Vinyls Italia buyer to up two sites' chlorine, PVC capacity:union
Madrid (Platts)--21Jan2011/747 am EST/1247 GMT
Gita Holdings, the Swiss-based fund that has agreed to buy polyvinyl
chloride producer Vinyls Italia, plans to increase production capacities and
modernize facilities at two of the Italian company's sites, a union official
Gita will invest at least Eur300 million ($406 million) to increase
combined PVC capacity at Porto Marghera and Porto Torres to 475,000 mt/year
with chlorine capacity rising to 360,000 mt/year, caustic soda capacity to
395,000 mt/year and ethylene dichloride capacity to 500,000 mt/year in the
next six years, Gianluca Bianco, spokesman for Federazione Energia Moda
Chimica union said in a telephone interview.
The Swiss fund has agreed to buy and restart Vinyls Italia assets at
Porto Marghera, Porto Torres and Ravenna, all of which were halted in May 2009
as the company went into liquidation. The assets are owned by Italian oil
major Eni and its chemical subsidiary Syndial. Gita, which will form an
Italian-based company to manage the operation, could not be reached for
"We are cautiously optimistic," Bianco said, adding: "It won't be easy to
get the plants running again and it will require some tens of millions of
investment, but Gita has shown itself prepared to do so." Bianco and other
union heads met with Gita representatives for the first time Thursday.
Gita signed a memorandum of understanding with Italy's Economic
Development Ministry to present a final bid for the assets on February 15,
with the closing due for March 10.
Other PVC market sources have voiced doubts about the functionality of
the plants after such a long break. The main concerns regard corrosion of
vital machinery but there are also doubts about the economic viability of the
While some "conservative maintenance" was carried out last year, the
plants have been otherwise fully closed, Bianco said. He added that Gita had
declared itself committed to a full modernization of the chlorine cycle as a
way of improving economic efficiency.
The company is targeting an increased PVC production capacity of 475,000
mt/year at the two sites, up from an existing capacity of 265,000 mt/year. it
will also modernize the chlor-alkali plant at Porto Marghera to more efficient
and EU-compliant membrane technology, at the time increasing output to 160,000
mt/year from 140,000 mt /year. It also intends to increase vinyl chloride
monomer production at Porto Torres. No modernization plans for Ravenna were
"The idea is to balance out the capacity for the PVC, so there are no
shortages," Bianco said. Chlorine are ethylene are the basic feedstocks for
PVC, which is made via intermediates EDC and VCM. Caustic soda, used by the
aluminium and paper industry is a by-product of chlorine extraction from
The company and unions have a timetable of between two and four months
for restarting production at the sites. Production of PVC and other
petrochemicals would be adjusted to market needs, Bianco said.
With the construction sector at a low ebb due to the economic cycle as
well as the seasonal winter downturn, PVC producers have been looking to
increase prices this month to stave off negative margins caused by large
contract price increases for ethylene.
PVC was assessed Wednesday at $990/mt-$1,010/mt FOB NWE.
--Luca Baratti, firstname.lastname@example.org
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