Hungary's MOL plans to invest at least 2 billion USD over the next five years mostly in expanding production of chemicals used in the automotive, furniture and packaging sectors, the company has announced.
According to Reuters, MOL said it would invest in propylene production and propylene oxide-based polyols used in polyurethane foams used for furniture and car seats, insulation and packaging.
Chief Executive Zsolt Hernadi told Reuters that MOL aimed to reduce its dependence on producing automotive fuel under a long-term strategy that calls for buying upstream assets and selling goods and services in its petrol stations.
MOL is Central Eastern Europe's leading fuel retailer, with around 2,000 service stations. It also operates refineries in Hungary, Slovakia and Croatia and has exploration and production assets in the North Sea and countries including Pakistan, Iraq, and Russia.
MOL's capital spending target of at least 2 billion USD by 2021 is in addition to planned annual organic spending of 1.0-1.1 billion USD, the company said in an investor presentation posted on the Budapest Stock Exchange's website.
"The first phase strategic projects in petrochemicals are expected to contribute 250-300 million USD annually to our EBITDA," Hernadi said in the investor presentation.
He said customer services would account for more than 20 percent of the company's EBITDA by 2021.
MOL shares were up almost one percent at 19,000 HUF on the Budapest bourse at 0725 GMT.