Polish capro, PVC and fertilizer firms cut output

20 November 2008 12:16  [Source: ICIS news]

By Will Conroy

PRAGUE (ICIS news)--A range of Polish companies have cut production rates at their polyvinyl chloride (PVC), caprolactam and fertilizer plants in response to recession-hit demand, the firms said on Thursday.

Anwil, owned by Polish state oil, chemical and petrochemical giant PKN Orlen, said it had reduced production of its PVC unit by 30% with immediate effect.

Czech Anwil subsidiary Spolana said it was applying the same reduction to its PVC line and was also cutting its caprolactam production by one third.

Anwil and Spolana make up the largest PVC supplier in central and eastern Europe with a combined capacity of around 435,000 tonnes/year. Spolana's caprolactam capacity is 40,000 tonnes/year.

Following on from a statement from Polish natural gas monopoly Polish Oil & Gas Company (PGNiG) that its natural gas sales to chemical companies in October were 7-10% less than ordered, Poland's largest nitrogen fertilizer producer Zaklady Azotowe Pulawy (ZAP) said it had applied a 30% reduction to its fertilizer and caprolactam production segments.

The company's range of fertilizers have an overall capacity of more than 4.5m tonnes/year, while its caprolactam output potential is 65,000 tonnes/year.

ZAP added that there was as yet no demand reduction to convince the company to lower its melamine output of 92,000 tonnes/year.

Poland's second largest fertilizer producer Zaklady Chemiczne Police (ZChP) said that it had gradually been reducing the production rates of its fertilizer units since September, in line with the traditional seasonal product demand fall-off at the end of the year.

However, ZChP commercial director Slawomir Winiarski said that the world economic crisis had accelerated the reduction in production, meaning that the units were by now all working at only 30% of capacity.

Chemical producer Zaklady Azotowe Tarnow (ZAT) said it decided on Tuesday that it could maintain full fertilizer production on existing ammonia stocks but that a one-fifth output reduction should be introduced on its caprolactam and construction plastic lines.

Zaklady Azotowe Kedzierzyn (ZAK) said as yet unspecified cuts would be ordered for its oxo alcohols unit.

“Prices of commodity chemicals have declined sharply over the last two months - some of them are down as much as 70%,” said Barbara Zaleska, an analyst at investment bank Wood & Company, in a commentary on the cuts.

“For some products these declines occurred at low trading volumes as trade has virtually frozen, so the production cuts were inevitable. While the situation on the fertilizer market is expected to improve once we enter the northern hemisphere farming season in early 2009, it may take time until demand for other chemicals recovers, as it is related to the slowdown in client industries, the construction and automobile industries being among them,” she added.

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By: Will Conroy
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