The chemical industry in central and eastern Europe (CEE) and Russia has suffered more than most through the financial crisis. Many economies in the region have suffered negative GDP growth and some, such as Ukraine and more recently, Greece, are suffering near financial meltdown.
Prior to the crisis, bankers saw CEE as a fantastic place to invest. Newly-found political stability and high levels of economic growth made investing there seem like an obvious choice. So vast sums of money flowed in, fueling a property boom based on easy credit. When the banks pulled out, parts of the region were left high and dry.
There have been some unfortunate victims. Czech epoxy resin maker borrowed heavily and overexpanded, leaving it with insufficient funds to take it through the downturn.
But the company has good technology and great potential. Francois Vleugels spotted this and has brought the group back from the brink by negotiating with its banks and putting a turnaround plan in place.
The downturn also hit the privatisation of some big chunks of Poland's chemical sector. Europe's second largest soda ash producer, Ciech, has been put on hold whilst a refinancing deal is agreed with its banks. The prospect of success for the other companies for sale, however, is much brighter.
I have been covering the chemical industry in CEE for several years. You can read my insights at my blog. Visit www.icis.com/blogs/east-european-chemicals/
Image credit http://www.sxc.hu/browse.phtml?f=download&id=1196724