Donau Chemie's Hungary plant to capitalise on EU water directives

13 December 2012 16:26  [Source: ICIS news]

LONDON (ICIS)--Austria's Donau Chemie is on schedule to bring a water purification chemicals plant on stream in Hungary next April, to target customers in central and eastern Europe (CEE) under pressure to abide by the EU's Water Framework Directive by 2015, the company's CEO said on Thursday.

Evidence that some parts of CEE are, for instance, as much as 60-70% behind western Europe in the use of flocculating agents – which remove microscopic particles from industrial wastewater and other water – encouraged Donau Chemie that its €6.4m ($8.4m) ferric chloride/polyaluminium chloride (PAC) plant would encounter solid demand, CEO Franz Geiger added.

“There is no shortage of supply, but there is certainly growing demand,” Geiger said, adding that he thought there would be sufficient orders to bring the plant up to full capacity in about two years.

Donau Chemie already has extensive lists of potential customers for the output of the installation, which is under construction at the Kazincbarcika site of northern Hungary-based isocyanates and polyvinyl chloride (PVC) producer BorsodChem, he added.

“They are waiting to see the quality of the product, to ensure it is of the same quality as our output in Austria,” Geiger said.

The Kazincbarcika plant is to initially target output of 75,000 tonnes/year of ferric chloride and 30,000 tonnes/year of PAC.

The EU's Water Framework Directive 2000/60/EC established the Environmental Quality Standards Directive (EQSD). EU member states are required to take action to meet chemical status quality standards in the EQSD by 2015.

any water purification facilities in CEE are built with financial assistance from the EU, noted Geiger, adding: “Whoever puts the money on the table makes the rules.”

Donau Chemie is looking at selling around half the production output of the plant in Hungary and the rest within a 400km (250 mile) radius. Romania, Bulgaria and the east of Austria may possibly make good markets, the company said.

Getting close to potential customers is a key part of the business plan for the installation — the chemicals are not expensive, so cutting transport and logistics costs can make a meaningful impact on prices.

The production process makes use of hydrochloric acid by-product which results from BorsodChem’s toluene di-isocyanate (TDI) production lines.

Donau Chemie has established a “very professional” relationship with China's Wanhua Industrial Group – the owner of BorsodChem since early 2011, added Geiger.

“We have nothing to complain about,” he said.

Year on year, Donau Chemie had improved revenue and profit lines in 2012, and despite the volatility afflicting European economies Geiger expected 2013 to be “as good as this year has been”.

The fact that there is such a diverse mix of industrial customers for water purification chemicals offered some protection from economic downturns, with some sectors always pulling ahead while others struggled, the CEO said.

“We are carefully optimistic for the next year. We may not expect a bright future, but we are not expecting a dark future,” he added.

($1 = €0.76)

By: Will Conroy
+44 20 8652 3214

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