Orlen to reduce investments
Polski Koncern Naftowy Orlen is to reduce the amount it invests in the petrochemical sector. It originally planned to spend some USD1.1bn in the next five years but now has decided to reduce this by nearly half.
It would appear that funds are to be used in the modernisation of ethylene production facilities. It is also currently negotiating with three global concerns to set up a joint venture for the production of polypropene and polyethylene. A decision is expected by the beginning of next month.
Nonetheless the main reason for limiting investments is the net loss the company reported in the first quarter of this year which came to nearly PLN16m. In the same period of last year a profit of PLN132m was reported. This is bad news particularly as the petrochemical industry in general is complaining about the lack of availability of raw materials and the necessity of importing which consequently increases prices.
The economy ministry thinks that petrochemical production should be the basis for investments in the chemicals sector although it cannot decide if it is better to concentrate on fuels or petrochemicals.
The reduction of the investment programme could well be due to a lack of resources for the company. It has decided to get rid of some of its investments. Its stake in mobile phone operator Polkomtel was clearly a wise move but investing in Telewizja Familijna has been seriously questioned.
Poland has a USD5.2bn deficit in its foreign trade in the petrochemicals sector which generates some eleven percent of this country’s GDP.