25 January 2013 15:57 [Source: ICIS news]
LONDON (ICIS)--Consolidation rather than privatisation is proving a successful way forward for Poland's remaining state-owned chemical industry assets, Poland's treasury ministry said on Friday.
Following unsuccessful attempts at selling off those assets in recent years, the Polish government last year green-lighted a plan to create an “EU major”, Grupa Azoty, by merging Zaklady Azoty Tarnow (ZAT) and Zaklady Azotowe Pulawy (ZAP), and two smaller chemical producers, Zaklady Chemiczne Police (ZChP) and fertilizer and oxo-alcohols maker Zaklady Azotowe Kedzierzyn (ZAK).
“We took a strategic decision to not sell these chemical companies, but to consolidate them into one group, and thanks to that consolidation the market capitalisation of ZAT and ZAP has already increased by 38%, or 1.7bn zloty ($543.1m, €405.7m)” said treasury minister Mikolaj Budzanowski.
“But we cannot stop there, for next we hope that the two boards [of ZAP and ZAT] will reach an agreement [to move forward effectively as Grupa Azoty], while there is the second task of establishing a new petrochemical complex in the north of Poland,” he added.
A feasibility study for the zloty (Zl) 6bn complex, to be located in Gdansk on the Baltic coast, is being conducted by ZAT and joint-venture partner Grupa Lotos, Poland's second largest refiner.
Budzanowski said the complex could be an important component in helping to cut the country's chemical and petrochemical foreign trade deficit, which stands at around €8bn.
Although there is an over-production of petrochemicals in Europe, the complex could be viable as a supplier to the Polish market if it used the latest, cost-effective technology and sourced cheap feedstock, according to Grupa Lotos.
That feedstock could theoretically result from Poland effectively exploiting its large shale gas reserves in coming years.
Poland's chemical companies have been urged by Budzanowski to explore the possibility of investing in shale gas exploration and production.
ZAP is among the Polish chemical companies that has agreed to take a look at the potential.
Grupa Azoty is set to be Europe's second largest producer of fertilizers, with nitrogen, multi-component and phosphorous fertilizers among its product portfolio, which will also include caprolactam (capro), polyamide 6 (nylon 6), melamine, titanium dioxide (TiO2) and oxo-alcohols.
($1 = €0.75, $1 = Zl 3.13, €1 = Zl 4.19)
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