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Supervisory Board of CIECH has adopted a Group strategy for 2014-2019

On 3rd November 2014, the Supervisory Board of CIECH adopted a resolution on the strategy of CIECH Chemical Group for the years 2014 – 2019. The document specifies the directions of development of the Group and the sources of growth in its value.

The main objective of this most profitable chemical company listed on the Warsaw Stock Exchange (according to EBITDA for the first half of this year) is to maximise the value of the Company while concentrating on the soda segment. In addition, the strategic objectives of CIECH Group include:

  • Increase of revenues in the soda segment,
  • Doubling the share in the Polish market of plant protection products,
  • Increase in normalised EBITDA,
  • Increase of the value of the Company.

The soda segment of CIECH has numerous competitive advantages, which the Company intends to maximise, such as geographical distribution of its production plants (Poland – Inowrocław, Janikowo, Germany – Stassfurt, Romania – Govora). It allows the Company to effectively reach out to existing European customers and provides a basis of expansion into new and attractive markets. In addition, the Company continues to hold its leading position in terms of soda production costs.

The organic segment of the Group will be developed on the basis of Organika-Sarzyna, which is still part of CIECH Chemical Group. The main products of Organika-Sarzyna include resins (polyester and epoxy resins) and plant protection chemicals ('Chwastox' brand). Organika-Sarzyna will be systematically developing its distribution channels in order to be able to reach out to its customers  more effectively. Its cost efficiency and capacity utilisation will also increase, and in response to customer needs, it plans to diversify its product offer and expand its research and development activities.

- In creating the new strategy, the Board of Directors of the Company attempted an extremely responsible and flexible attitude, taking into account all market circumstances and new opportunities for the Company which arose due to the change of its main shareholder. To a large extent, we intend to continue our efforts towards cost reduction, but at the same time, we would like to develop the basic segments of our business, namely soda and organic segments. With such an experienced investor, we would like to focus on a global development of our Company – said Dariusz Krawczyk, President of the Board of Directors of CIECH.

The strategy is to achieve the following financial objectives of CIECH Group:

  • Average annual sales revenue (2014 – 2019): app. PLN 3.8 billion,
  • Average normalised EBITDA (2014 – 2019): app. PLN 660 million,
  • Average normalised EBITDA margin (2014 – 2019): app. 17 %,
  • Net debt to EBITDA ratio of less than 1.00 in 2019. For the purpose of calculating the ratio, the estimated average annual dividend yield was determined at 3 %. The value of the dividend and its distribution will depend on the market situation and the financial position of CIECH Group.

- The investment in CIECH fits into the strategic development of Kulczyk Investments Group. We have many years of experience in transforming our companies into market leaders. Moreover, our international position enables us to unlock CIECH's potential and create a national champion, with success in global markets. This objective requires time and great consistency. Therefore, we treat this investment as strategic and long-term – said the Chairman of the Supervisory Board of CIECH, Dr Jan Kulczyk.

Additional information may be obtained from: Maciej Powroźnik, Spokesman for CIECH Chemical Group (maciej.powroznik@ciechgroup.com).

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