Oltchim seeks 25m euros from investment funds

Chemical complex Oltchim Ramnicu Valcea wants to raise more than 25 million euros from investment funds in order to lift its production capacity on the construction materials segment and finance an investment in chemical product production.

Oltchim is planning to set up joint ventures with the investment funds it hopes to bring into its business.

The company is looking to produce polyvinylchloride (PVC) profiles for use in thermopane windows and the thermo-insulating panels produced by Oltchim, as well as for construction materials and polyesters used in producing PET bottles.

“The amount we need to raise our production capacity for PVC profiles is 12 million euros, plus 3.5 million euros for Oltpan-type thermo-insulating panels and 10 million euros for polyesters,” said Constantin Roibu, general manager of Oltchim.

He said a number of investment funds had expressed interest in the investment, but was unwilling to reveal their names.

The investment would see the company”s PVC profile production capacity rise fivefold to 20,000 tonnes per year and its thermo-insulating panel capacity rise almost sevenfold to 2 million square metres. At the same time, Oltchim plans to found a company to manufacture polyesters.

The three joint ventures would secure sales for part of Oltchim”s production.

PVC is the main product of the chemical complex.

The company recently tried to expand vertically by manufacturing a number of high-added-value PVC-based products, and any further investment would represent a continuation of this strategy.

Last year, the plant managed to boost its sales significantly to 339 million euros, almost 60% higher compared with 2003.

The company began this year with good results, boosting its first-quarter profits by almost 250%. Turnover was 16% up on the corresponding period of last year.

Privatisation of the company is scheduled to begin during the second half of the year after a settlement is reached in the dispute between minority shareholders as to the conversion into shares of the debts of the State Asset Resolution Agency.

On the stock exchange Oltchim was among the few listings not to have experienced gains over recent weeks amid the rising results reported after the first quarter.

Oltchim”s share price increased beyond 3,000 ROL this week, giving the company a stock market capitalisation of almost 300 million euros. vlad.nicolaescu@zf.ro