By David Reed, UT EditorKazincbarcika, Hungary-BorsodChem Rt, eastern Europe's major supplier of diisocyanates for polyurethane manufacture, boosted its operating profit over the first three quarters of 2005 by 56.7 percent, to HUF 12 600 million ($62.5 million) on sales up by 20.3 percent to HUF 128 400 million over the period. The company's operating profit for the nine months has already surpassed that of the whole of 2004's EBIT, a statement from the firm pointed out.And, the firm reported, its aniline capacity rose to 150 kilotonnes per annum (ktpa), while its new MDI (methylene diphenyl diisocyanate) plant started up in the third quarter, as planned."The new facilities to come on-stream in 2005, especially in its last quarter, secure our Company's continued 20 percent annual growth potential," said László Kovács, the firm's chief executive officer, in the prepared statement. "There's every chance that BorsodChem Group sales revenue will surpass $1 billion next year," he said, adding that, "expanding the new capacities and paralleling them with the old units improve economies of scale and labour productivity and reduce the risk of business interruptions."Exports account for the bulk of the firm's sales, depending on the individual products, with MDI exports amounting to 98.5 percent over the Q1-3 2005 period, while over 95.8 percent of sales of TDI were exported in the same three quarters. Overall BorsodChem gave its sales breakdown as: domestic and central/eastern Europe at 46.9 percent; western Europe at 48.5 percent, and other markets at 4.6 percent. Demand continues to prevail in the MDI market, the BorsodChem statement continued. Although there was a slight price correction in mid-summer-mainly due to temporarily stronger performance of substitute materials-current margins on MDI still generated above average profitability, the statement added. MDI now represents 17.7 percent of the firm's total sales, slightly ahead of the 16.7 percent represented by TDI, the results data showed. PVC resins, at 26.7 percent of total sales and other products, at 17.1 percent are the other main sales generators for the firm, based in northern Hungary.The situation with TDI was less rosy, however, with the market price "gradually eroding for several quarters due to slight oversupply position with a rock bottom in the third quarter," commented BorsodChem. The new TDI plant, pictured, came on stream in late-2001 and is now in full flow, producing 60 kilotonnes per annum of the valuable intermediate.The declining price trend for TDI turned around in September, "partly because of booming seasonal demand, partly due to TDI capacity shut downs in North-America," the firm said. Consequently, TDI list prices started to recover, although the full impact of this price correction on product margin will only be apparent in the fourth quarter, the firm added.In addition, BorsodChem said its TDI output rose 25.2 percent in the first three quarters of 2005 over the same period of the previous year as a result of the earlier capacity expansion and increased production availability due to a new maintenance policy.Summarising the pricing situation for the three main isocyanate types, BorsodChem reported:Crude MDI prices of €1578/t over the Q1-3 2004 period, €2288/t in Q3 and €2280/t over the Q1-3 2005 period; Pure MDI €1987/t over the Q1-3 2004 period, €2250/t in Q3, and €2232/t over the Q1-3 2005 period.TDI prices in the same periods were €1679/t, €1454/t and €1570/t, respectively, BorsodChem's data showed.The significant rise of sales prices, along with a 3.9-percent increase in sold volumes, saw sales revenues for MDI products rise by 50.3 percent, to HUF7605.1 million, BorsodChem reported. But TDI, again, was less exciting: despite a 23.4-percent rise in volumes sold, sales revenues increased by no more than 22.9 percent, to HUF3990.5 million, owing to falling sales prices, the firm said.The firm's other major businesses, PVC resins, PVC compounds, caustic soda, aniline, and finished and semi-finished plastic products, turned in more mixed results with sales revenues for Q1-3 2005 (percent change from Q1-3 2004) as follows: HUF34 317.4 million (12.0); HUF4231.1 million (-7.4); HUF4970.3 million (93.2); HUF9776.5 million (32.2) and HUF9121.6 million (-3.6), respectively."
