Pardubice, 2 July 2012 – In the future Paramo does not expect to continue its atmospheric and vacuum distillation processing of crude oil and the hydrotreater desulphurization of middle distillates. The company's management reached this decision through a comprehensive analysis of the current macroeconomic situation, including low refining margins, lower demand for diesel or refining overcapacity in Europe. One of the factors is also low complexity of the Paramo refinery. The company's oil, lubricant and asphalt products will continue to be produced from intermediate grade distillates shipped in from other refineries.
"Paramo refinery was increasing its losses within recent years. Negative business results were caused by unfavorable macroeconomic conditions, low refining margins, refining overcapacity in Europe, but also by low complexity and capacity of Pardubice refinery," said Milan Kuncíř, Paramo's CEO. "This change will not jeopardize the oil or asphalt products segment of our business. Rather just the opposite, we are looking at some projects that should enhance it," said Milan Kuncíř, Paramo's CEO.
Last year company booked one-off impairment of fixed assets, in the amount of approximately CZK 1,700m. Impairment of the fixed assets evidences that under current environment, Paramo do not expect improvement of the conditions in the refining business.
Paramo will continue to produce oil and derivative products at its plant in Kolín and its production facilities will continue the production of process oils in Pardubice. Bitumens will be produced in a limited range using material brought from Litvinov refinery.
The ending of the processing of raw crude oil eliminated 60 job positions. The company has been helping these employees to look elsewhere for employment with other companies in the Pardubice region.
PARAMO, a.s., is a producer of asphalt products, lubricating and process oils, incl. subsequent and ancillary products. History of the company started in 1889. Today, Paramo is part of Unipetrol, a leading Czech group doing business in the field of petroleum processing and petrochemical production, which in turn belongs to the family of the supranational group PKN Orlen. Paramo is a 100% owner of Mogul Slovakia, a limited liability company which is engaged in the purchase and sale of oils and lubricants. The company employs 600 people.
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