Romanian Daily

Amonil Puts 1.15 Mln USD In Amochim Share Capital Increase

IulianBulandra — 2006-07-18T07:23:00+00:00

Shareholders in fertilizers producer Amonil - Slobozia on Tuesday authorized the company's participation in the increase in the share capital of Amochim by 1.15 million USD equivalent in real estate assents owned by Amonil. Amochim is a producer of fertilizer-based chemicals.

Amonil shareholders also decided to set up an electrical and thermal power co-generation plant in order to reduce dependency on energy suppliers. Among others, Amonil produces nitrate-based fertilizers and exports most of the output. Its main shareholders are Romferchim and Eurotrading Chemicals with 28 percent each.

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Oltchim's sale, next year at the earliest

IulianBulandra — 2006-07-18T06:53:00+00:00

The privatisation process of the Oltchim plant cannot be initiated this year because it has to go through a series of legal steps, which will take a few months, said the company's general manager, Constantin Roibu. The Ministry of the Economy will sell 53% of Oltchim's shares, as well as the plant's debts to AVAS (The State Assets Resolution Authority) - 95.2 million dollars. "There are a few steps that need to be taken: the General Meeting of Shareholders (GM), for the annulment of the capital increase, which will take place in August, the publication of the GM decisions in the Official Gazette and the 30 days until the GM decisions come into force.

This already will take us to September 30," says Roibu. Solving the dispute with the minority shareholders in court, as well as re-registering AVAS as the company's creditor, in accordance with Oltchim's diminished capital are issues that will be finalised by November, added the company's manager. "Assuming everything goes smoothly and there are no motions to challenge our actions, this will still take until November, so I don't see how the privatisation process could start this year," says Oltchim's general manager.

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Total Lubrifin posts losses

IulianBulandra — 2006-07-18T06:52:00+00:00

Total Lubrifin, controlled by the fourth biggest petroleum group in the world - Total (France), saw losses worth 1.7 million euros (6.2 million RON) in 2005, the company's first operational year, according to data from the Official Gazette. Total entered a partnership with the lubricant manufacturer Lubrifin Brasov last year to set up Total Lubrifin, where the French hold a 51% stake. Total Lubrifin posted a turnover worth 5.8 million euros (20.9 million RON) in 2005. Company representatives could not be contacted by the time this issue was ready for print. Brasov-based Total Lubrifin is strategically located in the "heart" of Central and Eastern Europe and was created to contribute and boost the French giant's regional lubricant and grease business aimed at the automotive and industrial sectors.

Total Lubrifin sells products under brands of both partners, with a grease production facility set to be completed this year, an investment estimated at a few million euros, located close to Brasov.

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Carom Onesti assets on sale

IulianBulandra — 2006-07-14T09:07:00+00:00

The bidding organized by Finconta Consulting, the judicial liquidator of Carom Onesti, for the assets sale of the synthetic rubber producer, will start at 48 million euros.

Carom is being placed on sale for the recovery of bad debts amounting to roughly 308 million euros, about one-third of which are debts to the state budget. The task book will be released next week and the bidding should take place from August 21-25. Carom is the only synthetic rubber producer in Romania and the second largest company in the Onesti industrial platform, after the Rafo refinery.

Carom was privatized in June 2004, when 51 percent of its nominal capital was sold to the Tender Timisoara company for 5.5 million euros. In the meantime, Balkan Petroleum has become the majority stakeholder. One company interested in Carom is Calder-A, a company Balkan Petroleum already closed a contract with for the purchase of Rafo Onesti.

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Amonil Slobozia to lay off 28% of staff

IulianBulandra — 2006-07-14T08:52:00+00:00

Amonil Slobozia, a chemical fertiliser producer, will lay off 231 employees, following a decision made in the Extraordinary General Meeting of Shareholders. In the EGM that took place at the end of last week, a new organisational structure and a new organisational chart, which contains 650 posts against the current 831, were approved. The new organisational structure will come into force starting on September 1, and the collective layoffs will begin on August 11. The average number of employees stood at 943 at the end of last year, and reached 884 at the end of the first quarter of this year.

"Certain departments within the company will be eliminated. This also means fewer employees in management positions," said Victor Dobrescu, chairman of the Board of Directors. The shareholders also decided to change the employees' working schedule from five to four shifts.

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Amonil Puts 1.15 Mln USD In Amochim Share Capital Increase

IulianBulandra — 2006-07-05T08:42:00+00:00

GHCL envisages a turnover of USD 4 bn in 2 years

IulianBulandra — 2006-06-26T12:29:00+00:00

Sanjay Dalmia, Chairman, GHCL, is envisaging a turnover of around USD 4 billion in the next two years. He also expects the Romanian plants to give revenues around USD 119 mn by 07-08.

Moneycontrol's exclusive interview with Sanjay Dalmia, Chairman, GHCL Ltd.
Q: You are about to acquire a loss making synthetic soda ash unit in Romania next month for around USD 24 million. Why did you zero in on a loss-making unit?

A: The first unit, which we took in Romania, was also a marginally loss-making unit. We turned it around into a profit-making unit within six months. We have two units in Romania. The second unit (the current unit which we are looking at) is also making loss and this is run by government agency, so obviously it is not run very efficiently.
If we could turnaround the first unit then there is no reason why we will not be able to turnaround the second unit. So it is not going to be in loss for all the time to come. It will take maximum two-three quarters to turnaround. If you have two units in the same country then everything is much better. You do not have double overheads. Lot of expenses can be cut because you run two units in the same country.
We are in touch with two natural soda ash units in America. So it is not that we are only looking at loss-making units. We are looking at strategic units that can be made available to us, as we want to be in Europe and North America, which is basically in US. Ultimately we want to be in China. Our company will therefore be the only company in the world that has presence in all these four zones. That will give us a definite value addition.

Q: How much of growth are you seeing coming from the Romanian market?

A: These two plants are not just catering to the Romanian market. They are selling outside Romania as well. The demand in Europe is by and large balanced. There is a small shortage within Europe and I take Europe as one entity. We sell within Europe, partly in Romania and partly outside Romania.

Q: How much are you seeing coming from the European markets?

A: We will sell everything in the European market. We do not want to bring it to India, why should we pay so much freight.
These two plants, right now has capacity of 250,000-300,000 tonnes per year. By next year, these plants will be 700,000-750,000 tonnes per year. Today the soda ash prices are USD 170 per tonne. So, by FY07-08 these two plants will give us USD 119 million revenues.

Q: You are going to acquire Roseby's, UK, for USD 40 mn. What is happening on that front?

A: We have signed a MoU with them and we hope to acquire it. There are formalities, which we hope to complete by the end of July. It will be 100% owned and will become a GHCL subsidiary.
Roseby's present revenues are 115 million pounds, which is about USD 200 million. We would certainly like to increase it. You can say USD 200 million for the first year, which is ending March 2007. We have not drawn any expansion plans.

Q: Will this acquisition make you the third largest home textiles player in the world?

A: This will not make me the third largest but with this acquisition we will be the only company in the world, which will have spinning to retailing. There is no company in the world, which has everything from spinning to retailing. In two years time we will be the largest home textile player in the world.

Q: If you can tell me the turnover?

A: The kind of turnover that we are envisaging in the next two years which is 08-09 is USD 4 billion turnover.

Q: You are looking at other deals in France, Germany and Italy, so have any deals been fixed in these areas?

A: No we are still negotiating.

Q: These are the only three countries where you are looking at?

A: Out of these three, we are in the final stage of negotiation with France and Italy. In Germany we have to start the price negotiation. We want to have a similar retail chain in home textile in US.

Q: You have already acquired three big international companies in less than a year. So how are you managing to fund these acquisitions so frequently?

A: We had raised FCCB from September last year. So we are using part of that money plus internal generations.

Q: Going forward are you looking at any capex plans?

A: The second plant that we are buying in Romania, we are structuring it in such a way, that my cash outgo will be very small to start with, which means we will be paying as we earn. We are going to do a similar type of deals in some of the other countries.
Our cash requirement will be very minimal. But I know in France and Italy if it works out the way we want to structure it, our cash requirement will be very small. So funding is not a big problem.

Q: From here on, your global or domestic markets will drive your business?

A: We will be a dominant player both in textile and in soda ash. We will be totally global.

Q: So you are not looking at the domestic market at all?

A: No. India is part of the globe. We are not going to be a player just in the Indian market, but a global player that includes India as well. We have soda ash plant in India. But we are going to be a part of a global set up. Driving will be done from here but it will be a global company.

Q: From here on which of your businesses that is, soda business and textile, will drive your markets?

A: Right now soda ash is the biggest. Our textile business will give us USD 4 billion and from our soda ash business we will get 5 million tonne, or USD 1 billion. The soda ash figure does not include Dan River’s turnover. I am only talking about GHCL turnover. Out of USD 5 billion, 80% will be from textiles and 20% will be from soda ash.
Right now soda ash is bigger because home textiles have just started. This figure of USD 4 billion includes GHCL and its subsidiaries and will take 2 years from now, 2008-09 financial year.

Q: Which subsidiaries are you including?

A: I am talking about soda ash and home textiles. In soda ash it is in Romania, which is in America and in textiles it is Roseby, it will be Dan River plus any other acquisition.

Q. How do you see yourself against your peers?

A: In home textiles we will be the largest player and in soda ash globally we will be the second player in two years time. The biggest player in soda ash today is Solvay and we should be next to them.

By-Piyu Sen

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State gives up capital increase of Oltchim

IulianBulandra — 2006-06-21T12:58:00+00:00

The Ministry of Economy and Trade will give up the capital increase at Oltchim. The measure is necessary in order for the privatisation process of the company to be set in motion by the end of the year, according to an emergency draft ordinance published on the ministry's site. The publishing of the draft ordinance boosted Oltchim's shares on the Stock Exchange by 10% in Monday's session. By this emergency ordinance, the MEC would be authorised by the Government to revoke the decision of the Extraordinary General Meeting of Shareholders from November 2003, which approved the conversion into shares of receivables worth 95.

2 million dollars (some 76 million euros), which belonged to the former AVAB (Banking Assets Resolution Authority). By the transfer of these shares to AVAS and later to the MEC, the interest of the state in Oltchim's share capital rose from 53.2% to 95.7%. The move was contested in court by minority shareholders SIF Oltenia and the Lindsell investment fund, but the court has not so far delivered a definitive ruling.

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$100 mln in Carbon Black

IulianBulandra — 2006-06-02T09:38:00+00:00

Cabot Corporation Chemicals (U.S.A.) producer is planning to build a factory for the production of carbon black, said Deputy Prime Minister George Copos. The representatives of Capot Corp had a meeting at the Prefecture of the Prahova County Council (in Ploiesti city, 60 km from Bucuresti) to discuss the location of the production facility in the area, Bucharest Daily News reports.

The company would need for a 50 hectare land plot for the investment and has identified a spot corresponding to this specification in Arges County, where the necessary qualified personnel are also available, added the Romanian government representative.

Carbon black is a substance used by the auto industry for the production of tires, lacquers and dyes, as well as printing ink. The investment would be carried out in several stages, but the American company's officials say they are determined to establish the factory in Romania and not anywhere else.

Cabot Corporation has operations in 21 countries and employs approximately 4,400 people.

About 55 % of them work outside the United States, where the company has its headquarters.

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Oltchim privatization strategy announced

IulianBulandra — 2006-05-03T06:06:00+00:00

The investor which takes over Oltchim Ramnicu Valcea will have to pay company debts to the state budget and insure the complete payment of overdue installments relevant to external loans. The Ministry of Economy and Commerce (MEC) has established the stages for the privatization process of Oltchim and the recovery of company debts held by the Authority for the Recovery of State Assets (AVAS), to be presented to the government under the form of an emergency ordinance. In the first stage, a 2003 decision to convert a 95.2 million dollar debt into shares will be overruled. That decision has led to MEC holding a 95.7 percent stake in the company.

The overruling will lead to AVAS regaining the debt and partially collecting it through public auction sale of assets not involved in the production process. The remaining debt, up to 95.2 million dollars should be fully paid by the investor that acquires Oltchim. The privatization contract will also provide a commitment for the buyer, as a majority shareholder, to pay in full and on time the installments for external loans guaranteed by the state and payments phased until October 31, 2009. Debts related to external loans amount to 50.7 million dollars and are expected to increase by October 2009 to about 70 million dollars if Oltchim does not make its regular payments. Oltchim Ramnicu Valcea estimates a net profit of about 12.5 million euros for 2006, almost double the 2005 figure, and a turnover of approximately 500 million, up 23 percent from last year. Several companies, including Vienna Capital Partners investment fund and the main Polish oil company PKN Orlen have shown their interest in taking over Oltchim.

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