Romania Petrochemicals Report Q2 2008

The privatisation of petrochemicals producer Oltchim Ramnicu Valcea and its proposed takeover of OMV subsidiary Petrom's petrochemical assets are likely to radically change the structure of Romania's petrochemical industry in 2008, according to this report.

Oltchim is divesting a number of non-core operations ahead of its planned acquisition of Petrochemical Arges, which was spun off by Petrom in Q407. Oltchim needs the acquisition to produce its own raw material for the company's activities, but will need a partner, as it does not have the funds for a complete buy-out. Oltchim is preparing to acquire Petrochemicals Arges in 2008; the Arpechim Pitesti refinery is its main supplier of raw material. Oltchim representatives maintain that in case an agreement is reached with Petrom on the takeover of Petrochemicals Arges, they would invest around EUR100mn to boost the firm's ethylene production capacity from 200,000tpa to 300,000tpa and to retool installations.

Petrom's parent company, OMV, has shown a willingness to sell off some of Petrom's assets. While it is not allowed to sell the Petrobrazi refinery, according to the terms of the privatisation deal under which OMV acquired Petrom, the Austrian firm is allowed to sell off Arpechim and its assets. Petrom executive Jeffrey Rinker told Ziarul Financiar that the creation of Petrochemical Arges was 'part of the modernisation process of Petrom and is in line with the international trends in the field, of separating petrochemical from refining operations. Moreover, the decision will allow the company's management to focus on the opportunities for developing this activity and for making it more efficient.' However, Olchim's take-over bid has been delayed due to the EUR23.5mn losses it recorded in 2007.

In BMI's Central and Eastern Europe Petrochemicals Business Environment matrix, Romania is in fifth place with 53.2 points, 2.4 points above the regional average and 2.9 points behind Czech Republic. BMI believes the country's score will steadily improve with the expansion of petrochemicals production capacity and improvements to the overall regulatory environment, which should support a positive business environment.

• Executive Summary
• SWOT Analysis
  • Romanian Petrochemicals Industry SWOT
  • Romanian Economic SWOT
  • Romanian Business Environment SWOT
• Global Market Overview:
  • Global Ethylene Capacities
  • Table: World Ethylene Production By Country, 000 Tonnes Capacity
  • Table: Relative Ethylene Production Economics (US$ Per Tonne Of Ethylene)
  • Polyvinyl Chloride (PVC)
  • Market Overview
  • Market Structure
  • Table: Romanian Petrochemicals Industry Cracker Capacity Data & Forecasts (000tpa)
  • European Overview
  • Regulation
  • Table: Key Elements Of REACH
• Production
  • Table: West European Ethylene And Derivatives Capacity And Production
  • Table: West European Aromatics Capacity And Production
  • Table: West European Propylene And Derivatives Capacity And Production
  • Romania Petrochemicals Business Environment
  • Table: Emerging Europe Petrochemical Rankings
  • Limits Of Potential Returns
  • Risks To Realisation Of Potential Returns
  • Industry Trends And Developments
  • Refining And Olefins
  • Polymers
  • Mergers And Acquisitions
  • Financial Results
• Industry Forecast Sce
  • Table: Romanian Petrochemicals Indicators
  • Economic Outlook
  • Table: Romania Economic Activity
• Company Monitor
  • SNP Petrom
  • Lukoil Romania SRL
  • Rompetrol
  • Oltchim
  • BMI Forecast Modelling
  • How We Generate Our Industry Forecasts
  • Petrochemicals Industry
  • Cross Checks