isocyanate (TDI) subsidiary Zachem under deeper restructuring commenced by its new management, Raiffeisen Centrobank said on Friday.
“I believe there is a large probability that the [new] restructuring will help to increase Ciech's margins,” said Raiffeisen analyst Dominik Niszcz, noting the group is the only major state-controlled Polish chemical producer yet to attract a strategic investor.
“The previous management focused mainly on selling subsidiaries while the current plans go further - deeper workforce cuts, a reduction in employees' privileges, centralising administrative functions of selected subsidiaries and closing unprofitable production lines within profitable subsidiaries,” he added.
Lossmaking Zachem, which produces TDI used by the automotive and furniture industries, may be liquidated if no margin improvement is achieved, Niszcz also noted.
Workers at Ciech, a major soda ash maker in the EU, were obviously against the deeper restructuring, but the controlling shareholder in the group, the treasury ministry, “is determined to boost the value of the company in order to later sell it to a private investor”, the analyst added.
Despite the protests of the unions, the treasury ministry might therefore accept some workforce cuts within certain limits, he said.
“The new CEO [Dariusz Krawczyk, former CEO of Poland's Synthos, a major synthetic rubber producer] needs time - he was appointed in May, so the treasury ministry should wait until next year and let him implement his ideas,” Niszcz said.
On 25 September, a treasury ministry source confirmed state officials were actively searching for a Chinese investor that may buy Zachem.
A spokesman for Ciech said the group was refraining on commenting on the restructuring until it was completed.
($1 = €0.77)
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