EU Approves French State Aid to Kem One
As the European PVC production sector goes through a spell of “shape-shifting,” the prospects for France’s ailing Kem One are looking up. Following the merger of the Solvay and Ineos PVC assets into INOVYN, the former Arkema subsidiary now owned by private equity investor OpenGate Capital and industrialist Alain de Krassny has moved up to become Europe’s number two player, ahead of VYNOVA, the new vehicle of International Chemical Investors Group (ICIG).
With output capability of more than 2.4 million t/y of PVC, the Ineos-Solvay jv dwarfs the other two. Kem One has an estimated capacity of 927,000 t/y, while VYNOVA weighs in at 820,000 t/y.
Another piece of good news for Kem One is the recent EU approval of French state aid to the company, which struggled with insolvency under its first new owner, the US-headquartered Klesch Group.
The EU commission had initially challenged the €125 million French aid package awarded in 2014. In a decision published in late July, however, the Commission said the money did not constitute an illegal subsidy, but rather was an “appropriate response” to Kem One's difficulties – especially as it provided for a sufficient contribution from the company.
A €30m loan from the French Economic and Social Development Fund (FDES) is part of the package, along with an investment subsidy of €15m and a repayable advance of €80m to be used as partial financing for converting the caustic soda electrolysis plant at Lavéra, France, to the bipolar membrane process.
Kem One has already begun work on the projects the grants will help finance, installing new steam generators at its Balan site and spending €45 million on the upgrade at Lavéra, both in southern France. The company said the capital injection will allow it to continue investing “in full confidence.”