Brzeg Dolny, Poland — High TDI prices, and more polyether polyols looking for a home, hit the profitability of PCC Rokita's polyurethane segment in Q3 2018.
Polyurethane sales were PLN 527m ($139 m) in the third quarter of 2018, up 8.8% on the 2017 quarter. EBITDA was down 30.5% to PLN 33.4m.
The company said the persistently high price of TDI had forced mattress and furniture producers to use polyurethane substitutes. This has helped to depress demand and prices for its high volume polyether polyols.
Additionally, the company reported that polyether polyol from Sadara was entering the market, and the economic crisis in Turkey reduced polyol demand there.
The company is responding to these problems by developing a number of speciality, very high molecular weight polyols, which have gone into production.
Furthermore, three unnamed clients were testing NOP polyols based on vegetable oils on an industrial scale, the company added.
Rokita said its polyether polyols business was increasingly successful in the reporting period.
It has gained a number of new customers and expanded its product range in the insulation segment. 'It is possible to compete with far cheaper solutions in construction,' the company said. Polyester polyols account for 3% of sales.
Overall, polyols account for around 46% of PCC Rokita's turnover and, despite the difficulties mentioned above, sales volumes in polyols have been similar to 2017. However, higher prices have led to an increase in the value of sales.
Looking strategically, Rokita confirmed that it has contracted for a further 25% stake in IRPC polyol in Thailand this April. It added: 'This is another milestone of the company running a business on fast growing Asian markets.'
It added that further investments on a new polyester polyol capacity are being considered and that in total it has invested PLN 20.5m in the first three quarters of 2018.
Overall for PCC Rokita, sales in the third quarter of 2018 were PLN 1.1bn. That is PLN 160m up on the 2017 quarter, an increase of just under 17%. EBIDA for the business as whole was PLN 239m, up PLN 16m or 40% on the 2017 quarter.
| Key Polyurethane segment numbers (PLN ,000) | |||
|---|---|---|---|
| Q3 2018 | Q3 2018 | Q3 2917 | change |
| Total sales revenues | 527,788 | 465,065 | 8.8% |
| EBITDA | 33,040 | 47,550 | -30.5% |
| EBITDA margin | 6.3% | 9.8% | -3.5% |
| Source: PCC Rokita | |||
