The EBRD is lending €3 million to SK Eurochem, Poland’s leading producer of Polyethylene Terephthalate (PET), to help the company adjust to new market conditions.
PET is an advanced form of polyester used to produce bottles and other packaging materials mainly for beverage and food processing industries. SK Eurochem is producing about 130,000 tones of PET annually, exporting 60 per cent of its production in neighbouring countries.
In the wake of the financial crisis, the competition in the Polish PET segment has weakened considerably, with SK Eurochem becoming the main producer of PET in the country. Responding to the supply gap on its local market, the company plans to expand the volume of PET sold in Poland, replacing current export sales.
The EBRD loan will finance SK Eurochem’s working capital needed to provide longer-terms of payment required by Polish clients. In addition the EBRD funds will help the company diversify its sources of competitively-priced raw materials in order to ensure the continuity of production process.
“This is an important project for the development of the chemical sector in Poland. We are pleased to continue the collaboration with SK Eurochem, supporting the company in the more challenging business environment”, said Lucyna Stanczak, EBRD Director for Poland.
“We truly appreciate the EBRD’s support in the view of the financial crisis. The transaction is a good opportunity to understand the role EBRD plays in the region. These funds will help us to ensure the continuity of production as well as improve our profitability by diversifying the source raw material,” added Kyong Yong Song, the President of SK Eurochem.
SK Eurochem was establshed in 2002 by SK Chemical, second largest chemical producer in Korea, and Anwil, one of Poland’s leading producers of fertilisers. Previously the EBRD has supported the company by providing a senior loan of €13 million. In addition, EBRD currently holds a 8.7 per cent stake in the company.
Since the beginning of its operations in Poland, the EBRD has committed over €3.9 billion across 200 projects in various sectors of the country’s economy.