JOINT PRESS RELEASE
Warsaw, September 30, 2002 -- Basell and PKN ORLEN today signed an agreement to form a new polyolefins joint venture in Plock, Poland to produce and market polypropylene and polyethylene in Europe. This announcement follows the approval of the agreement by PKN ORLEN's Supervisory Board on Saturday.
The new company is expected to be established no later than January 2003. PKN ORLEN and Basell will put into the business initial contributions of equal value. The rest of the project will be financed on a project finance basis and without direct recourse to the shareholders in the JV. Therefore, neither party shall have to directly engage their own financial resources, which can in turn be used for the financing of other investment projects.
PKN ORLEN and Basell officials said the joint venture, which has not yet been named, will build new world-scale PP and PE plants to replace the majority of older existing assets. The new company intends to construct a 400 KT Spheripol process PP plant and a 320 KT Hostalen process high density PE plant to serve fast-expanding markets.
At start-up, the 50/50 joint venture will operate the 150 KT PE and 140 KT PP plants that PKN ORLEN is contributing into the new company. Feedstock will be supplied from PKN’s ethylene cracker; the cracker is not part of the joint venture but will be expanded to ensure sufficient ethylene and propylene when the two new plants start commercial production in early 2005.
"We recognise that the Central Europe polyolefins market is very important, and with PKN ORLEN as our partner we believe we will have the strongest presence possible there," said Kees Linse, Chief Operating Officer for Basell’s Value and Ideas Business and a member of the Basell Management Board. "This type of joint venture will be a win-win situation for both parties. Basell offers customer access, industry leading technology and operational experience; PKN in turn offers feedstock, local market know-how and a strategic geographical location."
Zbigniew Wrobel, President of PKN ORLEN, said that he considers this important project a cornerstone in PKN ORLEN’s petrochemical development programme. He commented, "Increased polyolefins production from world-scale plants integrated with an adjacent cracker, both of which are tailored to market conditions, and the opportunity to integrate with the world’s leading polyolefins player, are the driving forces of the project."
The transaction is subject to the finalisation of associated commercial agreements and is also subject to clearance from the Polish Office for Protection of Competition and Consumers and the securing of satisfactory financing.
About PKN ORLEN:
PKN ORLEN is one of the largest companies in Central Europe, with listings on the Warsaw and London Stock Exchanges and the OTC market in the United States. It is Poland’s largest petrochemical producer and refiner of crude oil and marketer of world-class petroleum and related products. It has a substantial wholesale and retail distribution system that includes the largest network of service stations in Poland. It also has significant financial investments in the telecommunications sectors in Poland.
About Basell:
Basell develops, produces and markets polypropylene, polyethylene, advanced polyolefin materials and polyolefin catalysts, and also develops and licenses polyolefin processes. Basell, including its joint ventures, serves customers in more than 120 countries with materials produced in 18 countries. Basell's corporate centre is located in Hoofddorp, The Netherlands; the company has regional offices in Wilmington, Delaware, USA; Brussels, Belgium; Mainz, Germany; Sao Paulo, Brazil, and Hong Kong, as well as manufacturing facilities and sales offices in the major markets around the globe.
For additional information contact:
- Krzysztof Rogala, Press Officer of PKN ORLEN at +48 605 199 598 or Krzysztof.Rogala@orlen.pl
Spheripol and Hostalen are trademarks owned or used by Basell. Hostalen is registered in the U.S Patent and Trademark Office.
