27 September 2013 11:51 [Source: ICIS news]
LONDON (ICIS)--Polish producer Grupa Azoty must contend with growing competition from Asian countries seeking production self-sufficiencies, an equities house said on Friday.
Placing a ‘Sell’ rating on the shares of the chemical and fertilizer company, Poland’s Dom Maklerski BZ WBK said Grupa Azoty, along with European peers, was facing increasing export difficulties caused by this trend.
“We fear that the pursuit of self-sufficiency in Asian countries with regard to chemical products could lead to a decline in the profitability of the chemical industry in Europe,” DM BZ WBK said in a note to investors on Grupa Azoty’s prospects.
Structural market changes caused by new Asian production capacities were affecting supply and demand dynamics in key markets, it added.
In July, a Grupa Azoty source revealed the company had scrapped plans to build caprolactam (capro) production capacity in China or Taiwan after being put off by a large-scale increase in China’s capro capacity, with some 600,000 tonnes/year having been brought on stream in the country last year alone.
As well as capro and a range of fertilizers, state-controlled Grupa Azoty produces polyamide 6 (nylon 6), melamine, titanium dioxide (TiO2) and oxo-alcohols. It is Poland's largest chemical group and the second largest producer of fertilizer in Europe.
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