CIECH S.A.: Evaporated salt

Evaporated salt

The CIECH Group is the largest Polish producer of evaporated salt, with a share in the Polish market of approx. 60%.

Salt is usually present in the European market in two forms: rock salt and evaporated salt. Evaporated salt is one of the key products of the CIECH Group, which offers varieties intended, among others, for food, fodder, water treatment, and chemical industry.

In the last several years, salt production amounted to approximately 270 million tonnes per year. The ten biggest producers (countries) are responsible for over 3/4 of global supply. Among them are only two European countries (Germany, producing approximately 12 million tonnes per year and the UK, producing 7 million tonnes per year). Poland (producing approx. 4 million tonnes per year) came 15th in the global ranking, and its share in total production reaches 1.5%.

European salt production capacities are estimated at approximately 90 million tonnes per year (including producers using salt only for the purposes of their own chemical production, such as Solvay and Dow Chemical). The largest producer in Europe operating in the free market is Esco from the K+S Group, with capacities of more than 9 million tonnes per year and production plants in several countries of Western Europe. Other companies with large production capacities (above 5 million tonnes per year) include a Ukrainian company, Artyomsol (7.5 million tonnes per year; capacities used recently to a small extent) and a chemical concern, Akzo Nobel (6.6 million tonnes per year).

Due to advantages of evaporated salt with regards to quality parameters, chemical industry in Western Europe abandoned using of rock salt. A similar process occurred in food and households industries. Rock salt is presently used primarily in highway maintenance for winter de-icing. Evaporated salt, on the other hand, is widely used in chemical industry (electrolysis, detergent and dye production) as well as water treatment and softening. It is also used in food industry (including: baking, fruit and vegetable processing and meat industry). Evaporated salt of pharmacological purity grade is also used in pharmaceutical industry.

In Europe, most of salt is used in chlorine-alkali industry. Less salt is used for production of soda ash and in highway maintenance. Globally, use of salt in highway maintenance is significant only in North America (about 1/3). In other regions of the world, chlorine-alkali industry is the main buyer of salt. Also, soda branch (production of soda ash) in China is an important salt consumer. In Asia (outside China), Latin America, Africa and the Middle East salt is used in significant quantities for direct consumption and food production.

Polish salt market structure differs slightly from the one in Europe. Salt is used mostly in highway maintenance and for direct consumption, while less in chemical industry.

Poland belongs to leading salt producers in Europe. Total production of evaporated salt, rock salt and brine in the recent years oscillated between 4 and 4.5 million tonnes.

Polish salt market, like Europe, is mature. The amount of evaporated salt consumption remains on the stable level demonstrating resistance to the effects of economic slowdown. The increase of sales volume is small and results mostly from the increase of sales of highly processed salt products.

On the other hand, the market of rock salt used mainly for winter road maintenance is variable. The demand for rock salt in case of atmospheric anomalies can change by several dozen percent. The CIECH Group does not supply the highway sector with large quantities of salt and as a result, atmospheric anomalies practically do not influence sales volumes.

The CIECH Group plays an important role in the following segments: table salt (food industry and direct consumption use majority of total salt produced by CIECH Soda Polska S.A.); chemical industry and water treatment.

The CIECH Group with its production capacity of 620 thousand tonnes per year is the biggest producer of evaporated salt on the Polish market, with a market share of approximately 60%.

In the coming year, the directions and further development of the global salt market, estimated for about 270-280 million tonnes per year, will be determined by general economic development (because of important role of chemical industry in salt consumption) as well as seasonal factors (due to important role of salt in road maintenance in the developed countries). Development of plants in Asia (with regard to chlorine-alkali and soda ash) will be especially important for the chemical sector. The forecast global salt consumption rate should not be higher than in previous years, i.e. it will amount to 1%–2% on average per year.

Due to global economic, social or demographic trends, specialist products become more and more important in the salt industry. There is a growing awareness of the need to improve water quality – an increase in demand for salt tablets from many industries and from households is visible. In turn, increasing volumes of evaporated salt of pharmacological purity grade are used in pharmaceutical industry. Due to the development civilization diseases related to lifestyle in developed countries, expenditures on health care are growing. The quality of pharmaceuticals also improves, which determines the increase in consumption of salt used in this industry.

The prospects for evaporated salt market development in Europe, including Poland, are stable. The possible quantitative increases will depend on sales dynamics in the sector of highly processed products, e.g. for water treatment systems. Because of the dominating position of rock salt (used mainly in road maintenance) in the total salt market, sales of this type of salt will still be dependent on atmospheric conditions and can be subject to significant periodic fluctuations. Such events do not influence table salt segment and salt used for chemical industry.

There is a worldwide increase in demand for specialist products of the salt industry – salt tablets, salt used in the pharmaceutical and food industries.