PEP Review 2001-10
The Olefins Industry in the New EU Member States: Profile And Competitive Assessment
Published: July 2003
On May 1, 2004, the European Union (EU) will add to its existing 15 member states another ten members to the east. With the exception of the islands Cyprus and Malta, these states are the core of what was the Soviet-dominated, communist East Bloc.
In the chemicals sector, these new members will add another four olefins complexes to the 51 already in the EU:
- PKN Orlen at Plock, Poland
- Chemopetrol at Litvinov, Czechia
- Slovnaft at Bratislava, Slovakia
- TVK at Tiszaujvaros, Hungary
PKN Orlen, Chemopetrol and TVK are competitive with their contemporaries in Western Europe, with PKN Orlen probably leading the pack. They have good access to competitively priced feedstocks, they have decent economies of scale and efficiencies, they are well integrated downstream, and they enjoy reasonable utility prices and low wage rates. Financially these companies do not have the solid balance sheets of those in the West, but they nonetheless have proven that they can raise capital for modern, new plants and for revamps.
Slovnaft, by contrast, is a small, aging operation. While not on its deathbed, without expansion and upgrading, it is hard to see that the operation will survive for the long term.