Biochemical firm plans London listing after shares jump in Warsaw

Thu Aug 7, 2014 10:17am EDT

* Boruta-Zachem looks to London's AIM stock market

* To make compounds for household cleaners from rapeseed

* Also looking to add business in nano-dressings

By Jakub Iglewski

WARSAW, August 7 (Reuters) - Polish biochemical company Boruta-Zachem aims to list in London as soon as September after its shares have risen by more than four times in the month since its debut on the Warsaw bourse, valuing it around $90 million.

The company, which currently makes dyes and pigments, plans to use some of proceeds from a London share offering to build a new product line in bio-surfactants, a compound used in household cleaning products and cosmetics, to start next year.

The market for these compounds, dominated by big players such as AKZO Nobel and Dow Chemical, is set to grow from around $20 billion to $36 billion over the next few years, Marcin Pawlikowski, the company's deputy chief executive said in an interview.

Boruta-Zachem, furthermore, aims to make a bio version of surfactants from rapeseed, a more environmentally friendly process than making synthetic surfactants from petroleum.

"I think this market has a huge potential, and I expect that biosurfactants will be gradually crowding synthetic surfactants out of it," Pawlikowski said.

The Polish company also aims for low-cost production. Its facilities are based in Bydgoszcz, a region known for rapeseed cultivation and close to Poland's largest vegetable oil production plant - ZT Kruszwica.

"There are other companies that produce biosurfactants, which are much more expensive than synthetic surfactants," Pawlikowski said. "Our method ... enables us to produce biosurfactants at the same price and with similar quality."

NEW FUNDS

Boruta-Zachem is now considering either a private share sale or a public offering on the London Stock Exchange's AIM market.

Pawlikowski said it had picked an adviser but declined to specify the size of the offering or provide other details.

The Polish company debuted on Warsaw's NewConnect small-cap market only last month.

"Many investors in Poland were interested in our shares, but they could not offer a price that would satisfy us. Thus we want to look for capital abroad," Pawlikowski said.

Boruta-Zachem plans to use the proceeds also to finance takeovers of rival biochemical companies as well as research and development projects.

Besides biosurfactants, Boruta-Zachem plans to start producing nano-dressings in 2016 for use in treatment of hard-to-heal wounds caused by diabetes, an alternative to current wound dressings with antibiotics.

"There will be no antibiotics, so the wound will not immunize itself against the healing agent," Pawlikowski said. "Our dressing will not breach the wound while being taken off, so it will be more comfortable for users."

It is also hoping to tap into European Union financing for small and medium-sized firms that invest in innovation.

(1 US dollar = 3.1375 Polish zloty) (editing by Jane Baird)