Prague, 29.4.2009– At its meeting today, the Supervisory Board of Unipetrol acknowledged the schedule for ending production of oxo alcohols in the subsidiary company Unipetrol RPA. Production has been restricted since the end of last year and steps leading towards complete shutdown will be taking place from the beginning of May. Definitive shutdown of operations is expected by 31 May 2009. The main reason for the decision to end production is the significant drop in demand caused by the global economic and financial crisis. Shutting down production of oxo alcohols will allow for more efficient use of the raw materials (especially propylene and hydrogen) in other production processes in Unipetrol RPA.
Production of oxo alcohols is not profitable under the current market conditions, demand and profit margins have been decreasing since last year. The Unipetrol RPA business unit, which has been in operation since 1969, uses out-dated technology, which is demanding on energy and raw materials. With a capacity of around 50 kt of oxo alcohols per year, it is one of the smallest in Europe. The limited validity of the integrated permit for production of oxo alcohols in Unipetrol RPA would require immediate investment of 20 to 30 million crowns. Costs for overall modernisation, which would ensure the plant’s ability to compete, have been enumerated at the level of hundreds of millions of crowns. "Production of oxo alcohols has been operating for more than 40 years. Analyses have shown that innovation potential has now been completely exhausted and significant investment would be necessary. The unit is not competitive from the point of view of raw material and energy consumption or in terms of capacity and the makeup of alcohols produced,” explains the director of the BUII Unipetrol RPA business unit Lubomír Lukáč.
The oxo alcohols n-butanol, i-butanol and 2-ethylhexanol produced in Unipetrol RPA are used as solvents for various oils, grease, waxes and resins. They are also used in the chemical industry as a raw material for further processing, e.g. during production of synthetic baked-on coatings, nitrocellulose lacquers, softening agents or synthetic rubbers.
Important customers of oxo alcohols were informed in advance about the possibility that production would end – supply contracts were concluded only until the middle of this year. Unipetrol RPA thus provided its customers with sufficient time to arrange delivery of these raw materials from other sources.
Shutdown of oxo alcohol production is part of the overall restructuring plan for Unipetrol RPA. This operation currently employs 25 workers.
Consideration has been given to closure of oxo alcohol production several times over the past decade due to the out-dated and environmentally problematic technology. The balance swung significantly in favour of keeping operations open after 2005 when two production units were closed in Germany. However, the economic parameters again worsened in the second half of last year when the impacts of the global financial crisis began to show.
UNIPETROL, a.s. is a group of companies operating in the petrochemical industry in the Czech Republic. In 2005 UNIPETROL became a part of the PKN ORLEN Group, the largest oil processor in Central Europe. The UNIPETROL Group is oriented mostly towards oil processing, fuel distribution and petrochemical production. In all of these business areas the UNIPETROL Group is among the key players both in the Czech Republic and on the Central European market. The Group ranks among the leading firms in the Czech Republic in terms of its revenues, and employs more than 4,000 people.
UNIPETROL RPA, s.r.o. is a leading Czech producer in the field of refinery, petrochemical and agrochemical raw materials, which is also reflected in the initial abbreviation “RPA”: refinery, petrochemistry, agrochemistry. The company supplies the market primarily with motor fuels, fuel oils, asphalts, liquefied petroleum products, oil hydrogenates, other refinery products, olefins and aromates, agrochemicals, alcohols, carbon black and sorbents, polyolefins (high-density polyethylene, polypropylene).
Contact:
Blanka Růžičková
Spokesperson
UNIPETROL, a. s.
Telephone: +420 225 001 407, +420 731 881 111
E-mail: blanka.ruzickova@unipetrol.cz