Poli-Chem, which is based in Kędzierzyn — Koźle and is part of Blachownia Holding, has found itself in a very difficult situation. It is the second largest producer of polyethylene after PKN Orlen, however it is fighting on an uneven playing field. On 21 November, PKN Orlen reduced the price of ethylene, the main raw material used in the manufacture of polyethylene, by PLN400.
A fall in price is normally good news, however the only client for this product is the manufacturer, PKN Orlen, itself.
Poli-Chem now must try to get supplies at the same price. If not, Jacek John, MD of Poli-Chem, says the company will go bankrupt.
Poli-Chem is considering forwarding the matter to the competition watchdog Urząd Ochrony Konkurencji i Konsumentów. The company is seeking an answer if PKN Orlen is selling the product below cost price or if it has found a way of producing it much more cheaply.
Poli-Chem will begin shortly negotiations to lower the price form its main supplier, the Czech Litwinow refinery. In order to break even, ethylene needs to be sold around EUR300 per ton whilst Poli E Chem is currently paying EUR553. However Poli-Chem has outstanding debts of PLN4m and negotiating a new price in these circumstances will be difficult.
The best chance for the survival of Poli-Chem could be the entry of an investor such as Daw Chemicals, Mitsubishi or Du Pont.