Sumy TiO2 privatisation looms
Published: Monday, 16 August 2010
State-owned Ukrainian titanium dioxide producer explores private ownership
Sumykhimprom, the Ukrainian titanium dioxide (TiO2)
producer, is exploring privatisation in a move that will see a
shakeup of its management practices and get the manufacturer
back on track.
The 40,000 tpa sulphate producer based in the
countrys north only produced 20,000 tpa in 2009 and is
struggling to get to full capacity because of what was
described as ineffective management by a source
close to the company.
New Ukrainian public-private partnership laws have
been relaxed in recent months which could open the door for a
possible buyout of Sumykhimprom although there is yet to be any
interested foreign parties.
The countrys TiO2 producers have
benefited from cheap imported gas from Russia, which underpins
the Ukrainian economy. Recent hikes in domestic household gas
prices by 50% have sparked concern that the same may happen to
If this happens, TiO2 producers will be hit
hard such is their reliance on the energy source.
This was demonstrated last year during the gas dispute
between Russia and Ukraine over a $2.4bn. unpaid bill, which
resulted in a supply restriction and suspensions at Crimea
Titan, the countrys leading TiO2
But with a pro-Russian government now in place in
Ukraine, supplies of gas are likely to be flowing in abundance
in the short-term but whether Sumykhimprom is a desirable
prospect remains to be seen.