Clariant closes sunliquid® bioethanol plant in Romania
Following the development of the sunliquid® technology, Clariant had decided in 2017 to build its own commercial sunliquid® production plant in Podari. The plant started production of bioethanol in the second quarter of 2022. In July 2023, Clariant initiated a strategic review of options for the plant after it became clear that the plant had not met Clariant’s targeted operational parameters.
Clariant’s management has concluded that the continued ramp-up of the Podari plant, which would require significant additional investment, is not economically viable for Clariant given the ongoing losses. Following today’s announcement, the activities within the Biofuels & Derivatives Business Line that supported the development and ramp-up of the plant will be reduced. The expertise required to maintain the technology and fulfil existing contractual obligations will be retained.
“After careful consideration of all strategic options, we have decided to close the Podari plant. We will work closely with employee representatives in Romania and Germany to find solutions that are as socially acceptable as possible. For an innovation-driven company like Clariant, it is essential to make clear decisions when a project does not fulfil expectations and to implement our sustainable growth strategy even more consistently,” said Conrad Keijzer, Chief Executive Officer of Clariant.
Clariant has made a preliminary financial assessment of the impact of this closure, which is summarised in the table below. The company has concluded that restructuring costs and provisions related to the closure of the plant and downsizing of related activities of approximately CHF 60 — 90 million will be incurred in December 2023, impacting EBITDA. In addition, further effects totalling around CHF 110 million will be incurred at EBIT level. These include a non-cash impairment on the current asset value of the plant in Podari and other remaining assets.
These amounts will mainly be booked in December 2023 and will therefore be reflected in the full year 2023 results, which will be announced on 29 February 2024. Clariant expects a cash impact of around CHF 110 — 140 million for the full year 2024 related to the closure costs. Additional costs of CHF 10 — 15 million are expected for the full year 2024 to maintain the necessary expertise in connection with the technology licences.
Summary of the overall financial impact of the decision:
|Negative effects (in CHF million)
|60 – 90
|10 – 15
|EBIT (incl. EBITDA-effects)
|170 – 200
|10 – 15
|110 – 140
Clariant has taken into account the financial impact of today’s announcement to close the sunliquid® operations on the full-year EBITDA guidance, resulting in an expected reported EBITDA of CHF 570 — 600 million for the full year 2023 (previously CHF 650 — 700 million).