Specialty chemical company Clariant has announced the closure of its sunliquid bioethanol production plant in Podari, Romania, and the downsizing of related activities in Germany. The decision comes after a strategic evaluation revealed that the plant did not meet operational targets. Clariant will incur restructuring costs and provisions of approximately CHF 60-90 million, impacting EBITDA, in December 2023. The closure will also result in additional impacts of approximately CHF 110 million at the EBIT level. The financial impact has led to a revised EBITDA expectation for the full year 2023 of CHF 570-600 million, down from the previous estimate of CHF 650-700 million.
MUTTENZ – Clariant, a sustainability-focused specialty chemical company, today 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® technology, Clariant had taken the decision in 2017 to establish its own commercial sunliquid® plant in Podari, 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 for Clariant to continue ramp up which would require significant additional capital expenditure. Following today’s 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 take firm decisions when a project does not fulfill expectations and to execute even more rigorously on our sustainable growth strategy,” said Conrad Keijzer, Chief Executive Officer of Clariant.
Clariant has also completed a preliminary financial assessment of the impact of this closure, as summarized in the table below. The company 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 2024. Clariant anticipates a cash impact relating to the closure costs of approximately CHF 110 – 140 million in 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.
Summary of total financial impact related to the decision:
Negative impact (CHF million) FY 2023 FY 2024
EBITDA 60 – 90 10 – 15
EBIT (incl. EBITDA impact) 170 – 200 10 – 15
Cash flow 110 – 140
Clariant has also reflected the financial impact of today’s announcement related to the closure of sunliquid® operations on the EBITDA full year guidance, resulting in reported EBITDA expectation for the full year 2023 of CHF 570 – 600 million (from previously CHF 650 – 700 million).