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Further problems at Grupa Azoty. Melamine production suspended

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Grupa Azoty, which produces nitrogen and multi-component fertilizers, is suspending melamine production, the company announced. The raw material is used by the furniture and paper industries, as well as manufacturers of household goods and dishes. As indicated by the company, the reason is primarily the high cost of gas and the purchase of CO2 emission allowances.

“The costs associated with the basic raw material – natural gas and with energy in terms of emission prices are currently the biggest challenge. The reference point in this case are producers from outside the European Union, who do not have to incur such high costs” – Grupa Azoty Zakłady Azotowe “Puławy” reported in a statement, informing about the suspension of melamine production.

The first restrictions on melamine production began in early July 2022. Grupa Azoty Puławy is the only producer of this raw material in Poland. Recently, its production in Grupa Azoty Puławy was carried out only on one of the three lines – Melamine III. It was resumed in February 2024. The Melamine II line was also renovated.

“The goal is to balance the costs of emissions”

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The company said that production is to be resumed when the market can obtain an acceptable price for melamine, in relation to the level of production costs. It also assured that it has secured an operational stock of melamine, of which it is the only producer in Poland.

– Unfortunately, production costs remain a challenge, and specifically the competitive conditions in which the chemical industry operates in Europe. This is primarily import from Chin, USATrinidad, i.e. destinations where CO2 regulations do not apply, hence there is no need to purchase emission allowances. Thus, local producers are eager to direct their products to the European market – said Vice President of Grupa Azoty and President of the Puławy plant Hubert Kamola, quoted in the company's press release.

He emphasized that, taking into account all these factors, it is of fundamental importance to conduct talks and take action to include provisions on melamine in the regulations within the framework of CBAM (Carbon Border Adjustment Mechanism, the EU duty on carbon footprint – ed.). – The goal is to balance the costs of emissions – this is a task for the near future – assessed Kamola.

As Grupa Azoty also informed, the company is analysing all fixed costs, and initial initiatives regarding the optimisation of fixed costs and investment initiatives improving indicators are already being developed.

No discharge for Grupa Azoty Puławy

At the end of June, the Ordinary General Meeting of Grupa Azoty Zakłady Azotowe “Puławy” was held. No resolutions were passed on granting discharge for 2023 to the former management board of the company. This includes former president Marcin Kowalczyk and former vice-presidents: Paweł Bryda, Jacek Janiszek, Justyna Majsnerowicz, Renata Tyszer.

The general meeting also did not pass a resolution on granting discharge to the former chairman of the supervisory board of the company Piotr Regulski and former vice-chairman Krzysztof Majcher. The representatives of the board: Marcin Szewczak, Paweł Kowalczyk and Marcin Szewczak also did not receive acknowledgments.

Grupa Azoty Zakłady Azotowe “Puławy” SA has been a part of the Grupa Azoty capital group since 2012 – a joint-stock company listed on the Warsaw Stock Exchange, in which the State Treasury holds 33 percent of shares. The company ranks second in the European Union in the production of nitrogen and multi-component fertilizers. It is the only producer of melamine in Poland. It also produces such products as: polyamide, OXO alcohols, plasticizers and titanium white. Zakłady Azotowe “Puławy” has been operating since June 4, 1966. Currently, the company employs over 3.4 thousand people.

Main image source: TVN24

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