Poland's Ciech 'mulling sale of Romanian and German units'

26 April 2013 17:10  [Source: ICIS news]

LONDON (ICIS)--Ciech stands ready to sell or liquidate its Romanian and German soda ash operations if restructuring efforts do not sufficiently improve profitability, a source at the Polish company said on Friday.

The Romanian unit, Uzinele Sodice Govora Ciech, faces higher energy bills resulting from the insolvency and vastly reduced production of the largest Romanian chemical producer Oltchim, which is located in the same chemical complex in Ramnicu Valcea, southern Romania, the source added.

German unit Sodawerk Stassfurt Deutschland Ciech must tackle issues including the repurchase of a gas-powered heat and power plant, and renegotiating gas prices, the source said.

Ciech’s restructuring process, including the shutting down of its Zachem TDI unit following the sale of assets to German rival BASF, and the restructuring of the group’s financing, pointed to continued management focus on the company’s core business, investment bank Wood & Company said in a note to investors.

“In this context, the readiness to take more bold steps seems positive in light of the difficult situation at the company’s foreign units,” the investment bank added.

In March 2011, Ciech was seen by analysts to be backing away from a possible sale of US Govora Ciech after the threat of competition from Turkish companies producing trona-based natural soda receded when output was directed at markets in the Middle East and Asia.

US Govora Ciech’s soda ash production capacity is 430,000 tonnes/year, while the soda ash capacity of Sodawerk Stassfurt is 580,000 tonnes/year.

Ciech’s soda ash capacity in Poland is 1.2m tonnes/year.

By: Will Conroy
+44 20 8652 3214

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