Construction

CIECH Soda Romania Wants to Resume Soda Production in the Medium Term

CIECH Soda Romania has received the environmental permit for building a new power plant in high-efficiency cogeneration, a new and important stage in the process of rebuilding chances for the company to resume soda production on the chemical platform.

Starting with September 2019, when CIECH Soda Romania was forced to suspend for a long term the production of soda ash (due to unilateral termination of the steam supply agreement by CET Govora, the only steam supplier in Valcea, which had successively increased the price of steam by 80% in a period of less than two years, way above the feasible level, which made maintaining the production to be fully unsustainable), the company based in Ramnicu Valcea, with the support of CIECH Group, has initiated numerous actions to lay the foundations of a possible restart of production.

As industrial steam is an indispensable element of soda ash production, the company has developed plans on the construction of a new CHP plant within its own premises, which could ensure in the medium term the quality and volume of industrial steam necessary within a production process that pays attention to environmental protection and which represents a starting point for the economic development of Valcea County.

According to the feasibility study, which the company completed in the fourth quarter of 2020, in a period of approximately 3 years a new CHP plant can be built on the land belonging to the factory, ensuring the foundations for restarting soda production in Valcea and contributing to the creation of almost 1,000 jobs in the county.

Also, when CIECH Soda Romania, SNS Salrom (one of the main suppliers of raw materials) and local maintenance services resume activity, an increase in the number of new jobs in the local economy of Valcea County will be ensured and the existing ones will be supported. (According to a EY report published on September 16, 2019, over 4,400 jobs were created in Romania’s economy in 2018 as a result of CIECH Soda Romania activities).

“Our studies show the possibility of reducing CO2 emissions by 275,000 tons in steam production compared to the volume of emissions generated by the former supplier, and this is encouraging in terms of continuing the development of plans. Of course, these aspects still depend on making final decisions by all stakeholders, i.e. investors and authorities, but today we are a step closer to the idea that we could resume the activity of production of soda ash, renewing the tradition of over 60 years of professional pride in Valcea,” said Witold Urbanowski, CEO of CIECH Soda Romania.

The activity of CIECH Soda Romania is currently reduced to 70 employees who are involved in the production of liquid sodium silicate, with the help of own low-pressure generator of industrial steam, in the preservation of the plant and in the activity support functions.

However, given the new financial resources available, especially the EU funds for economic recovery, as well as the commitments to reduce CO2 emissions assumed by Romania within the European Green Deal, a favourable context can be created to speed up decisions of building the new power plant.

CIECH Soda Romania was the last soda ash producer remaining in Romania, providing important raw materials for various domestic producers of glass, detergents, chemicals, and metallurgical products, representing a local and reliable source for the supply of soda ash. Resuming production will also help reduce imports of soda ash from Bulgaria and Turkey by approximately USD 30mln per year. As for contribution to the economy of Ramnicu Valcea city and of Romania through the payment of taxes, EY report also showed that each RON 1mln paid in the form of taxes attracted other RON 3mln to the state budget.

For the final investment decision, CIECH Group relies on an answer on the punctual local support regarding access to funds for completing the investment from financing lines ensured by the EU, the existing cogeneration bonus and links to the national power and gas transmission networks.

Moreover, building a new CHP plant requires attracting an external partner for CIECH, which will be responsible for building and maintaining a new source of industrial steam and, also, for financing the investment.

 

About CIECH

CIECH Group, the majority shareholders of CSR, is an international holding in the chemical industry, being present in over 100 countries and posting in 2018 revenues equivalent to USD 1bn. In 2014, the majority stake in CIECH was purchased by KI Chemistry, a company belonging to the largest private Polish investment fund, Kulczyk Investments.

CIECH Soda Romania S.A., a company within CIECH Group, has produced soda ash and sodium silicate until 2019. Since the takeover of Uzinele Sodice Govora, in 2016, CIECH has turned the factory on the industrial platform into a competitive company. In September 2019, the company entered a temporary stand-by due to unilateral termination of the agreement for steam supply by CET Govora, in the incapacity to provide steam at sustainable prices and quantities. Currently, the main soda production lines of the company are in stand-by for a long term, until the moment when the company develops its own plans for a sustainable steam supply source, a new CHP plant. The silicate production line remains operational and the production of liquid silicates will be resumed soon.

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