Spolchemie Vleugels Vienna 2010


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Spolchemie general manager, Francois Vleugels, presents his rescue strategy for the Czech epoxy resin producer. Presented this week at the Vienna Global Chemicals Conference organised by the World Refining Association.

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  • In the Czech Republic, northern from Prague, in the stony valey of lLbe/Elbe river, surrounded by the green hills lies Usti nad Labem. Here
  • Here the story begins in 1856. The company developed as the most important chemical firm in the Austro-Hungarian Empire. When Czechoslovak Republic was estableshed in 1918, moayt of the chemistry in the new state was linked with Spolchemie. After WW II Spllchemie became the state-owned company. Spolchemie has been a joint stock company again since early 90ies. Viachem Group is the majority owner.
  • Spolchemie Vleugels Vienna 2010

    1. 1. <ul><ul><ul><ul><ul><li>François Vleugels </li></ul></ul></ul></ul></ul><ul><li>CEO Spolchemie </li></ul>
    2. 2. Ústí nad Labem <ul><li>CENTRAL EUROPE </li></ul><ul><li>& Czech Republic </li></ul><ul><li>Geographical & logistic </li></ul><ul><li>advantaged position in Europe </li></ul><ul><li>More than century of tradition in chemical production </li></ul><ul><li>Skilled blue and white collars </li></ul><ul><li>Personnel costs advantage to the West Europe countries </li></ul><ul><li>All logistic infrastructure near Usti n.Labem plant (road, rail, water) </li></ul>
    3. 3. Spolchemie history <ul><li>1856 – Austro-Hungarian aristocracy grounded the company </li></ul><ul><li>1918 – heavy chemistry in Czechoslovakia concentrated in Spo l chemie </li></ul><ul><li>1945 – Nationalisation </li></ul><ul><li>1990 – Privatisation – joint stock company </li></ul>
    4. 4. IN SHORT <ul><li>750 employees </li></ul><ul><li>Turnover 2008 approx 200 million € </li></ul><ul><li>More than 90 % of Spolchemie’s production is sold outside the Czech Republic </li></ul><ul><li>Major European player in resins market for coatings and composites </li></ul><ul><li>Products </li></ul><ul><ul><li>Resins </li></ul></ul><ul><ul><li>Inorganic s </li></ul></ul><ul><ul><li>Specialties </li></ul></ul>RESPONSIBLE CARE
    5. 5. Focus : Mainly Europe & Global <ul><ul><li>Tradition </li></ul></ul><ul><ul><li>Market knowledge </li></ul></ul><ul><ul><li>Flexible and Dynamic </li></ul></ul><ul><ul><li>Strong position in epoxy resins </li></ul></ul><ul><ul><li>Strong industry segments </li></ul></ul><ul><ul><ul><li>Automotive </li></ul></ul></ul><ul><ul><ul><li>Construction </li></ul></ul></ul>
    6. 6. Focus: Technology <ul><li>2004 </li></ul><ul><li>Restarting of BPA plant </li></ul><ul><li>2005 </li></ul><ul><li>Epispol – latest technology for the production of liquid epoxy resin (license of DIC Japan) </li></ul><ul><li>New SER plant – all products designed for powder coatings </li></ul><ul><li>Construction of new unsatured polyesters and alkyds plant </li></ul><ul><li>2006 </li></ul><ul><li>Latest technology for the production of unsaturated polyester resins (cooperation with Reichhold US) </li></ul><ul><li>C onstruction of Epispol II production facility (startup in October 2007) </li></ul><ul><li>Start of production of new unsatured polyesters and alkyds plant </li></ul><ul><li>2007 </li></ul><ul><li>Start - up of a new capacity of glycerin based ECH </li></ul><ul><li>2011 -13 </li></ul><ul><li>Conversion of chlorine production into modern membrane technology </li></ul>
    7. 7. Focus: Technology Unique patented ECH process <ul><li>E NV IRONMENT </li></ul><ul><li>Production from renewable sources (Glycerin e ) </li></ul><ul><li>Contribution to sustainable development </li></ul><ul><li>Exceeding benchmarks of Best Available Techniques (BAT) </li></ul><ul><li>Unique process safety compare to propylene based technology </li></ul><ul><li>ECONOMY </li></ul><ul><li>P roduction of all wastes much lower than ECH-P ones </li></ul><ul><li>C onsumption of all utilities much lower than ECH-P ones </li></ul><ul><li>Turndown of 30% </li></ul>
    8. 8. Diverse portfolio <ul><li>Inorganics </li></ul><ul><ul><li>Chlorine </li></ul></ul><ul><ul><li>Potassium Hydroxide </li></ul></ul><ul><ul><li>Sodium Hydroxide </li></ul></ul><ul><ul><li>Sodium Hypochlorite, Hydrochloric Acid </li></ul></ul><ul><ul><li>Epichlorohydrin, Allylchloride, Perchloroethylene </li></ul></ul><ul><li>Specialities </li></ul><ul><ul><li>Synthetic Sapphire </li></ul></ul><ul><ul><li>Calcium Sulphate </li></ul></ul><ul><ul><li>Hydrofluoric Acid </li></ul></ul><ul><ul><li>Sodium Fluoride </li></ul></ul><ul><ul><li>Potassium Permanganate </li></ul></ul>Pharmaceutics Electronics Food and beverages Detergents Paper and celulose Construction etc.
    9. 9. <ul><li>In the end of 60’s PROPYLENE based technology development </li></ul><ul><li>1973 first propylene-based ECH plant start up </li></ul><ul><li>1999 start of the GLYCERIN based technology R&D </li></ul><ul><li>Patent application </li></ul><ul><li>2007 New plant start up </li></ul>Epoxy resins & Epichlorohydrine - core product s - unique technology
    10. 10. ECH: Core process parameters Specific consumption index
    11. 11. in summary <ul><li>GREEN TECHNOLOGY </li></ul><ul><ul><li>Technology of Epoxy resins based on Glycerine </li></ul></ul><ul><li>COST STABILITY </li></ul><ul><ul><li>Gycerine price not connected to crude oil and less fluctuating </li></ul></ul><ul><li>FLEXIBILITY </li></ul><ul><ul><li>Own strong R &D team works with customers to fully align the product with requirements </li></ul></ul><ul><li>CAPACITY </li></ul><ul><ul><li>Total production capacity increased </li></ul></ul>
    12. 12. crisis
    13. 13. Global crisis Customers hit - demand decreased Payment delays Return of investment jeopardized Cash crisis Payment to row material suppliers delayed Delivery problems QUICK RECOVERY ACTION NEEDED
    14. 14. <ul><li>Key services </li></ul><ul><li>Restructuring approach to address the current economic crisis </li></ul><ul><li>Operational improvements in Production and Supply Chain </li></ul><ul><li>Sales and marketing optimization </li></ul><ul><li>Product and asset portfolio optimization as well as support with the resulting divestments and/or investments. </li></ul><ul><li>Organizational efficiency improvements and leadership selection </li></ul><ul><li>Management control and execution of crisis plan </li></ul>
    15. 15. Chemical Solutions analy sis <ul><li>New plant </li></ul><ul><li>Unique technology </li></ul><ul><li>Skilled staff </li></ul><ul><li>Product portfolio </li></ul><ul><li>Tradition </li></ul><ul><li>Marketing practices </li></ul><ul><li>Company culture </li></ul><ul><li>Optimi z ation </li></ul><ul><li>staffing and HR </li></ul><ul><li>production process </li></ul><ul><li>supply chain </li></ul><ul><li>procurement </li></ul><ul><li>logistics </li></ul><ul><li>Co-production </li></ul>Cash Credibility loss S W O T
    16. 16. Conclusion for <ul><li>Cash problem being addressed – credibility addressed </li></ul><ul><li>Marketing focus Europe only – based on portfolio flexibility, and sales increase (=regain lost market share) </li></ul><ul><li>Processes and procedures optimized – significant efficiency increase </li></ul><ul><li>Co-operations – modern technology fully utilised </li></ul>SHORT -TERM RECOVERY PLAN WAS NEED ED T O OVERCOME CASH ISSUE S AND DRIVE GROWTH BASED ON ITS CORE STRENGHTS & MARKET OPPORTUNITIES
    17. 17. Recovery project <ul><li>STEP ONE - rescue </li></ul><ul><li>Stand-still agreement </li></ul><ul><li>Payment calendar </li></ul><ul><li>Recovery plan - agreed by shareholders and </li></ul><ul><li>banks </li></ul><ul><li>STEP TWO – savings more than 10mil € </li></ul><ul><li>Staff reduction </li></ul><ul><li>Redundant property sales </li></ul><ul><li>Process optimisation </li></ul><ul><li>STEP T HREE – revenue growth of 40mil € </li></ul><ul><li>Regain lost market share </li></ul><ul><li>Optimize channels to market </li></ul>
    18. 18. PROJECT OUTLINE <ul><li>SHORT DURATION </li></ul><ul><ul><li>8 weeks project duration from project kick-off to outcome acceptance </li></ul></ul><ul><li>PROFESSIONALS ONLY </li></ul><ul><ul><li>Team of experienced professionals in all area of Production, Maintenance, Supply Chain, Procurement, HR, Legal and Corporate Governance </li></ul></ul><ul><li>VERY SHORT PAYBACK </li></ul><ul><ul><li>Cost of project vs. benefits identified and verified with management resulted into a very short payback </li></ul></ul>
    19. 19. Spolchemie - bright future <ul><li>Slim, efficient and flexible mid-size company </li></ul><ul><li>Focused marketing – Europe region </li></ul><ul><li>Interesting portfolio – resins, glycerin/green technology, inorganics, specialties </li></ul><ul><li>Reliable partner and co-producer </li></ul>
    20. 20. Thank you <ul><ul><ul><ul><ul><li>François Vleugels </li></ul></ul></ul></ul></ul>
    21. 21. <ul><li>BACK UP SLIDES </li></ul>
    22. 22. ECH: Core process parameters Specific consumption index
    23. 23. Core process parameters Specific production index