Poland’s Organika-Sarzyna can overcome loss of ECH supplier - bank

19 February 2013 16:09  [Source: ICIS news]

LONDON (ICIS)--Poland's Zaklady Chemiczne Organika-Sarzyna (Organika-Sarzyna) has the scope to continue with its production of epoxy resins despite the closure of its epichlorohydrin (ECH) feedstock supplier, a bank said on Tuesday.

Organika-Sarzyna would be able to overcome the loss of ECH from fellow Ciech group company Zaklady Chemiczne Zachem's (Zachem's) 30,000 tonne/year installation by turning to other suppliers on the open market, said Dominik Niszcz, an analyst at Raiffeisen Centrobank (RCB).

However, with Ciech currently assessing bidding interest in the company, the decision on the future of its resin production lines might be up to a new owner, he added.

“It is about 540 kilometres from Zachem [in Bydgoszcz, northern Poland] to Organika-Sarzyna [in Nowa Sarzyna, southeastern Poland] so ECH transport costs were already an issue here,” noted Niszcz, in determining whether the costs of transporting feedstock could rise substantially with the loss of the Zachem supplies.

State-controlled Ciech, the core business of which is soda ash production, bought Organika-Sarzyna from the Polish treasury ministry in December 2006.

Late last year, in a widening of its divestment strategy, Ciech earmarked Organika-Sarzyna, also a producer of polyester resins and plant protection chemicals, as a non-core subsidiary that it wished to sell to pay down debt. 

In the 12 months to the end of the second quarter of 2012, Organika-Sarzyna achieved sales revenues of zloty (Zl) 618m ($219.2m, €148m), Ciech said.

($1 = €0.75, $1 = Zl 3.14, €1 = Zl 4.19)

By: Will Conroy
+44 20 8652 3214

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