Chemical group CIECH is investing PLN 80m ($21m) in a new furnace at its Żary plant in Poland to increase production capacity of vitreous sodium silicate, a key raw material for precipitated silica used in energy-saving tyres and cosmetics. The furnace will be completed by the end of 2021 and will increase CIECH's production capacity for sodium silicate by over 30% to around 240,000 tonnes. The new furnace will be more efficient, reducing fuel consumption and CO2 emissions by 20% compared to current technology. The investment is expected to increase silicate business revenues by PLN 60m per year.
At CIECH's plant in Żary, construction and installation of a new furnace for melting vitreous sodium silicate - a key raw material for the production of precipitated silica, which is used, among other things, in the production of energy-saving tires and cosmetics. CIECH's new investment, worth about PLN 80 million (approx. €18 mln), will increase production capacity and strengthen the chemical group's position as the leading supplier of sodium silicate in Europe. Construction of the modern, efficient and energy-saving furnace will be completed by the end of 2021.
Currently, construction is underway and the final touches are being put on all the elements that will make the plant possible. In mid-August, assembly of the furnace for melting the finished product also began.
The start-up of the new furnace will allow the closure of the older and less efficient units and will increase CIECH's production capacity for sodium silicate by more than 30% (to about 240 thousand tons). (The new furnace will be characterized by the highest quality and efficiency). The new furnace will be mainly characterized by better efficiency parameters and lower fuel consumption, i.e. natural gas, which will also allow to reduce CO2 emissions per ton of product by about 20% compared to the current technology. The investment will partially use the existing infrastructure, optimizing the plant's fixed costs.
"Despite the many complications and challenges during the pandemic, the investment is proceeding according to plan. Construction is expected to be completed by the end of 2021, so that production of the new furnace will contribute to the Group's results in 2022. Once the furnace is fully operational, the investment is expected to increase revenues from the silicate business by approximately PLN 60 million per year," said Mirosław Skowron, Member of the Board of Directors of CIECH S.A.
According to external analysis centers, the market for precipitated silica will grow by about 7% per year in the coming years. Silicate production also proved relatively immune to the economic downturn caused by the COVID-19 pandemic. During the worst period, silicate production levels did not fall below 80 percent of capacity, and in the first quarter of 2021, the segment reported revenue growth of 22.6 percent year-on-year and EBITDA growth of 40 percent.
"The European market is characterized by high silicate capacity utilization, and the vast majority of manufacturers produce sodium silicates for their own use. We are already concluding contracts for silicates from the new furnace, taking advantage of CIECH's very good reputation on the European market," says Robert Janeczko, head of silicate operations at the CIECH Group.
The CIECH Group produces sodium and potassium silicates (in solid and liquid form) within its Silicates business unit. It also has the status of the largest supplier of this raw material in Europe, where about 40% of sodium silicates are used to produce precipitated silica, from which - in addition to energy-saving tires - toothpaste, paints and fillers for plastics are manufactured. Sodium silicates are also used in the production of detergents, paper, zeolites and in other industries. Potassium silicates are used in construction chemicals and welding. The company also exports silicates to Asia and North America.