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Boston, MA -- (SBWIRE) -- 04/10/2014 -- The Romanian petrochemicals industry is showing solid but not spectacular growth amid a steady recovery in export-oriented industries, but BMI's latest Romania Petrochemicals Report states that the key issue for the sector remains the future of Oltchim, the troubled chemicals manufacturer that the government hopes to privatise this year.
In the first 11 months of 2013, rubber and plastic output grew by 6.0% year-on-year (y-o-y) while chemicals output rose 8.9%, according to Romania's National Statistics Institute (INS). BMI estimates that the economy grew 2.6% in 2013 from 0.7% in 2012, indicating that the growth in petrochemicals was strongly pro-cyclical and matched the upswing in performance in export-oriented manufacturing sectors that consume petrochemicals.
BMI has revised the following forecasts:
- The focus of attention remains the troubled state-owned chemicals producer Oltchim, which filed for insolvency in January 2013. Having seen an attempt at selling off its controlling stake in the indebted company collapse at the end of 2012, and the company entered into insolvency by state officials in January 2013, the Romanian economy ministry is due in Q114 to attempt to select a viable bidder for a debt-free version of the firm named Oltchim II. BMI believes the political will exists to offload the lossmaking business and find a strategic buyer who will restructure the company.
- In terms of the domestic petrochemicals market, demand is strengthening, with end-use markets in Romania performing better than the overall economic trend. However, the construction sector, has grown below expectations and is unlikely to experience stronger growth over the medium-term, while the automotive industry has a more optimistic outlook due to its greater exposure to growing export markets.
- Romania ranks 13th in BMI's Europe Petrochemicals Risk/Reward Ratings (RRRs), scoring 45.1 points out of 100, up 0.3 point since the previous quarter due to an improvement in country risk. It lies 3.8 points behind Turkey and 3.4 points ahead of Ukraine. A successful divestment of struggling chemicals producer Oltchim and a resumption of full operations at the complex would boost the country's petrochemicals score, potentially leading to a rise in its ranking.
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