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HISTORY OF THE CIECH GROUP

 

Few companies in Poland have an equally rich history as the seventy-year history of CIECH, which clearly reflects the developments in the economy and industry of our country.

The Company was founded in 1945 as state-controlled "Centrala Importowo-Eksportowa Chemikalii i Aparatury Chemicznej" (Import-Export Centre for Chemicals and Chemical Instruments). From the very beginning, the company was exporting its products — soda ash, carbide and zinc white — to 12 countries.

 

The first registered office was located in Łódź. In 1946, after just one year, it was moved to Warsaw.

In the following years, the company continued its operations, exporting its products to an increasing number of global markets.

 

In the early 1960s, the company was renamed "Centrala Handlu Zagranicznego CIECH" (Foreign Trade Centre CIECH), in which "CIECH" was an abbreviation of the name "Centrala Importowo-Eksportowa Chemikaliów" (Import-Export Centre for Chemicals). 

 

The 1960s and 1970s brought the company successes on the sulphur market (when Polish "yellow gold" held the second place in the world in export of this raw material), nitrogenous fertilisers, pharmaceuticals, cosmetics, paints and varnishes.

 

In 1976, nearly 95% of Polish chemical products were sold on foreign markets through CHZ CIECH. 

At the turn of the 1980s, at the beginning of the political transformation, CIECH was the largest foreign trade centre, with a monopoly for the delivery of oil to Polish refineries.

 

In the 1990s, at the time when the centre celebrated its 45th anniversary, it held the 97th place in the top one hundred leading companies the world.

 

Poland's transition from a centrally planned economy to a free market economy entailed the loss of the monopoly for the delivery of oil. This coerced the company to transform into a modern and free market chemical company.

Therefore, in the 1990s, the company initiated the process of building a capital group, concentrating major national manufacturing sites around itself.

 

By the year 2000, CIECH S.A.  managed to group 8 renowned chemical manufacturers: Vitrosilicon (since 1991, currently: CIECH Vitrosilicon), Fosfory (in the Group in 1995-2011), Soda Mątwy and Janikosoda (since 1996, currently: CIECH Soda Polska), Boruta Kolor (in the Group in 1999-2008), Petrochemia Blachownia (in the Group in 1999-2006), Agrochem Dobre Miasto (in the Group in 1999-2011), and Alwernia (in the Group in 2000-2013).

These transformations were crowned by the company's entry to the Warsaw Stock Exchange in 2005, which proved a great success.

 

It provided the company with access to capital and means of implementing bold activation measures. 

 

As a result of the Company's listing on the stock exchange, its prestige increased, along with credibility and brand recognition.

One year later, the Company confirmed its position as one of the leaders of the European chemical industry by completing the purchase of the first foreign manufacturing subsidiary of the Group, a Romanian soda factory, US Govora (currently: CIECH Soda Romania).

 

ZCh Organika-Sarzyna (currently: CIECH Sarzyna) was also purchased in the same year. 

 

In 2007, the company also acquired a German soda manufacturer, Sodawerk Stassfurt (currently: CIECH Soda Deutschland), and fortified its position as the second soda manufacturer in Europe.  

The key period in the recent history of the Company are the years of economic downturn. In that period, the Company,mainly due to investing in currency options, which were popular at that time, lost its financial capacity for timely payment of of credits and found itself facing a real threat of bankruptcy.

 

In May 2012, the Supervisory Board appointed Dariusz Krawczyk as the President of the CIECH S.A. Management Board. The new president received the difficult task of saving the company. A quickly accepted and consistently implemented restructuring plan, based on three main priorities: the reversal of the negative trend in financial results, the restructuring of costs and organisation, as well as investment in new manufacturing capacities, took the company out of the profound crisis.

As a result of the actions taken, the Group regained profitability and began to recover its market value. 

 

This positive change was emphasized in 2014, when the company acquired a new majority shareholder, the international investment group Kulczyk Investments, with many years of experience in transforming companies into market leaders.

CIECH, as the first Polish company, will have its shares listed at the same time at the stock exchange both in Warsaw and Frankfurt (dual listing). The listing of the company’s shares at one of the most important stock exchanges is yet another step in the implementation of its strategy of expansion in international markets.

Further investments in the salt business (new warehouse, investment in new products - dishwasher salt and salt licks for breeding animals) and soda business (investment with a value of PLN 100 million in the production of sodium bicarbonate at plants in Germany).

The CIECH Group decides to commence the development of a salt works plant in Germany. In total, after launching the new production plant, the CIECH Group will produce 1 million tons of evaporated salt annualy and will become one of its largest producers in Europe.

 

CIECH acquires a Spanish supplier of crop protection products - Proplan. Owing to the acquisition, it gains access to the sales markets of southern Europe, a portfolio of active substances and possible expansion to South America, among others.

At the end of 2018 CIECH’s Supervisory Board has approved new Strategy for the Group for 2019-2021.

In accordance with the provisions and objectives of the CIECH Group Strategy for 2019-2021, under which CIECH is to become a diversified chemical holding company, the Management Board of CIECH S.A. adopted a plan to reorganise the Group. As part of its implementation, independent business entities were separated in the form of subsidiaries, operating in the following seven core areas: Soda, Salt, Agro, Resins, Silicates, Packaging and Foams. CIECH S.A. became a holding company responsible, among others, for defining the strategy of the Group and individual business units, as well as the standardisation and streamlining of the implemented support functions.

 

In June 2019, CIECH completed the construction of a production line for the manufacture of sodium bicarbonate at its plant in Germany - an investment resulting in an increase in production capacity by 50 thousand tonnes per year. This project allowed, among others for the production of pharmaceutical-grade sodium bicarbonate, including dialysis soda.

 

CIECH suspended the production of soda in one of its four soda plants - in Romania. The direct cause of this decision was the termination of the existing contract for the supply of process steam by the only available supplier of this raw material necessary for the production of soda, and the proposed higher price, preventing CIECH Soda Romania from running profitable operations.

Despite the global coronavirus pandemic, CIECH's production plants maintained production continuity, while preserving the highest safety standards for its employees, suppliers and customers. The implemented fixed cost reduction programme, which covered both the headquarters and subsidiaries, enabled the Group to improve the profitability of its businesses in the environment of slowing economic growth in Poland and in the world. In order to be able to face the challenges related to the outbreak of the COVID-19 pandemic, the CIECH Group commissioned the production of the highest quality protective masks in Bydgoszcz.

The German company - CIECH Saltz Deutschland - owned by the CIECH Group, signed a contract for the construction and assembly of facilities in a new evaporated salt plant, which was built a year later in Stassfurt, Germany. The value of the investment was approx. PLN 700 million, which makes it the largest one in the history of CIECH, and its scale - an increase in the Group's production by approx. PLN 450 thousand tonnes of evaporated salt per annum - is to make the group one of the largest producers of this raw material in Europe.

The CIECH Group joined the United Nations Global Compact, the world's largest initiative that brings together businesses operating for sustainable development

 

CIECH finalises a programme of strategic investments in the development of its production capacity in the salt and silicate businesses. A new CIECH evaporated salt plant in Stassfurt, Germany, starts its operations - one of the most modern facilities of this type on the continent. A new furnace for smelting glassy sodium silicate is commissioned at the CIECH Vitrosilicon production plant in Żary. The investment worth PLN 80 million increases the sodium silicate production capacity of the CIECH Group by approx. 30%, strengthening the Group’s position as the largest supplier of this raw material in Europe.

CIECH Sarzyna, the largest Polish manufacturer of plant protection products, implements the largest product portfolio development programme in its history - including the production of a new generation plant protection product Halvetic, based on the innovative BGT (“Better Glyphosate Technology”), allowing for the maintenance of the current effectiveness of its action, while reducing by half the dose of active substance per hectare, compared to the existing standards.

CIECH finalised a sale agreement for 100% of shares in CIECH Żywice, a manufacturer of epoxy and polyester resins, for PLN 160 million. The transaction allows CIECH to focus on the development of its core business lines.

The CIECH Group adopts its award-winning ESG Strategy – “Chemistry for a better world”. Its goals include reduction of carbon dioxide emissions by 33 percent by 2026, moving away from coal in production processes by 2033, and achieving climate neutrality by 2040.

 

CIECH summed up the implementation of its strategy for 2019-2021. The greatest achievements are the implementation of the largest investment programme in the history of the Group, worth nearly PLN 2 billion, financed from current operations, decentralisation and creation of independent business lines, while improving internal processes, improving the efficiency of production and logistics, including due to the digitisation and use of the latest technologies, as well as building a new organisational culture to support the development of employees.

 

The CIECH Group adopts a new strategy for 2022-2024. It assumes, among others, further increase of the potential to generate operating flows in order to pay dividends on a regular basis, the possibility of acquisitions within core businesses, as well as further transformation of the Group thanks to digitisation and innovation processes.

 

Opposing to the Russian aggression against Ukraine, the CIECH Group withdraws from operations on the Russian and Belarusian markets, breaking up all business contacts with entities from both these countries.

 

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