Unipetrol will announce a new group strategy in December that should include a polyolefins investment at Chemopetrol for several billion koruna and might involve acquisitions, the Czech company said on Tuesday.
Our view:
Unipetrol already announced that it plans to expand Chemopetrol's polypropylene capacity by 10% to 275 ktpa and its ethylene capacity by 12% to 544 ktpa. Before expanding ethylene/polimerization capacities further, Unipetrol should secure raw material (naphta) supply, which seems to us the biggest problem since minority owners of Ceska Rafinerska might not be interested in changing the product slate of the Litvinov refinery. If PKN plans to provide nafta from Plock, it could be fairly expensive feedstock for Chemopetrol. Regarding the potential acquisitions, we have no strong idea on the potential target of Unipetrol. We have a slight suspicion that it might eye MOL's petchem business. Overall, we consider to news as neutral to Unipetrol share price.