13 June 2013 13:15 [Source: ICIS news]
LONDON (ICIS)--Poland's Ciech Group is right to consider the closure of its loss-making Romanian soda ash unit, Uzinele Sodice Govora Ciech, as there may be no viable way forward for the subsidiary, an investment bank said on Thursday.
“The closure of the Govora plant may prove to be the most reasonable option given the plant's high production costs, inflexible trade unions and the competition from Turkish soda producers, and the low probability of finding a buyer for such an asset,” said Piotr Drozd, a chemical industry analyst at WOOD & Company.
“The divestment from Govora would be an important step in the company's restructuring process and preparations for Ciech's privatisation,” he added.
Since the Polish treasury ministry – which controls Ciech, with a 38.7% stake – last year installed new management at the company in a fresh bid to address losses, Ciech has adopted a divestment policy that could lead to it selling all of its businesses apart from its soda ash production division in Poland.
Ciech took control of Govora in 2006, paying €9.2m ($12.3m).
It has since invested €40m in the plant, according to WOOD & Company.
Govora has a soda ash capacity of 430,000 tonnes/year, accounting for 19.5% of Ciech’s total soda ash capacity.
($1 = €0.75)
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