March 2011 Archives

It's refreshing to see that money is being invested in updating and expanding chemicals in Poland. So much news coming out of this country concerns the failed privatization process. ICIS news reports that Poland's Zaklady Azoty Tarnow (ZAT) group will spend up to Zl 300m ($106m, €74.4m) on investments in 2011 with a possible expansion of its polyamide 6 capacity to follow an increase in caprolactam output.

ZAT, which has already committed to boosting its caprolactam capacity to 101,000 tonnes/year from its current 86,000 tonnes/year by the end of 2011, added that it also intends to build a new hydrogen installation.

Currently ZAT and newly-acquired German subsidiary ATT Polymers have a polyamide 6 production capacity of approximately 46,000 tonnes/year each.

ZAT made the investment announcement while reporting its latest financial results.

Picture credit http://www.sxc.hu/browse.phtml?f=download&id=1022193

Within the past few days the CEO of Hungary's BorsodChem has restated his intention to sell or joint-venture out the company's 365,000 tonne/year PVC operation. Poland's PKN Orlen is also seeking a buyer for subsidiary Anwil, which has a 435,000 tonne/year PVC plant as well as a nitrogen fertilizer business.

I sniff an opportunity here for a strategic move into the region by a multinational or even a regional player seeking to increase market share here. The longer term outlook is bright for PVC in CEE as it serves the construction sector which should enjoy good rates of growth once again as the recovery takes hold. 

According to ICIS news, Hungary's BorsodChem has guaranteed that its 365,000 tonne/year polyvinyl chloride (PVC) plant will not be closed even if the search for a buyer or joint-venture partner for the facility proves fruitless.

The PVC unit will remain an important part of BorsodChem's production chain because it recycles hydrochloric acid, a byproduct of the company's manufacturing of isocyanates in Kazincbarcika, northern Hungary, CEO Wolfgang Buchele said.

"BorsodChem never had, and also today does not have, an intention to close down PVC. BorsodChem does not necessarily have to own PVC by itself. However, PVC is in any case valuable due to the synergy with the isocyanate production," he added.

In June last year, BorsodChem widened its attempt at finding an investment solution for its PVC business by inviting not just potential buyers but possible joint-venture partners to take a look at the plant. Since February, BorsodChem has been owned by China's Wanhua Industrial Group.

Picture credit http://www.sxc.hu/photo/1311426

A new report by data group Frost & Sullivan suggests construction chemicals suppliers should encounter buoyant markets in central and eastern Europe (CEE) and in the Commonwealth of Independent States (CIS) for several years ahead.

COnstruction took a massive hit in CEE during the downturn with many projects grinding to a halt or never breaking ground as financing collapsed. With confidence returning it could be that banks are lending again, and growth returning to the sector. 

Analysts at Frost & Sullivan said revenues from the CEE and CIS (excluding Russia) construction chemicals and building materials market should grow from approximately zloty (Zl) 5.9bn ($2.1bn, €1.5bn) in 2010 to around Zl7.7bn in 2017, according to an ICIS report.

The consultancy said drivers for the market would include EU energy saving directives, which would boost the foam insulation materials market for many years to come, and the infrastructure building requirements for the Euro 2012 UEFA European Football Championship, which is to be held in Poland and Ukraine.

Poland alone currently accounts for roughly one third of the market's revenues, Frost & Sullivan said. Looking solely at the CEE, Frost & Sullivan described the region's construction chemicals and building materials sector as "highly competitive" with domestic companies accounting for around one fifth of accrued revenues, with international suppliers accounting for the remaining four fifths.