High gas costs may force Romania’s Azomures to shut ferts units

08 April 2014 14:05 Source:ICIS News

BUCHAREST (ICIS)--Romanian fertilizer company Azomures risks having to cease production at its plants if the government cannot find a solution for subsidising natural gas prices, the company said on Tuesday.

“The government has to clarify the situation of subsidies for big gas consumers with the European Commission. Otherwise, we will not be able to face the gas prices and will have to be closed down in the coming two weeks,” said Azomures general manager Mihai Anitei.

He added there is no reference price for a free market or mechanisms for it, and in this context, Azomures cannot negotiate with producers. Some 2,500 workers could lose their jobs, Anitei added.

Azomures said it is facing a “dramatic situation” following the gas price liberalisation. In November 2010, the Romanian government decided that discounts given to local fertilizer producers on natural gas prices from domestic production would be cut.

Natural gas prices have a big impact on Azomures' performance - Prices for the company's finished products rose on average 47% in January 2014 year on year.

Romania produces around 13bn cubic metres of gas a year - about 60% of its annual needs. It imports the rest, mostly from Russia.

Azomures delivers around 400,000 tonnes/year of fertilizers, or around 30% of its production, to the Romanian market, with the rest being exported. It is 96.43% owned by Swiss grain and fertilizer trader Ameropa Holding.

Azomures’ ammonium nitrate (AN) and calcium ammonium nitrate (CAN) units can each produce about 300,000 tonnes/year. The company also produces urea, complex nitrogen phosphorus potassium (NPK) fertilizers and melamine.

By Marian Chiriac