Oltchim profits increase five fold

Chemical plant Oltchim Ramnicu Valcea saw its profit increase five times in the first half of the year as compared to the corresponding period of last year. The substantial leap has helped Oltchim’s total assets to outgrow the company’s debts.

Oltchim’s financial statements at the end of last year showed that the company could not have paid its debts even if it sold all of its assets.

The chemical plant logged net profit worth 340.9 billion ROL (10 million dollars) in the first six months of the year. In the year-ago period, the company’s profit amounted to 53.7 billion ROL (1.6 million dollars), but, eventually, the company finished the year in the red.

However, the plant’s general manager says this will not happen again in 2004. “The results have to keep up the pace posted in the first half of the year. I am convinced that the second half will be even better,” says Constantin Roibu, Oltchim’s general manager. The last time Oltchim managed to log full-year profit was in 2000.

Oltchim’s main problem in the past few years was the huge debt, triggered by retooling loans that it has failed to pay back. The effects of the last year’s investments are beginning to show, however, as the plant is now working at full capacity. Oltchim’s total debts amounted to more than 8,300 billion ROL (250 million dollars) at the end of June, most of them being in fact debts taken over by the State Assets Resolution Authority (AVAS) from the former AVAB.

The company’s shareholders last year endorsed the swap of Oltchim’s $100m debts to AVAB into shares, but the capital increase has not been operated yet, because several minority stockholders contested it in the court of law.

After the capital increase is completed, the State would consolidate its main shareholder position, coming to own more than 90% in Oltchim. The company is now controlled by the Ministry of Economy and Trade, which has recently taken over from the Privatisation Authority (APAPS) a 53% stake.

Some 75% of Oltchim’s output is destined to exports, and the company’s market is growing. “Our market is increasing and all of our products are selling well,” Constantin Roibu maintains.
vlad.nicolaescu@zf.ro