Polish fertilizers and chemicals group Grupa Azoty AS is stepping up its fertilizers and chemicals production across three of its business units amid falling natural gas prices on European markets and “a more promising” demand outlook, according to a Polish Press Agency (PAP) report, citing a company statement.
Azoty said production capacities will be “fully restored” at the Tarnów production site by June 27 once the cyclical planned renovation and maintenance work is completed.
At its Kędzierzyn-Koźle subsidiary, Azoty will start increasing utilization of production capacities in the agro business unit to 100% starting June 1, while also noting the unit will undergo a planned renovation and maintenance stoppage on June 17, according to the report.
The company’s Puławy subsidiary already has started to increase production of fertilizers and chemicals, with output increasing by “over 100%” as of June 1, Azoty was cited as saying.
In April, Azoty recorded a 44% decline in nitrogen fertilizers production to 176,000 mt in April, down from the year-ago 312,000 mt, while production of “multi-component” fertilizers fell by 63% to 30,000 mt, as the group aimed to bring output in line with market demand (GM May 19, p. 5).
Azoty’s nitrogen fertilizer production capacities at Tarnów, Kędzierzyn-Koźle, and Puławy, according the Green Markets’ database include:
| Unit | Product | Capacity million mt/y |
| Tarnów | Ammonia | 0.31 |
| Kędzierzyn-Koźle | Ammonia | 0.5 |
| Urea | 0.17 | |
| AN | 0.59 | |
| UAN | 0.1 | |
| Puławy | Ammonia | 1.24 |
| Urea | 1.19 | |
| AN | 0.92 | |
| UAN | 1.2 |
News of the production step-up follows a warning by the Polish group last month that it may breach debt covenants at the end of the second quarter (GM May 26, p. 26; May 19, p. 5).
Azoty reported a net loss attributable to shareholders of the group of Pln522 million (approximately $122.9 million at current exchange rates) for the first quarter ended March 31, 2023, and has said it likely will exceed the 4.0x net debt to EBITDA level allowed in covenants at the end of the first half of this year (GM May 26, p. 26).
While the Polish group said it hopes to reach an agreement on the covenant breach with financing institutions, reports have been circulating that it may need to sell its prized Puławy subsidiary to PKN Orlen to improve its financial standing. The Puławy unit production includes ammonium nitrate and urea, as well as caprolactam and melamine, and is the Azoty group’s most profitable entity.