Holding & Projects

Projects of the future and sustainble portfolio management

The Holding & Projects segment manages and controls projects aligned to the future, for example currently the construction of a production plant for oxyalkylates in Malaysia together with our joint venture partner PETRONAS Chemicals Group Berhad (PCG); another plant in the USA is in the planning phase. In this segment we also run our startup PCC Thorion GmbH, which is developing an innovative material made from nano-silicon powder to increase the performance of Li-ion batteries. The basis of this innovation is our “green silicon metal”, which we produce in Iceland in a climate-friendly manner. The segment is divided into the two business areas Investment Management and Projects. In the Projects business area, we also manage our environmentally friendly small hydroelectric power plants and project companies in the renewable energies business area.

Projects

The Holding & Projects segment pools together projects at the planning and construction phase before assigning them to our operating Group segments. In this way, we relieve the operating segments of the burden of project management while at the same time leveraging experience gained by the Group management from three decades of planning and project stewardship in developing new fields of activity.

The following offers a few examples of the project management activities performed by the Holding & Projects segment:

PCC SE and PETRONAS Chemicals Group Berhad (PCG) are establishing a joint production of oxyalklyaltes (special polyether polyols and nonionic surfactants) in Kertih in the Malaysian state of Terengganu. Their 50/50 joint venture PCG PCC Oxyalkylates Sdn. Bhd. started construction work in October 2021. With this investment project, the PCC Group is expanding some of its core business areas into the growth regions of Southeast Asia and Asia-Pacific.

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PCC SE has joined forces with Fraunhofer ISE to develop a silicon-carbon composite designed to enhance the performance of lithium-ion batteries. As an anode active material, this high-tech advancement offers an energy density several times higher than conventionally used graphite, thus significantly increasing the capacity of lithium-ion batteries,

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Portfolio Management

The active portfolio management approach of PCC SE encompasses, firstly, the development of our operations and affiliates, and secondly, utilization of divestment opportunities. Our focus with regard to the development of operations is aligned in equal measure to the acquisition of new shareholdings and the leveraging of existing activities and projects. We are primarily concerned with positioning ourselves in less competitive submarkets and market niches. Our main investment engagement continues to be directed towards the developing economies of Central, Eastern and South-East Europe, although we are stepping up our activities in emerging markets on other continents, particularly Asia.

As indicated, however, PCC is also willing and able to sell operations and affiliates where disposal offers attractive gains and the funds thus released can be invested in the expansion of other core activities. The holding company will also dispose of portfolio entities where these are unable to offer satisfactory returns or fail to exhibit attractive development potential.

The following offers examples of the approach to portfolio management adopted by PCC SE:

Until June 2015, the company 3Services Factory S.A., the activities of which include operation of a data center, was allocated to the Projects business unit. In 2014, the data centre underwent its third expansion phase, achieving a significant increase in both sales and profits compared to the previous year. However, this company lies outside the core business activities of the PCC Group, and PCC SE therefore decided to dispose both of this participation and also of its minority shareholding in 3Services S.A., Katowice, the co-owner of the data centre. The closing of the sale took place as planned at the end of June 2015. This constitutes a further example of the strategy of active portfolio management adopted by PCC SE, whereby projects are developed to the point where they can also be sold on to other investors.

In June 2014, PCC SE successfully placed a minority package of shares in its Group company, PCC Rokita SA, on the Warsaw Stock Exchange, at the same time implementing a capital increase. Despite a difficult market environment, the private investor tranche was heavily oversubscribed, with the interest of institutional investors also substantial. By the end of 2014, the share price had risen by around 15% compared to the issue price of 33 złoty. PCC Rokita SA is the second Group subsidiary to be listed on the Warsaw Stock Exchange following PCC Exol SA (2012).

In December 2013, PCC SE sold 24.5 million of its shares (8.26% of the voting rights) in the surfactant manufacturer PCC Exol SA to an international investment fund. Still in possession of 87.45% of the voting rights, PCC SE retains significant majority control over this affiliate. The sale proceeds per share amounted to 2.3 times the book value. This transaction constitutes a purposeful continuation of the strategy adopted by PCC SE to create value and then to realize that value as opportunities arise.

At the beginning of 2013, the rapidly growing “PCC Consumer Products” subgroup was further expanded through the addition of participating interests and start-ups. The subgroup now has production and sales locations in Poland and Belarus together with a trading company in Russia.

In 2009, PCC SE concluded the sale of its Polish railway activities under the umbrella of the “PCC Logistics” subgroup to Deutsche Bahn AG. This divestment constitutes PCC’s biggest success to date in following its proactive portfolio management policy. Not included in the sale was PCC SE’s majority holding in PCC Intermodal SA, a company active in the dynamically growing Polish market for container transportation and destined to be further expanded in the coming years.

Our small hydroelectric power plants in the field of renewable energies

Mujada

Small hydropower plant in Bosnia and Herzegovina

Mujada

Gradečka

Small hydropower plant in North Macedonia

Gradečka

Galičnik

Small hydropower plant in North Macedonia

Galičnik

Patiška

Small hydropower plant in North Macedonia

Patiška

Brajčino

Small hydropower plant in North Macedonia

Brajčino

Investments in the Holding & Projects segment

In the Holding & Projects segment, we manage projects with high impact for the future such as our current project in Malaysia: In a joint venture with the PETRONAS Chemicals Group Berhad (PCG), we are setting up a production of oxyalkylates (special polyether polyols and nonionic surfactants). The new production facilitiy of our 50/50 joint venture PCG PCC Oxyalkylates Sdn. Bhd. has been under construction since October 2021 at PCG’s strategically located petrochemical complex in Kertih in the Malaysian state of Terengganu.

Overview of investment projects