Poland's chems, ferts producers face contrasting fortunes - bank

07 February 2013 14:49  [Source: ICIS news]

LONDON (ICIS)--Poland's industrial chemical producers face falling demand and narrowing sales margins in 2013 but the country's fertilizer producers should fare much better thanks to high grain prices, Polish bank PKO Bank Polski said on Thursday.

Synthetic rubber maker Synthos would face the toughest challenge to its profitability this year with demand for its products hit by a pronounced decline in the automotive and tyre-making industries, it added.

“We believe that an influx of weak economic data in the coming months of the year and continued high pricing of raw materials used in chemicals production will result in a decline in demand for chemical products and narrowing margins on sales,” PKO Bank Polski said in a forecast for 2013.

In Poland, manufacturers of industrial chemical products were most exposed to Europe's economic fragility with notable production squeezes in the construction, packaging and automotive industries, among many others, caused by the reduced purchasing power of consumers, it added.

Farmers, however, were experiencing increased purchasing power because of high world crop prices and this should help Poland's fertilizer producers go some way towards achieving stable profits compared to 2012, which was a record year for fertilizer companies, the bank said.

“However, despite the reduction in the industrial gas tariff [of 3.3%] compared to 2012, and a slight [upwards] adjustment in prices, the fertilizer producers will not improve on last year's results,” it added.

With no sign of an improvement in the outlook for the automotive sector, it was logical to anticipate a marked deterioration in the profits of Synthos, PKO Bank Polski also noted.

New sales made possible by Synthos' launch of an 80,000 tonne/year plant that uses with Nd catalyst technology to produce high performance neodymium-polybutadiene rubber (Nd-PBR) might ameliorate the decline, it added.

By: Will Conroy
+44 20 8652 3214

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