Romania’s Govt Puts Oltchim Sale In Stand-By

"We have decided today to put the privatization process in stand-by. We do not have a market able to sustain such a process and we want the privatization to be developed in good conditions, so that we could guarantee the people’s jobs in the plant," Romania’s Prime Minister Calin Popescu Tariceanu said Wednesday, at the end of the Government meeting.

 

He added the Government will find other ways to sustain Oltchim, including state aids approved by the European Commission, so that the plant would be able to further function.

 

According to Tariceanu, the country’s privatization authority AVAS and the Finance Ministry must regulate certain commercial reports between Oltchim and Romania’s dominant oil company Petrom (SNP.RO), which is the plant’s main supplier of raw material.

 

Prior the Wednesday Government session, Tariceanu met Romania’s President Traian Basescu for talks at the Cotroceni Palace.

 

On Monday, Traian Basescu visited Oltchim and reassured the plant’s 550 employees that their jobs are not endangered.

 

Oltchim Ramnicu Valcea announced it will cut its activity by 20%-40% in November, following lower demand on the market driven by the international financial crisis.

 

State-owned Oltchim reported 1.67 billion lei (EUR1=RON3.8421) in revenue in the first nine months of the year, up 18% from RON1.414 billion in the similar period a year earlier, according to the plant’s financial report.

 

The company switched to a RON27.68 million loss in January-September, from a RON3.36 million net profit in the corresponding period a year before.

 

In the analyzed period, the company’s activity was affected by the latest price growth on crude oil that led to higher raw material prices and electricity tariffs, Oltchim announced early-November in a press release. 

 

Another negative factor that influenced the evolution of the company’s nine months results was the technical problems at Arpechim Pitesti refinery, the refining unit of Petrom, that led to a cease of production.

 

Romania’s privatization authority AVAS owns a 53.26% stake in state-owned Oltchim, followed by Germany’s Petro Carbo Chem (PCC), with a 12.9%, regional investment fund SIF Oltenia (SIF5.RO), with a 6.9% stake, and other shareholders.