Ciech

Szukaj
WCAG A A A

News

Summary of the CIECH Group's strategy for 2019-2021

The implementation of the largest investment programme in the history of the Group, with a value of nearly PLN 2 billion and financed from current operations, decentralisation and creation of independent business lines, while streamlining internal processes, improved efficiency of production and logistics, thanks to, among others, digitisation and the use of the latest technologies, as well as building a new organisational culture to support employee development – these are the key effects of the implementation of the CIECH Strategy for 2019-2021. Due to the effective transformation, today, the Group is prepared for dynamic growth in the perspective of the third decade of the 21st century.

 

- The effective transformation of the CIECH Group would not have been possible without a committed and professional team. Together, despite the coronavirus pandemic, economic and social crisis, rapid fluctuations in raw material prices and interrupted supply chains, we managed to build solid foundations for the further dynamic development of the group. I am pleased to see how we strengthened our financial foundations, increased the share of specialised products in our portfolio, enhanced our organisational culture, improved the efficiency and digitisation of our business and production processes, and simplified the organisational structure of the Group during these 1000 days. Both completed initiatives and those still underway will enable CIECH to consistently improve its competitiveness and accelerate its international expansion in the “new reality” – says Dawid Jakubowicz, President of the Management Board of CIECH S.A.

 

Building a stable financial foundation

The consistent implementation of the group’s strategy, which is today one of the leaders in the chemical industry in Central and Eastern Europe, enabled us to significantly improve our financial results, at the level of both generated EBITDA and cash flow, and to reduce our debt level. Compared to 2018, in 2021, CIECH's revenues increased by 3%, and normalised EBITDA by 18%. Consolidated cash flow from operating activities, reflecting the efficiency and ability of a business to generate cash, increased by more than 180% in the same period, and our consolidated net debt decreased by 22%. 

 

The largest investment programme in the history of CIECH was financed, in its entirety, from current cash flows. In 2019-2021, the Group's businesses generated approximately PLN 2 billion in cash, 90 percent of which were reinvested in the further development of the group, among others, in the construction of a modern evaporated salt plant in Germany for nearly PLN 700 million, expansion of production capacity in silicates for PLN 80 million, as well as expansion of the product portfolio to include pharmaceutical quality soda (used, among others, for dialysis) or new plant protection products (including the innovative Halvetic, a breakthrough in the global glyphosate market, complying with the assumptions of the European Green Deal). At the same time, CIECH S.A. was able to pay a dividend from the 2020 profit in the amount of PLN 160 million.

 

Apart from the improvement of liquidity ratios or a decrease in debt, the Group obtained financing in the amount of PLN 2.15 billion, which guarantees its further development. In times of rising inflationary pressure, fixed expenses remained under control, and the EBITDA margin went up to over 22% - from 18.5% in 2018.

 

Development of flagship businesses

In 2019-2021, CIECH managed to develop each of its flagship businesses. In the soda business, we observed an increase in the sodium bicarbonate (baking soda) production capacity (up to 200 thousand tonnes per year), the highest quality sodium bicarbonate – used in pharmacy and dialysis – was also included in our offer. The newly built evaporated salt plant will ultimately increase the Group's production capacity in this regard by 80%, and pharmaceutical-grade salt will soon appear in the product portfolio of CIECH. In both these businesses, technologies were introduced to improve production efficiency (including Advanced Process Control or our in-house R&D solutions), as well as systems to support sales and logistics.

 

The years 2019-2021 were also a period of dynamic development of the Agro business, the best proof of which is the increase in our market share (from 4.8% at the end of 2018 to 7.8% in 2021). This is notably the result of the implementation of the historically largest programme of development of our own products, including the marketing of an innovative technology for the production of plant protection chemicals based on glyphosate in line with the assumptions of the European Green Deal, as well as taking advantage of synergies resulting from the acquisition of Proplan – a Spanish supplier of plant protection products. The business growth was also possible due to the strengthening of our sales activities and the implementation of modern digital sales tools. Thanks to the successful foreign expansion, the share of our sales outside Poland in the Agro business increased from 20% in 2018 to approx. 40% in 2021.

 

In the Silicates business, the Group has strengthened its position as the largest supplier in Europe. Despite the pandemic, the Group planned and successfully implemented an investment, with a value of PLN 80 million, in a modern and energy-saving silicate smelting furnace. As a result, the production capacity of the Żary plant improved by over 30%.

 

The revenues of the Foam business increased to historically high levels, and the EBITDA increased x-fold compared to 2018. Numerous optimisations of business processes enabled the company to strengthen its position as a leading partner in the Polish furniture industry, among others, thanks to the use of modern technologies and the inclusion of new products in the offer. The share of CIECH Pianki in this competitive market reached approx. 25 percent. 

 

In the Packaging business, CIECH maintained its leading position on the domestic market for the production of candle lanterns, introduced numerous process improvements and began intensive activities to expand into new market areas, including specialised glass packaging.

 

Streamlining the organisation and care for sustainable development

One of the key elements of the implementation of the CIECH strategy for 2019-2021 was the reorganisation of the group's structure. The isolation of seven1 core business areas made it possible to significantly improve their functioning in terms of production and operational processes, and to enhance flexibility and develop the potential for expansion in the area of new products and markets. At the same time, CIECH S.A. has become a modern holding company responsible, among others, for determining the strategy of the Group and its individual businesses, as well as defining operating standards and creating and maintaining a high-quality organisational culture. An important element of the strategy was also a flexible approach to asset portfolio management, as symbolised by the successful sale transaction of CIECH Żywice for PLN 160 million, which allowed the group to focus on the development of its main business lines with the largest scale of operations and its significant position on the domestic (Packaging, Foams, Agro) and European (Soda, Salt, Silicates) markets.

 

CIECH was also prepared for the next phase of growth, this time in the digital environment, thanks to the digitisation of its processes - both at the sales (SalesForce in the soda business, SAP in salt, sales support and service systems in the Agro area) and the management level of the Group (Power BI). The Group's soda plants also began work on the implementation of modern technological solutions, together with the leaders of industrial automation (including Honeywell and Siemens). The S&OP (Sales and Operations Planning) system introduced in the Group ensures the proper level of supply of raw materials and smooth deliveries to customers).

 

The implementation of the ambitious strategy of the CIECH Group would not have been possible without building a committed team based on the new values of CIECH, namely: accountability, reliability, team and development. The creation of an organisational culture enabling the implementation of the Group's strategic goals was possible thanks to the launch of numerous HR initiatives (Competency Model, ABCD Model and Performance Management System), resulting in a high level of employee involvement and regularly measured by the level of the Pulse Check ratio.

 

Introduced in 2021, the ESG strategy defines eight commitments of CIECH, grouped into three pillars: Environmental, Social and Governance. The commitments include, among others, achieving climate neutrality in 2040, introducing the idea of a circular economy, promoting diversity, increasing the level of security or reporting in accordance with best market practices. CIECH's ESG strategy was recognised as the best in Poland in a competition organised by PWC, the Warsaw Stock Exchange and Nationale Nederlanden Towarzystwo Funduszy Inwestycyjnych.

 

Below you will find the video presenting main CIECH achievements in 2018-2021.

###IFRAME_5gtJGN5rUlo###

______________________________________

Currently, after the transaction for the sale of the Silicates business, there are six core business areas.

Do góry