Unipetrol plans to invest CZK 950m (US$43 m) this year into its Chemopetrol and Ceska Rafinerska units, to increase their production capacity according to Mr Kejdana, IR director of Unipetrol cited by Bloomberg yesterday.
Unipetrol will invest CZK 584m in Ceska Rafinerska to increase the refinery's effectiveness and to build a facility for mixing bio-fuels into gasoline and diesel. Moreover, CZK 366m investment is planned at Chemopetrol to build storage tanks for poly-olefins and to improve the capacity of Chemopetrol's polypropylene unit. The Company also mentioned it may potentially invest CZK 240m in 'diesel producer Paramo.
The relatively small investment is not enough for a larger scale upgrade, however, it might remove some technological bottlenecks. We see the news as neutral and reiterate our sell recommendation on petchem weighted Unipetrol due to our negative stance on margin environment in the following quarters of 2006.