Article in Milano Finanza
Translation by ChatGPT
CHEMICALS – Among the pioneers of bioplastics, the group has been closing its books in the red for three years now, accumulating losses of €130 million. The latest blow has just come from the Antitrust Authority with a €32 million fine.
The Rise and Fall of Novamont
That hefty €32 million fine, recently imposed by the Antitrust Authority for abuse of dominant position in the bioplastic bag market, comes at the worst possible time for Novamont—the historic company from Novara that invented Mater-Bi and has been controlled since the end of 2023 by Versalis, the chemical arm of Eni.
According to the Competition Authority, which launched its investigation a year ago, Novamont gradually established a near-monopoly in the biodegradable plastic bag market, enforcing exclusive agreements with large-scale retail chains (GDO) that sidelined other market players.
According to the AGCM (Antitrust Authority), between 2018 and 2023 the company held a market share of over 50% in the shopper bag sector and even over 70% in the fruit and vegetable bag segment.
The company, founded in the 1990s as a spin-off from Montedison—which, under Gardini, dreamt of green chemistry—responded with dismay, contesting the Antitrust’s findings and fine.
What appeared 30 years ago as a Copernican ecological revolution in the world of plastics has gradually faded.
Despite becoming the dominant player in the Italian market, as stated by the Antitrust, Novamont’s business did not achieve the breakthrough that had been expected.
The company, still led by its historic founder Catia Bastioli, has just come through three very difficult years. Since 2022, the group—which employs 480 people—has only been generating losses.
In 2024, it recorded losses of €43 million. The year before, €66 million, and in 2022, €26 million. In total, it has accumulated over €130 million in losses.
Moreover, in 2021 Novamont had to record an impairment of equity investments amounting to €151 million.
Revenue has been declining: from €360 million three years ago to €265 million now. The blame lies with price pressures that are eroding margins—according to the company, due in part to an influx of lower-quality imported products from non-EU countries, especially China.
Another factor is the European regulatory framework, which does not allow the full expansion of the bioplastics market.
Adding to this have been the high energy costs following the Russia-Ukraine conflict. The green dream meant to revolutionize the traditional fossil-based plastics industry—replacing it with plastics made from plant-based starches—has stalled halfway.
In recent years, industrial margins have collapsed, with costs exceeding sales revenues, leading to losses already at the EBITDA level and even more so at the EBIT level.
Even in better times, Novamont never shone for profitability. In its best years, its operating profitability never exceeded 10% of revenue.
Then came the bitter chapter of failed joint ventures. Like the one with Versalis/Eni in Matrica—the company founded in 2011 to convert the Porto Torres petrochemical plant to green chemistry—which effectively failed. Novamont had to completely write down the value of the project, leading to a long legal dispute with Eni.
That dispute was settled through a settlement agreement, which allowed Versalis—already a 35% shareholder in Novamont—to acquire 100% of the company in 2023 without any financial outlay.
The previous shareholders—Investitori Associati and NB Renaissance, gathered under the Mater-Bi holding—were the ones who ceded the company to Eni’s chemical arm.
In the end, Eni recorded the full value of Novamont at €631 million on its books. Arguably, the sellers may have struck the better deal, given that this valuation seems quite high for a company still operating with negative margins.
Now it’s up to parent company Eni to find a way to restore profitability, which has been negative for three years.
For Versalis, Eni’s chemical division, Novamont is certainly not the most strategic asset. Still, it has provided its subsidiary with loans totaling €195 million at an interest rate of 2.46%.
Versalis itself is not in great shape: over the past three years, it has accumulated net losses of over €2.8 billion, with revenue dropping from €6.2 billion to €4.2 billion.
There’s been talk of potentially bringing minority investors into Novamont’s capital.
Related Content
Eni and Novamont have been condemned for unfair commercial practices in Italy by the Italian antitrust authorities. They have been condemned for unfair commercial practices in the bioplastics and biofuel sector. More info on these (external) links.
- Antitrust Imposes Over €32 Million Fine on Novamont and Eni for Dominant Position in Biodegradable (Bioplastic) Bag Market
- Novamont market abuse scandal in the Italian Press
- ENI biofuel cartel (338 Mln EUR)