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The Warsaw Voice » Business » December 2, 2009
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EBRD Loan for Chemical Producer
December 2, 2009 By L.Ż.    
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The European Bank for Reconstruction and Development (EBRD) is lending 3 million euros to SK Eurochem, Poland's leading producer of polyethylene terephthalate (PET), to help the company adjust to new market conditions. PET is an advanced form of polyester used to produce bottles and other packaging materials mainly for the beverage and food processing industries. SK Eurochem produces about 130,000 tons of PET annually in its factory in Włocławek, Kujawy-Pomerania province, exporting 60 percent of its output to neighboring countries.

In the wake of the financial crisis, competition in the Polish PET segment has weakened considerably, with SK Eurochem becoming the main producer of PET in the country. Responding to a supply gap on its local market, the company plans to expand the volume of PET sold in Poland, replacing current export sales.

The EBRD loan will finance SK Eurochem's working capital needed to cope with longer terms of payment required by Polish customers. In addition, the EBRD funds will help the company diversify its sources of raw materials in order to ensure the continuity of production.

"This is an important project for the development of the chemical sector in Poland," said Lucyna Stańczak, EBRD director for Poland. "We are pleased to continue the collaboration with SK Eurochem, supporting the company in the more challenging business environment."

Kyong Yong Song, president of SK Eurochem, said, "We truly appreciate the EBRD's support in the view of the financial crisis. The transaction is a good opportunity to understand the role the EBRD plays in the region. These funds will help us ensure the continuity of production as well as improve our profitability by diversifying the sources of raw material."

SK Eurochem was established in 2002 by SK Chemical, the second largest chemical producer in South Korea, and Anwil, one of Poland's leading producers of fertilizers. Previously, the EBRD supported the company by providing a loan of 13 million euros. In addition, the EBRD currently holds a 8.7-percent stake in the company.

The EBRD has committed over 3.9 billion euros across 200 projects in various sectors of the Polish economy.
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