Business performance by segment

Polyols are basic feedstocks used in the production of polyurethane (PU) foams and PU systems that have a wide range of applications in a large number of industries. Flexible PU foams are used, among other things, in the manufacture of comfortable mattresses. Rigid PU foams are employed in the refrigeration industry for insulation purposes and in the construction industry as sealing foam. Special prepolymer foams are used, for instance, in the production of polishing pads for the automotive industry, while PU systems are employed e.g. in thermal insulation applications, in block constructions incorporating thermal insulation panels, and as polyurethane adhesives for a variety of applications.

The Polyols & Derivatives segment comprises the Polyols, Polyurethane Systems and Alkylphenols business units. The dominant entity in this segment is the Polyols business unit of PCC Rokita SA, Brzeg Dolny (Poland), the focus of which is on the production, sale and distribution of polyether and polyester polyols. The Polyols & Derivatives segment also includes the specialty foam and polishing pad manufacturer PCC Prodex GmbH, Essen (Germany), and the systems house PCC Prodex Sp. z o.o., Brzeg Dolny, as well as the intermediate holding company PCC Insulations GmbH, Duisburg (Germany), under the umbrella of which all affiliates involved in the production and sale of insulating and other building materials are pooled. These include PCC Therm Sp. z o.o., Brzeg Dolny, PCC Bulgaria EOOD, Sofia (Bulgaria), and the corresponding business unit of the Czech company PCC Morava-Chem s.r.o., Český Těšín. 2023 saw further progress in growing the businesses of these affiliates, the development of which had been delayed in recent years due to the pandemic. This also applies to the activities of PolyU GmbH, Oberhausen (Germany), which focuses on the development of customer-specific specialty products based on polyols. The Polyols & Derivatives segment is completed by IRPC Polyol Company Ltd., Bangkok (Thailand), a joint venture with the Thai company IRPC Public Company Ltd., in which the PCC Group holds a 50 % interest. The company is accounted for in the Group using the equity method. The number of employees in the Polyols & Derivatives segment at year-end amounted to 341 (previous year: 351).

The Polyols & Derivatives segment generated sales of € 191.1 million in fiscal 2023, € 68.7 million or 26.4 % less than in the previous year (€ 259.8 million). At 19.2 %, the share of Group sales was at the previous year’s level (19.6 %); however, the total fell short of our revenue expectations for 2023 by a wide margin overall, with our earnings performance also significantly weaker than expected. In addition to lower demand, the main reason for this was increasingly aggressive competition from China and other Asian countries. This not only impacted sales by European manufacturers in Europe, but also reduced export opportunities for European goods, further intensifying competition within Europe. From September 2023, there were signs of a modest increase in demand for polyols, but this demand was predominantly for cheaper standard grades with lower margins. In this challenging market environment, the Polyols business unit of PCC Rokita SA nevertheless held up well and once again achieved a positive annual earnings result, albeit without matching the very good results of the previous year.

IRPC Polyol Company Ltd., of which the polyols and polyurethane systems are marketed primarily in the Southeast Asian region, likewise faced increasing competition from China. The sales and earnings performance of this affiliate, although remaining profitable, was therefore also significantly below the levels of the previous year and below our expectations.

The polyurethane systems house PCC Prodex Sp. z o.o. benefited in the fourth quarter of 2023 from the severe shortage of the key feedstock methylene diphenyl isocyanate (MDI) on the European market – a consequence of production problems at several European manufacturers. PCC Prodex Sp. z o.o. sources most of its MDI from Asia and was therefore not affected by this bottleneck. As a result, this affiliate was able to achieve significantly higher selling prices on the market for the polyurethane systems it produces (mainly roof spray foams) and therefore actually match the very good earnings level of the previous year. Although PCC Prodex GmbH, which operates in the specialty foam and polishing pads business area, was able to improve its performance compared to the previous year, it remained in deficit in 2023. This also applies to the thermal insulation panels business of the intermediate holding company PCC Insulations GmbH and its subsidiaries, the expansion of which had been severely slowed by the coronavirus pandemic. The alkylphenol manufacturer PCC Synteza S.A., Kędzierzyn-Koźle (Poland), recorded a sharp decline in demand in this core business in 2023 and therefore also closed the fiscal year under review with a loss. Both sales and earnings at this affiliate were significantly down on the previous year and also well below our expectations. The expansion of its product portfolio in the previous year to include polyols-based specialty chemicals will therefore be of increasing importance for the future development of PCC Synteza S.A. The company manufactures these specialty chemicals in close cooperation with PolyU GmbH. Demand for these products was also at a low level due to the weak state of the construction industry. In addition, inventories of high-priced input materials had to be used up first, which is why PolyU GmbH also ended 2023 with a loss. In the long term, however, the production and sale of these specialty products should result in significant growth for both affiliates.

Going forward, we plan to continue diversifying and expanding the Polyols & Derivatives segment’s product portfolio in order to strengthen this segment’s basis for success in the long term. Areas of focus include the development of products for customer-specific applications, together with geographical expansion, particularly in the still dynamic Asian markets, and – in the long term – in the USA. This applies not only to the Polyols & Derivatives segment, but across all core business areas in the Group. In fiscal 2023, the focus was on the construction of a production facility for oxyalkylates (a group of chemicals that includes special non-ionic surfactants and polyether polyols) in Malaysia together with the Malaysian joint venture partner PETRONAS Chemicals Group Berhad (PCG). And construction of this plant with a production capacity of 70,000 metric tons by the joint project company PCG PCC Oxyalkylates Sdn. Bhd. progressed according to plan in 2023. The commissioning phase started in the third quarter. The start of regular production operations was delayed beyond the turn of the year due, among other things, to a maintenance-related shutdown of PCG’s production plant for the feedstock ethylene oxide. In the coming years, PCG PCC Oxyalkylates Sdn. Bhd. is expected to contribute to further growth in both the Polyols & Derivatives and Surfactants & Derivatives segments.

Surfactants – or surface-active agents – have an extremely wide range of applications. They reduce the surface tension of a liquid or the interfacial tension between, for example, a solid surface and a liquid. The many and varied actions they produce include foaming, wetting, emulsifying and cleaning. Surfactants are basic components of laundry and home care detergents, cleaning agents and personal care products. They are also used, for example, in the textile and agrochemical industries, as well as in the production of lubricants, paints, coatings and plastics.

The Surfactants & Derivatives segment comprises the Anionic Surfactants, Non-ionic Surfactants and Betaines (Amphoteric Surfactants) business units, as well as downstream business activities in the consumer goods sector. This segment includes PCC Exol SA, Brzeg Dolny, and its US subsidiary PCC Chemax, Inc., Piedmont (South Carolina). Since 2022, PCC SE has also been managing PCC Consumer Products S.A. and its subsidiaries within the Surfactants & Derivatives segment. Its consumer goods production activities include household and industrial cleaners, laundry detergents and personal care products, both under PCC’s own brand names and as private label products. The Surfactants & Derivatives segment generated sales of € 206.6 million in 2023. Compared to the previous year (€ 231.8 million), this represents a decrease of 10.9 %. The share of total sales of the PCC Group increased by 3.3 percentage points to 20.8 %. The number of employees at the end of the fiscal year amounted to 495 (previous year: 513).

Although sales volumes at the largest affiliate in this segment, PCC Exol SA, remained flat in 2023, they came in below our expectations. This applied in particular to the specialty industrial products business area. Average selling prices in 2023 were lower than expected both in this business and in the case of feedstocks for the personal care and cleaning products industry. In addition to the weak economy, one of the main reasons for this was increased competitive pressures, particularly from China and India. In the course of the second half of the year, a major European surfactant manufacturer also penetrated the European market with its newly commissioned capacities. Its aggressive pricing policy further intensified the competitive situation. Despite this challenging market environment, however, PCC Exol SA was able to close fiscal 2023 with a successful set of financials. This also applies to its subsidiary PCC Chemax, Inc. and to the Surfactants & Derivatives segment as a whole. Encouragingly, the consumer products business area also made a positive contribution in 2023. The dominant company in the Consumer Products business area is PCC Consumer Products Kosmet Sp. z o.o., which benefited from rising demand for private label products in the past fiscal year. The high proportion of household chemicals in the product portfolio of PCC Consumer Products Kosmet Sp. z o.o. also had a beneficial effect on earnings, as this market segment is fundamentally much more resilient than the cosmetics market.

As in the Polyols & Derivatives segment, the PCC Group also plans to further diversify its product portfolio in the Surfactants & Derivatives segment and to continuously expand the proportion of higher-value specialty products. Sales activities across all segments will be increasingly geared to specific applications and are also to be strengthened by the appointment of regional managers. These will be responsible for the territories Western Europe, Central and Eastern Europe, and Southern Europe. Efforts will also be aligned to increasing internationalization, particularly in the Asian market, but also in the MENA region and – in the long term – in the USA. By concluding a joint purchase agreement with its most important ethylene oxide supplier, PCC Exol SA, together with PCC Rokita SA, had already ensured its supply of this essential input material by the end of 2021. However, this contract also requires an expansion of production capacities on the PCC side. Work in this direction began in 2023 and will be further progressed in 2024. In addition, early preparations are underway for the utilization of these new capacities through
the progressive expansion of both our customer and product portfolios.

Chlorine is one of the most important and most-produced raw materials used in the chemical industry. Within the PCC Group, the chemical is used, among other things, in the production of propylene oxide for polyols manufacture, and as a feedstock for the production of monochloroacetic acid (MCAA) and phosphorus derivatives. Chlorine is also employed as a disinfectant and, like various chlorine co- and downstream products, is used in water management and petrochemistry.

The Chlorine & Derivatives segment is divided into four business units: Chlorine, Other Chlorine Downstream Products, Monochloroacetic Acid (MCAA), and Phosphorus and Naphthalene Derivatives. This segment includes the corresponding Chlorine business unit of PCC Rokita SA, the business unit Phosphorus and Naphthalene Derivatives also of PCC Rokita SA, plus MCAA SE and PCC MCAA Sp. z o.o., all located at the Brzeg Dolny site. Sales revenue in this segment amounted to € 275.6 million in 2023, down 29.1 % on the previous year (€ 388.5 million). Its share of Group sales fell by 1.6 percentage points to 27.7 % (previous year: 29.3 %). The segment employed 427 people as of the reporting date (previous year: 464).

The Chlorine & Derivatives segment was once again by far the main revenue and earnings generator of the PCC Group in 2023. However, its figures fell well short of the record numbers of the previous year. Here, too, the main reasons were the weak economy coupled with increasing competitive pressure from China and rising overheads. In addition, chlorine production at the Brzeg Dolny site had to be curtailed due to lower demand within the Group for propylene oxide (as a feedstock for the manufacture of polyols based on chlorine and propylene) and also lower demand for chlorine for MCAA. This also reduced the volume of chlorine by-products manufactured. Average selling prices for these products fell significantly compared to the sometimes historic highs of 2022. However, they remained at a high level, thus exerting a correspondingly positive impact on the earnings performance of the Chlorine business unit of PCC Rokita SA. Earnings were boosted by compensation payments from the Polish government for high energy and CO2 costs. Overall, therefore, this business unit and also the Chlorine segment as a whole closed 2023 in clearly positive territory.

The Phosphorus and Naphthalene Derivatives business unit of PCC Rokita SA was affected by strong competition from China in 2023, particularly in the phosphorus-based flame retardants business area. Some of the Chinese products were being offered at prices below the manufacturing costs in Europe. The average selling prices and thus also the margins for European products therefore fell considerably. Although the performance of this business unit remained well below the historically good results of the previous year, it was still able to end fiscal 2023 with a positive earnings balance.

The sales and earnings of PCC MCAA Sp. z o.o. in 2023 also fell short of the very good prior-year figures. Among other things, this was due to significantly lower sales of MCAA to several customers in the crop protection industry – a consequence of high customer inventories that had been built up in previous years due to supply chain problems. Demand for MCAA from other industrial sectors was also down on the previous year. Due to an unforeseen catalyst replacement, the earnings of PCC MCAA Sp. z o.o. were also burdened by high unforeseen impairment charges. Falling input raw material prices, including for acetic acid, had an offsetting effect, however. Overall, therefore, the business performance of this affiliate was also positive in 2023.

Silicon metal is used, for instance, as an aluminum alloying element and in the chemical industry in siloxane and silicone production. A strong increase in demand for silicon metal and the silicon powder produced during its manufacture is predicted over the long term, due – among other things – to new applications relating to climate protection.

The Silicon & Derivatives segment is divided into the Silicon Metal and Quartzite business units and comprises PCC Bakki-Silicon hf., Húsavík (Iceland), with its silicon metal production facility, and PCC Silicium S.A., Zagórze (Poland), which extracts the basic raw material for silicon metal from its quartzite quarry. Also managed within this segment is PCC Seaview Residences ehf., Húsavík, which arranges housing for local employees. Overall, the Silicon & Derivatives segment generated sales of € 72.0 million in the year under review, down 35.9 % on the previous year (€ 112.4 million). The share of Group sales amounted to 7.2 % (previous year: 8.5 %). The number of employees at year-end decreased to 207 (previous year: 223).

The main revenue generator of the segment is PCC BakkiSilicon hf. which operates a silicon metal plant in Húsavík, Iceland, with a nominal annual capacity of 32,000 metric tons. However, due to the difficult market situation prevailing, this Group company only had one of its two furnaces operating throughout 2023 and ended the past fiscal year with a substantial loss in the high double-digit million euro range. The main reason for this was the decline in demand for silicon metal, particularly from the domestic aluminum industry – a consequence of the high energy prices in Europe coupled with weak demand for aluminum from the automotive and construction industries. Demand from other customer sectors, including the chemical industry, also continued to decline due to the economic situation. At the same time, large quantities of silicon metal, particularly from China, continued to penetrate the European market, which – unlike the US market, for example – is inadequately protected against cheap imports. The prices of these imported volumes were, in some cases, even lower than the production costs in Europe. In the course of 2023, energy prices and, among other things, the purchase price for the coal used as a reducing agent in the production process for silicon metal declined further. PCC BakkiSilicon hf. also succeeded in significantly optimizing the production process, thereby increasing both its raw material input factors and its silicon metal yield. At the end of 2023, there were signs of a turnaround in the market for silicon metal: A European competitor had to shut down its silicon metal production due to a fire at its plant and the outage is expected to last several months. In addition, silicon metal prices in China rose and transportation costs to Europe increased as a consequence of the new conflict in the Middle East and the associated problems in the Suez Canal and the Red Sea. Delivery times were extended as a result and demand for European goods rose again. PCC BakkiSilicon hf. therefore recommissioned its second furnace in January 2024 and is now sold out beyond the first quarter, even with this two-furnace operation. A two-furnace operation leads to a further reduction in production costs per ton of silicon metal due to economies of scale, as overhead costs increase only insignificantly compared to single-furnace operation. If the current positive trend proves to be sustainable, the company plans to produce with two furnaces all year round. It also intends to continue its strong focus on optimizing the production process. In addition, production is to be increasingly slewed toward higher-value grades that are exposed to less intense competition. The economic situation of PCC BakkiSilicon hf. is thus expected to be extensively strengthened going forward.

PCC Silicium S.A., on the other hand, closed the past fiscal year in positive territory with its figures up on the previous year, despite lower deliveries of quartzite to Iceland. Regular supplies of quartzite to a Slovakian ferroalloy manufacturer and also deliveries of ballast for the construction of roads and railroad lines are the main reasons for this positive development.

The PCC Group can draw on expertise in the trading of petro- and carbon-derived commodities spanning three decades. The trading portfolio of PCC Trade & Services GmbH includes basic chemical feedstocks as well as coking plant by-products, particularly crude benzene. It also trades to a lesser extent in solid fuels such as coke breeze, small coke and anthracite in small nut sizes. This company likewise provides logistics services and supports PCC BakkiSilicon hf. in both the marketing of silicon metal and the procurement of raw materials. Other services managed under the Trading & Services segment include the Conventional Energies business, which primarily supplies Group-owned plants in Poland with process steam and electricity, plus a wide range of other internal services, including in the fields of information technology, infrastructure management, analytics, maintenance and repair, and waste disposal.

The Trading & Services segment is divided into the two business units of Commodity Trading and Services and comprises the trading companies PCC Trade & Services GmbH, Duisburg (Germany), distripark.com Sp. z o.o., Brzeg Dolny (Poland), PCC Morava-Chem s.r.o., Český Těšín (Czech Republic), and the Turkish sales company PCC Exol Kimya Sanayi ve Ticaret Limited Şirketi, Istanbul. The port company AO Novobalt Terminal, Kaliningrad (Russia), is likewise consolidated within this segment.

The Conventional Energies division also managed in this segment comprises the corresponding business unit of PCC Rokita SA, i.e. its Energy business unit, and PCC Energetyka Blachownia Sp. z o.o., Kędzierzyn-Koźle (Poland). The Services business unit also contains a number of companies providing predominantly intra-Group services, including PCC IT S.A., PCC Apakor Sp. z o.o., LabMatic Sp. z o.o. and Ekologistyka Sp. z o.o., each based in Brzeg Dolny. Overall, the Trading & Services segment generated sales of € 117.6 million in the year under review, down 38.6 % on the previous year (€ 191.5 million). The share of total consolidated sales decreased by 2.6 percentage points to 11.8 %. The number of employees as of the reporting date amounted to 1,061 (previous year: 1,099).

The largest affiliate in this segment is the commodity trading company PCC Trade & Services GmbH. Sales volumes and revenues of this portfolio company declined significantly in 2023 compared to the previous year, mainly due to the sanctions-related discontinuation of trading in commodities of Russian origin. Operationally, 2023 was clearly positive for PCC Trade & Services GmbH and better than expected. However, due to the derecognition of loan and interest receivables in the mid-single-digit million euro range, the company ended the year under review with an overall loss. The writeoffs mainly related to receivables from the Russian subsidiary AO Novobalt Terminal. This port company, through which a large proportion of the raw materials sourced in Russia (mainly coke and anthracite) were transshipped in the past, has only been handling its own domestic business within Russia since mid-2022. This allows the running costs to be covered locally. However, it does not appear possible that the interest and loan receivables of PCC Trade & Services GmbH will be repaid in the foreseeable future. The trading businesses of PCC Morava-Chem s.r.o. and the online platform distripark.com operated at a low level in 2023 with minor deficits ensuing due to the economic situation. By contrast, PCC Exol Kimya, which in addition to surfactants from its parent company PCC Exol SA also sells monochloroacetic acid on the Turkish market, closed fiscal 2023 in positive territory.

As expected, the Trading & Services segment as a whole closed fiscal 2023 with a loss. In addition to losses in the trading business, the main reasons for this include the high costs of CO2 certificates and high electricity charges in Poland, as well as high personnel expenses in some of the business units of PCC Rokita SA managed in this segment. At the level of PCC Rokita SA, however, these costs were more than offset.

The Logistics segment comprises the Intermodal Transport and Road Haulage business units. PCC Intermodal S.A. is one of the leading providers of container transport services in Poland. The logistics network based on several wholly owned container terminals extends from Eastern Europe to the Benelux countries, across northern Italy and through to Greece and Türkiye. PCC Group’s tanker fleet specializes in the Europe-wide road haulage of liquid chemicals.

The Logistics segment includes the Polish company PCC Intermodal S.A., Gdynia, and its German subsidiary PCC Intermodal GmbH, Duisburg, as well as PCC Autochem Sp. z o.o., Brzeg Dolny. Sales of the Logistics segment amounted to € 127.7 million in 2023, down 7.4 % on the previous year (€ 137.9 million). The share of Group sales amounted to 12.9 % (previous year: 10.4 %). The number of employees at year-end fell slightly to 644 (previous year: 652).

The Logistics segment is dominated by PCC Intermodal S.A., the portfolio of which includes regular combined transport services both within Poland and on international routes with departure points in Rotterdam, Hamburg and Duisburg, among others. Since 2023, it has also been increasingly offering transport services from the Polish ports to the Ukrainian border and vice versa. At the end of the third quarter, following a successful test phase, PCC Intermodal S.A. also expanded its range of routes to include regular container block train services between Gliwice in Poland and Padua in northern Italy. From there, there are various domestic connections within Italy, as well as routes to Greece and Türkiye via Bari. These new services are expected to contribute to the further growth of PCC Intermodal S.A. However, conditions in the international container market remained difficult in the year under review. This was attributable not only to weak demand due to the economic situation, but also to further challenges faced by PCC Intermodal S.A. and its German subsidiary, including numerous engineering works on the rail routes not just in Poland but also in Germany and the Netherlands, plus increasing competition on the road, which was actually exacerbated by these engineering sites, and a lack of supply stability to and from the Far East. In addition, the sometimes chaotic conditions on the Polish-Ukrainian border repeatedly caused delays both in the transportation of Ukrainian goods to the Polish ports and in deliveries in the opposite direction, resulting in a considerable backlog of containers. Despite these challenges, however, PCC Intermodal S.A. closed the fiscal year under review with a successful set of financials. Among other things, transport for a new major customer in eastern Germany and the increasing operating rate of the block train container services on offer since the end of the third quarter had a positive impact on earnings. Overall, however, revenue and earnings in 2023 remained below the previous year’s very good figures. Intermodal transport was once again a focus of investment for the PCC Group in 2023. With the acquisition of further locomotives and platforms and the continuous expansion of existing terminals, 2023 saw the laying of important foundations for added growth going forward. The construction of further terminals should further boost this upward trajectory. This includes driving forward a corresponding project south of the Polish seaports of Gdynia and Gdańsk, with further progress having been made in 2023. A terminal project on the Ukrainian-Polish border is also being investigated. Additional growth potential should also emanate from the expansion of the activities of PCC Intermodal GmbH. At the beginning of 2023, this company received the safety certificate required for the operation of a rail undertaking (RU), as is required under Germany’s General Railway Act (AEG) for the operation of railway services on higher-level networks. With this, PCC Intermodal GmbH can now carry out transportation operations with its own locomotives, thereby enhancing the overall competitiveness of the PCC Intermodal companies. The first two locomotives were put into operation at the beginning of 2024.

The tanker haulage company PCC Autochem Sp. z o.o. again recorded a positive business performance in line with our expectations in the year under review. The Russian company AO PCC Rail, which had already ceased operations at the end of 2022, was deconsolidated as of January 1, 2023.

The Holding & Projects segment manages nascent projects with potential for the future, such as the construction and commissioning of an oxyalkylates production facility in Malaysia together with our joint venture partner PETRONAS Chemicals Group Berhad (PCG); a further plant in the USA is in the planning phase. This segment also includes our start-up PCC Thorion GmbH, which is developing an innovative material made from nano-silicon powder for enhancing the performance of lithium-ion batteries.

The segment is divided into the two business units Portfolio Management and Project Development. Alongside the Group holding company PCC SE and the intermediate holding company PCC Chemicals GmbH, this segment also includes the project company PCC Thorion GmbH, Duisburg (Germany), and PCC Chemicals Corporation, Wilmington (DE, USA), which was established in 2023. Various other project companies and our environmentally friendly small hydropower plants are also managed in this segment.

In the year under review, the Holding & Projects segment generated earnings before interest/financial result, taxes, depreciation and amortization (EBITDA) of € – 8.5 million (previous year: € – 8.4 million). The number of employees in the segment as of the reporting date remained almost constant at 90 (previous year: 89).

The Holding & Projects segment also includes two project companies that are accounted for in the consolidated financial statements of PCC SE using the equity method: the joint venture OOO DME Aerosol, Pervomaysky (Russia), and the joint venture PCG PCC Oxyalkylates Sdn. Bhd., Kuala Lumpur (Malaysia). The development of this latter project company, which we operate together with our joint venture partner PCG, one of Southeast Asia’s leading chemical producers, initially progressed according to plan in 2023. Construction of the planned production plant for oxyalkylates (special non-ionic surfactants and polyether polyols for a wide range of industrial applications) with an annual capacity of 70,000 metric tons was completed on schedule and within budget. The plant commissioning phase started at the end of the third quarter of 2023. The start of commercial production operations was delayed beyond the turn of the year, partly due to a maintenance-related shutdown of the ethylene oxide production facility by our joint venture partner. It is expected that, with its product mix, PCG PCC Oxyalkylates Sdn. Bhd. will contribute to further growth in the Polyols & Derivatives and Surfactants & Derivatives segments going forward. The expansion of core business areas of the PCC Group in the fast-growing region of Southeast Asia is thus to be driven forward across all segments. Similar efforts are also being made with regard to the rapidly expanding US market. An important milestone was reached in the oxyalkylates project there in 2023 with the signing of a long-term, terminable lease agreement for a site in the immediate vicinity of the port of Bay City, Texas. This agreement gives the project company PCC Chemicals Corporation, Wilmington (DE, USA), the opportunity to extensively investigate this site before making a final investment decision.

Since the sanctions imposed by the European Union, among others, following the outbreak of the Russian war of aggression against Ukraine in 2022 came into force, the joint venture OOO DME Aerosol, which operates a plant for the production of dimethyl ether (DME) in the Tula region, has only been selling its products to countries in which the purchase and import of DME from Russia is not sanctioned. Nevertheless, continuous plant operation was maintained and a positive cash flow was achieved. OOO DME Aerosol was therefore able to resume regular loan repayments to PCC SE from the fourth quarter of 2023.

Within the Renewable Energies business, which we manage in the Project Development business unit, a total of five small hydropower plants in North Macedonia and one in Bosnia and Herzegovina were in operation in 2023. Permits remain pending for three sites in Bosnia and Herzegovina; however, there is still no sign of this lengthy process being completed. Nevertheless, the six operating portfolio entities continued to generate relatively stable cash flows in 2023. In view of the generally rising demand for energy and the current climate protection initiatives, PCC SE expects to see increasing flexibility in the potential utilization of these assets.

Fiscal 2023 saw the project company PCC Thorion GmbH continue its cooperation with the Fraunhofer Institute for Solar Energy Systems ISE and the German universities of Freiburg and Duisburg on the development of an innovative material made from nano-silicon powder based on our silicon metal from Iceland. The aim of the project is to increase the performance of lithium-ion batteries. Assuming the project is implemented successfully, this could extend the value chain in our Silicon & Derivatives segment and significantly increase its profitability.