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Romania: Oltchim starts negotiations to acquire Petrochemicals Arges

Oltchim Ramnicu Valcea will start negotiations on September 5 over the acquisition of Petrochemicals Arges, Romanian national daily Ziarul Financiar reported on August 27, cited by Interfax.

Petrochemicals Arges is the company comprising the petrochemical operations of Romanian oil firm Petrom’s Arpechim Pitesti refinery. Romanian chemicals manufacturer Oltchim Ramnicu Valcea, which receives its raw material from the Arpechim Pitesti refinery, said that if an agreement is reached, they plan to invest some €100 million in boosting the firm’s production capacity from 200,000 tons of ethylene a year to 300,000 tons a year, as well as in retooling the firm’s installations. “Retooling and boosting the production capacity of the pyrolysis installation is estimated to amount to €100 million, with the money to be provided through loans,” Oltchim CEO Constantin Roibu was quoted as saying.

Romania’s largest oil company, Petrom, majority-owned by Austria’s OMV, separated its petrochemical operations from its refinery operations in May 2007. Oltchim recorded 878 million leu (€266 million, $364.2 million) in revenues in the H1 of 2007, up 8% on the year (year-on-year), while it noted 9.6 million leu (€2.9 million, $3.97 million) net profits, up 32% year-on year. The company expects to record a total of €600 million ($821.3 million) in revenues for 2007 and achieve revenues of €800 million ($1,095 billion) in 2008, the newspaper reported. Roibu was cited as saying that Oltchim, which produces chemical fertilizers, is well positioned on the Eastern European market as the only producer of PVC and polyols in the region.

The CEO also said that the company could be ready for privatization by mid-2008 if the European Union accepts the proposal of the Romanian government regarding the annulment of the capital increase of 2003, through which the company’s debt to the State Asset Resolution Agency (AVAS) was converted into shares. (