PKN Orlen signed a contract of partnership with Dwory to set up an enterprise named Ethylobenzen Plock. The initial capital of Ethylobenzen Plock amounts to PLN 12m; and PKN Orlen has 51% share in the initial capital of the company for PLN 6.12m (US$ 2m).
Our view: Ethylobenzen Plock will produce ethylbenzene, the raw material of styrene production. Thus, we consider the news as a step by PKN Orlen group to increase vertical integration of its polystyrene product chain. Although the move could be strategically important, until PKN doesn’t reveal its exact plans on it we do not expect any market reaction to the news.