Continuing losses! Clariant Announces Closure of Romanian Factory! Scale Back German Business Line Activities

December 6, 2023 – Chemical giant Clariant announced the closure of its sunliquid® bioethanol manufacturing plant in Podari, Romania, and the reduction of related activities in the German biofuels and derivatives business line.

After developing its sunliquid® technology, Clariant established its own sunliquid® commercial plant in Podari in 2017, which started producing bioethanol in the second quarter of 2022. In July 2023, Clariant began a strategic assessment of the plant and found that it did not achieve target operational results.

Clariant’s management believes that continued economic losses indicate that the Podari plant is not suitable to continue to increase production capacity. After the announcement on December 6, the plant’s biofuels and derivatives business line activities will be reduced, only functional activities necessary to maintain technology and fulfill existing contractual obligations are retained.

"After careful review, we have decided to close the Podari plant and will discuss layoffs and employment-related solutions with employee representatives in Romania and Germany." Clariant CEO Conrad Keijzer said:“For companies that focus on innovation, when projects don’t live up to expectations, it’s important to cut through the clutter quickly, make decisions accordingly, and execute our sustainable growth strategy more rigorously.”

Clariant's preliminary financial assessment of the closure of the Podari plant shows that provisions related to plant closures, layoffs, and restructuring are approximately CHF 60 million to CHF 90 million, resulting in an impact on EBITDA in December.

In addition, non-cash impairment of the Podari factory assets and other remaining assets resulted in a loss of approximately CHF 110 million in EBITDA. The amount of these losses will be recorded in December 2023 and reflected in the full-year 2023 results to be announced on February 29, 2024. Clariant estimates that the closure of the Podari plant will cause cash losses of approximately 110 million to 140 million Swiss francs in 2024, and costs related to plant maintenance and technology licensing are expected to be CHF 10 million to CHF 15 million.