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"Chimcomplex has a strategic mission - to build a strong and integrated regional chemical company"

MIHAI GONGOROI (TRANSLATED BY COSMIN GHIDOVEANU)
English Section /

"Chimcomplex has a strategic mission - to build a strong and integrated regional chemical company"

(Interview with Tivadar Runtag, CEO of Chimcomplex Borzeşti)

"Our investments are focusing on energy efficiency and modernizing the production units which will allow us the development of new applications"

"For the growth of the company and of the chemical sector is necessary the liberalization of energy prices, state guarantees for investments and access to European funds"

Chimcomplex Borzeşti, the chemical plant which has taken over a large portion of the assets of Oltchim, has made its strategic mission to become a chemical company that is strong regionally and integrated, said Tivadar Runtag, the new CEO of the company.

"Our strategy is to integrate the two units and to increase the overall efficiency of the company, to adjust the portfolio to the requirements of the market, to reduce the carbon footprint and to become regional market leaders", Tivadar Runtag, Chimcomplex CEO, told us.

He says that for the development of the company and of the chemical sector, which is strategic, we need nothing more than what is obvious: "We need to have the guarantee of the same economic environment as our major European and global competitors, which benefit from the liberalization of energy prices, guarantees for investment and access to European funds".

The plans of the new management team of Chimcomplex include accelerating the integration of the two platforms in Râmnicu Vâlcea and Borzeşti and accelerating investments that will help increase efficiency and develop the product portfolio.

"In order to respond to the challenges of the global market, we have strengthened the sales teams, to move from one «production unit» to an organization with a market-based strategy", Runtag further says.

According to the national investment and economic turnaround plan, when it comes to energy efficiency, Chimcomplex is interested in the building of at least one gas-based plant in partnership with Romgaz. Other, smaller plants are also considered. Also, according to our information, Chimcomplex is also interested in the possibility of using carbon capture and storage technology to reduce emissions, and it currently is carrying talks with the energy market.

Chimcomplex, the biggest exporter with Romanian capital, has completed at the end of February a good chunk of the integration operations, with a new executive team made up of Tivadar Runtag (CEO) Adrian Dumitriu (CFO), Serghei Gheorghe (CSCO - Chief Supply Chain Officer), Armand Spiru (CCO - Chief Commercial Officer), Victor Avram (COO Chimcomplex Vâlcea - Chief Operating Officer) and Daniel Prisăcariu (COO Chimcomplex Borzeşti).

Reporter: How have you adapted, you and the company, to the new context brought about by the pandemic? How long do you think the sanitary crisis will last and what does its end depend on, the development of a vaccine, for instance?

Tivadar Runtag: First of all, we have implemented safety measures to protect the health of our employees and business partners, who are in contact with us. We had to act very carefully to ensure business continuity. We have contacted new business partners, buyers and suppliers, we have renegotiated existing contracts and we are preparing for investments, to increase the performance of our production units. I thank our team from both plants, Borzeşti and Vâlcea, who work everyday with care, efficiency and consistency.

I don't know how long this pandemic will last, so we frequently examine and adjust our tasks, depending on the rapidly changing market. As the world changes and uncertainties grow, we learn new ways to deal with them.

Reporter: In the first quarter you have reported a 16.5% drop in total revenues and a loss. How has demand evolve on the markets you are active on, in the first half of the year and what growth prospects do you feel they present?

Tivadar Runtag: In the first quarter we have lowered our output, because several industries have seen slowdowns and demand has decreased for some chemical products we sell.

In April, the automotive industry in Europe has shutdown completely and in the mattress manufacturing industry activity has decreased by 30-90% depending on the country. The social distancing measures have also influenced negatively construction activity, another industry which we sell our products to. The most affected countries have been: Italy, Turkey, Ukraine and Russia, markets where the activity is almost in a complete deadlock. The quarantine for drivers and the restrictions on border crossings have had a considerable impact on consumption.

In general, our estimate is that in all of Europe, output has decreased in April by 60-70%, which has had a significant effect on our company as well.

Chemical plants are not easy to start and shutdown, which is why we have continued production at a lower capacity, but without interrupting it.

The markets we sell to have begun opening up again, I am betting on a turnaround in 2021.

Reporter: Have you been forced to abandon some investment projects following the results of the Covid crisis?

Tivadar Runtag: Over this period we have understood that our strategy is good. We have accelerated the integration of the two industrial platforms in Râmnicu Vâlcea and Borzeşti and the investments which will help us increase our efficiency and develop our product portfolio. We have changed some priorities but we have not abandoned the investment projects.

Reporter: In spring, you have announced the launch of a ready-to-use biocide. How have the process for the transformation of Chimcomplex and its market repositioning continued?

Tivadar Runtag: Our strategy is to integrate the two units and increase the overall efficiency of the company, to adjust the portfolio to the requirements of the market, to reduce the carbon footprint and to become regional market leaders.

The pandemic has confirmed that this strategy is the best. Chimcomplex has a strategic mission: to build a strong and integrated regional chemical company, which is among other things the only company that produces chlorine, sodium hypochlorite, bleaching powder and lye, all of them raw materials for biocidal substances.

Upon the early signs of the virus in Romania, we have increased the production capability for biocides and we have launched a new "ready-to-use" product, sodium hypochlorite with a 1.25% solution. We have applied for an expedited licensing for biocides, which we were awarded in March. That solution is available to distributors, public and private institutions and to end users.

At the same time, in May, we have restarted the installation for the production of isopropylic alcohol, which is the active substance for "ultra-disinfectants" (TP1, meaning those for human contact). IPA is known as an active ingredient in hand sanitation gels. Chimcomplex is the only Romanian company that produces IPA.

Chimcomplex biocidal products are also used in the chlorination of drinking water and swimming pool water. Bulgaria, Greece and Moldova have no national producers of chlorosodic or alcohol products and no other external sources from which to supply themselves, being directly dependent on our production. Cities such as Sofia, Athens and Thessaloniki would have no other sources to provide drinking water if Chimcomplex were unable to deliver the products needed to chlorinate the water.

We take this social responsibility very seriously, including during the period when international transit was restricted. We took great care during the quarantine to make the right strategic decisions and to overcome all logistical issues, including border closures.

Disinfectant-related activities have been the focus of attention - and the media - in recent months, but the transformation and repositioning of Chimcomplex S.A. far exceed this. We aim to become a modern organization, in touch with the needs of the market, a strong regional chemical company, dedicated to technological developments and ecological welfare. We involve our employees in the transformation process, and they can take an active part in shaping our strategy. In a program called "For Tomorrow," fellow volunteers team up to discuss short- and long-term priorities, opportunities for improvement, and feasibility.

Reporter: Ştefan Vuza said recently that Romania is completely captive to imports of medicines and chemicals because it has never had a sustainable policy in the field. What can be done to make the chemical sector a strategic sector or at least to reduce the trade deficit with chemicals, for example, which is Romania's largest?

Tivadar Runtag: The chemical industry is strategic. It gives value to Romania's natural resources: salt, natural gas, crude, water. It offers opportunities to specialists, which can be a great advantage in a very competitive global market.

Chimcomplex consumes 70% of the national production of the National Salt Company, is the fifth largest national consumer of electricity, the main domestic supplier of chemical raw materials for the food industry, rail transport, detergents, metallurgy, etc. Our company is the largest private exporter with domestic capital in Romania.

A consistent policy can help us grow. We ask for nothing more than what is obvious; to have the guarantee of the same economic environment as our major European and global competitors, which benefit from the liberalization of energy prices, state guarantees for investments and access to European funds.

It is also important to develop and implement a program for the development of educational institutions for research and design.

Reporter: A first step in Chimcomplex's initial strategic plan was to complete the integration of Oltchim's assets. This happened in the beginning of the year, there is a new management system and a new team. What are the next steps in the company's development plan?

Tivadar Runtag: To accelerate the integration of the two industrial platforms from Râmnicu Vâlcea and Borzeşti and the investments that will help us to increase efficiency and to develop our product portfolio.

In order to meet the challenges of the global market, we have strengthened our sales teams to move from a "production unit" to an organization with a market-based strategy.

We will focus more on becoming a company with a small environmental footprint and a new organizational culture. We recently launched an internal transformation program called "For Tomorrow." It involves colleagues who have volunteered to lay the groundwork for the "new Chimcomplex." "For Tomorrow" aims to generate realistic and necessary projects for Chimcomplex in the following categories of interest: Growth, Efficiency, Feasibility, People. I rely on the suggestions of our colleagues to prepare the next strategic steps for Chimcomplex. We will need close coordination and cooperation between all of us in order to fulfill our ambitions. We will only progress together!

We are also focusing on computerization to completely change the way we work, communicate, innovate, produce and consume and to bring unprecedented transparency to value chains.

Chimcomplex is in constant dialogue with our partners concerning ongoing improvements in chemical safety, the protection of the safety of our children, of the environment and of biodiversity.

We are recognized as an indispensable provider of products and solutions that are safe, of high quality and durable in service of society, as well as as a reliable partner and we want to develop further in these areas and to become a benchmark in the region.

Reporter: How much money do you think Romania can access out of the 9 billion Euros of the EU4Health program made available by the European Commission? Could your company benefit from this European financing?

Tivadar Runtag: The chemical industry is at the center of an evolution of the Romanian economy that is more complex and dynamic, acting as a manufacturer that is valued by society and a possible leader in recycling and circular economy.

We are now in the phase of analysis and preparation of several projects to increase our capacity, innovation, research and development of new products and we hope to access the necessary funds to add value to Romania's natural resources.

Reporter: The company has recently increased its capital in order to make investments and to ensure working capital. What new investments and products do you have in mind?

Tivadar Runtag: Our investments focus on energy efficiency and the modernization of production units that will allow us to develop new applications.

Reporter: When it comes to the strategy for growing your business, do you plan to (in the future) enter external markets, for instance making acquisitions in Romania's neighboring countries?

Tivadar Runtag: Chimcomplex S.A. is present in the markets of Europe, Asia and Africa. We will look for new business opportunities, not only by selling our products, but also by cooperating with local producers - or by providing access to our assets to top chemical companies that intend to move their research and development closer to European markets. Our distributors are an important trade channel, the partnership can evolve in various ways - based on mutual interest.

Reporter: What is the lesson that Romanian entrepreneurs should learn from the Chimcomplex story?

Tivadar Runtag: Entrepreneurship has never been a bed of roses, but persistence yields results. And the most interesting chapters in our story are written by us - here and now.

Reporter: Thank you!

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