Polish Opposition urges govt to block Zachem TDI liquidation

21 November 2012 15:23  [Source: ICIS news]

LONDON (ICIS)--Polish Opposition party Law and Justice (PiS) has called on the government to block the liquidation of Ciech's Zachem toluene diisocyanate (TDI) business in the interests of a wider rejuvenation of Poland's industrial policy, PiS said on Wednesday.

The closure of what is Poland's only TDI manufacturing capacity would only add to the country's annual €5bn ($6.4bn) chemical goods trade deficit at a time when Polish industrial policymakers should be trying to redress such imbalances, it added.

“Poland's industrial policy boils down to a liquidation industry,” said Mariusz Blaszczak, the chairman of PIS' parliamentary caucus, which held a meeting in Bydgoszcz, the northern Polish town that is home to Zachem.

"We urge the government of [Prime Minister] Donald Tusk and the treasury ministry [as the controlling shareholder in Ciech] to withdraw from this Zachem liquidation and further develop a concept for future production of chemical raw materials,” he added.

In mid-October, Ciech announced that as part of a wider restructuring of its group operations it would sell sections of the loss-making Zachem 75,000 tonne/year TDI business to German chemicals giant BASF.

The transaction is set to spell the end of Ciech's involvement in TDI, due to a non-competition obligation embedded in the deal.

The move has sparked demonstrations led by an action committee of union representatives, which in its latest statements has claimed up to 2,000 jobs could be lost directly and indirectly in Poland if the TDI plants are shut down.

However, analysts have backed the strategy of Ciech's management to close the TDI unit in favour of focusing on Ciech's core, higher margin soda ash business and pay down substantial debts.

($1 = €0.78)

By: Will Conroy
+44 20 8652 3214

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