Switzerland-headed specialty chemical company Clariant AG has announced its decision to shut down its "sunliquid" bioethanol production in Podari, Romania, and to downsize related activities of the business line Biofuels & Derivatives in Germany (Straubing, Planegg, and Munich).
After developing the sunliquid cellulosic ethanol technology, Clariant decided in 2017 to establish its commercial sunliquid plant in Podari, Romania which began producing bioethanol in the second quarter of 2022.
In July 2023, Clariant started a strategic evaluation of the options for the plant after it became clear that the plant did not achieve Clariant’s targeted operational parameters.
Clariant management has concluded that, given continued losses, the economics of the plant in Podari cannot justify Clariant’s continuing to ramp up which would require significant additional capital expenditure.
Downsize Biofuels & Derivatives business
Following this announcement, activities within the business line Biofuels & Derivatives that supported the development and ramp-up of the plant will be downsized.
Required capabilities to maintain the technology and to fulfill existing contractual obligations will be kept.
After a careful review of all the strategic options, we have decided to close the Podari operation. We will work closely with employee representatives in Romania and Germany and are committed to finding solutions that are most socially responsible. For a company that focuses as much on innovation as we do, it is imperative to make firm decisions when a project does not fulfill expectations and to execute even more rigorously on our sustainable growth strategy, said Conrad Keijzer, CEO of Clariant.
Clariant has also completed a preliminary financial assessment of the impact of this closure and has concluded that restructuring costs and provisions relating to the closure and downsizing of approximately CHF 60 – 90 million, impacting EBITDA, will be incurred in December 2023.
In addition, further impacts of approximately CHF 110 million will be incurred at the EBIT level, including a non-cash impairment to the current asset value of the Podari plant and other remaining assets.
These amounts will mainly be booked in December 2023 and will therefore be reflected in the full year 2023 results, due to be announced on 29 February 29, 2024. Clariant anticipates a cash impact relating to the closure costs of approximately CHF 110 – 140 million in the full year 2024.
Additional costs of maintaining required capabilities relating to the technology licenses of CHF 10 – 15 million are anticipated in the full year 2024.
