The restructuring of the petrochemical industry in Central Europe creates an opportunity for the firm to significantly strengthen its market position and increase growth. The board of Dwory S.A. has submitted documents confirming its willingness and ability to buy Kaucuk Kralupy, in reply to Unipetrol AS’s offer to sell the company. The takeover of Kaucuk Kralupy, a firm of similar size and production profile to Dwory S.A., would allow important synergy gains to be made. These would come from optimising organisation structures and production profiles, strengthening the importance of the joined-together firms.
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Dariusz Krawczyk |
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DARIUSZ KRAWCZYK
Chairman, Dwory S.A.
The chemical company Dwory S.A. is already 61. It is one of the largest chemical firms in Poland and the company has been listed on the Warsaw Stock Exchange from December 2004. Dwory S.A. is the only producer and also the leading seller of styrenes, synthetic rubbers and latexes in Poland, with an annual sales value exceeding USD 320 million. Export forms 42% of all product sales, and is mainly to European countries.
Dwory S.A. have the second largest production capacity in Europe in the area of rubber emulsions (e-SBR), and have the largest European production plant of this type. Synthetic rubbers are sold under the protected trade name of KER®. The largest sales of synthetic rubbers are made to automotive tyre manufacturers, mainly global concerns.
The company’s second strategic product is expandable polystyrene (Owipian®), the sole raw material for making styrofoam. Dwory S.A. is the fifth largest European producer of this product. Due to its demand and growth, the main market has up till now been domestic: Poland is the second largest consumer of this product in Europe.
Between 1997-2003, a difficult and costly restructuring process took place, reducing employment almost five-fold and modernising the technology and management processes to a level ensuring competitiveness of products and a high quality of service to clients. This has lead to productivity indicators approaching those of the best global firms. In addition, Dwory S.A. is one of the first chemical firms in Poland, which has fully resolved its impact on the environment, acting within a sustainable development strategy.
The company’s development strategy for the years 2003-2007 concentrates on three key areas of activity: synthetic rubbers and latexes, styrene based products and dispersions based on vinyl and copolymer resins.
The basic investments which are envisaged in the company’s strategic plan concern production: the security of raw material supplies and the widening of the scope of products offered to clients. The integration of material inputs is of particular importance, due to the unstable prices of crude oil and of petrochemical products. The current limited level of integration within Dwory S.A. will change significantly after production starts of ethyl benzene, an essential input in the production of styrene, which is in turn used in producing synthetic rubbers and polystyrenes. This investment will be undertaken as a joint venture with PKN Orlen S.A.
The restructuring of the petrochemical industry in Central Europe creates an opportunity for the firm to significantly strengthen its market position and increase growth. The board of Dwory S.A. has submitted documents confirming its willingness and ability to buy Kaucuk Kralupy, in reply to Unipetrol AS’s offer to sell the company. The takeover of Kaucuk Kralupy, a firm of similar size and production profile to Dwory S.A., would allow important synergy gains to be made. These would come from optimising organisation structures and production profiles, strengthening the importance of the joined-together firms.
In the next five years, the level of investment which the company will need to fund from its own sources is estimated at about 500 million zł. Additional investment will be essential if t
he takeover of Kaucuk Kralupy goes ahead.
Dwory S.A. is considering taking an active part in the process of obtaining energy from coal, due to the situation on the energy market and the need to partly free itself from dependence on crude oil. Based on an initial commercial and logistical analysis, Dwory SA together with Kompania
Węglową, are considering the possibility of initiating production of liquid fuels from coal on the company’s site. However, a detailed payback analysis must still be carried out, due to the fact that the investment would make a large demand on capital. In the face of rapidly rising oil prices, more and more countries are considering producing petrol from coal. Apart from South Africa, where such production is under way, other countries interested in this subject are China, Ukraine, Germany and the USA.
Dariusz Krawczyk
