Банкеръ Weekly



Even upon the signing of the contract for the privatisation of 51% of the Rousse-based organic dyes plant Orgachim in July 1998 it was clear that it will be difficult for the company to survive with the USD13MN ZUNK liabilities it has inherited. Obviously the buyer, Whitebeam Holding, thought otherwise undertaking the heavy task of saving the company from the hyper-endebtedness. Besides, it has paid USD8.9MN cash.
At present, almost three years later, as Orgachim celebrates its 100 anniversary, its managers are putting supper efforts in at least expanding their market share, as it is not possible to overcome the debt crisis. Thus they hope to increase their credibility in front of their creditors. Although in 2000 Orgachim increased their sales to BGL41.4MN through offering new products, like the Leko dyes, the final annual result of its operation was a loss of BGL9.452MN. As a result its net assets reached a negative number (minus BGL7.222MN). The major, yet not the only reason for this devaluation is the rapid increase of the US Dollar rate, as a result of which the company incurred losses of USD7MN for a year only.
Now Valery Petrov, Orgachim Executive Director, who succeeded the Romanian Marius Golopenza at this position on July 3, 2000, is of the opinion that the situation might change only as a result of an agressive advertising compaign. Petrov said that in the future the company will rely upon products which meet specific requirements. This can easily be understood - the number of dyes producers at the local market has increased lately. That is the reason why Orgachim has already started the production of non-dripping and sanitary dyes. For several months already the company has undertaken an active promotion of its products at the Sofia market. Like the Italian Benetton, the Rousse-based dyes producer relies upon advertising through applying its own products. A number of Sofia play-grounds were coloured with Orgachim products, and the overall painting of three trams is among the most vanguard company plans. According to its managers they will be launched in Sofia latest till June 1, 2001.
This way Orgachim hopes to promote its presence at the Bulgarian market, where it sells just 40% of its production. The remaining part is exported to the Middle East, Turkey, Greece, Ukrine, Russia and Armenia. The company managers are also planning to attack the Serbian market. They are also negotiating export to Western Europe for newly established industrial sites.
During the first quarter the plant has invested BGL1.2MN for reconstruction and upgrading of the three major production shops, which will facilitate the new production. This amount is a part of Whitbeam Holding's investment programme. According to the privatisation contract the holding, which is registered in Malta, has made the committment to invest USD5.04MN in Orgachim till the middle of 2002.
These efforts might bring a result, having in mind that the Parliament also supported the ZUNK endebted companies, thus indirectly supporting Orgachim as well. That materialised in the final amendments of the Luchnikov Act, allowing the companies to pay their ZUNK interests for 2001 through compensatory notes. The interests Orgachim has to pay for 2001 amount to some USD1MN, so that buying compensatory notes will amount to a little bit over USD200,000. The executive director Petrov, however said that for the moment the company does not plan to enter the market of these shares, as he thinks that their price will decrease.
Only an eventual sharp increase of the USD/EUR rate may have a strong positive effect on the company results. In this case the leva liabilities of the company will decrease.</p align=justify

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