Acron Group Releases 2011 Operating Results

OREANDA-NEWS. January 25, 2012. Group’s Consolidated Output (Operating Results for Acron, Dorogobuzh and Hongri Acron).

Comments:

In 2011 the Group’s total commercial output was up 4.9% year-on-year to 5,821,600 tonnes, record high for the Group’s history. This increase was due to the Group’s balanced industrial policy aimed at continuous revamping and developing production facilities.

Nitrogen Fertilisers and Ammonia

In 2011 the Group’s ammonia output increased 2.8% and nitrogen fertiliser output rose 7.3% year-on-year. Demand for all nitrogen fertilisers remained strong in 2011 which allowed Acron and Dorogobuzh to maintain maximum utilisation of their production facilities. The Group’s nitrogen fertilisers are in great demand both in Russia and in Asia, North and Latin America.

In H1 2012 Acron intends to commission a new urea facility with the production capacity of 330,000 tonnes per year which will enable the Group to boost urea and UAN production already this year.

Complex Fertilisers

In 2011 the environment of the complex fertiliser world market remained favourable. Due to this, all production facilities of the Group operated at high utilisation level and raised output 6.5% in this segment, including 20% increase in the output of bulk blends.

The Group succeeded in promoting its brand product NPK 16-16-16 in emerging markets of Asia and Latin America in the reporting year. In 2011, shipment of complex fertilisers to Thailand increased by the factor of 1.5, and supplies to Brazil more than tripled.

Organic and Non-organic Compounds

The Group posted higher output of industrial products which went up 8.4% in this segment (1,011,400 tonnes).

Due to recovery of demand for low-density and technical-grade ammonium nitrate on the part of industrial consumers (mining companies), the Group’s Russian facilities increased its output 37.2% year-on-year.

Given the recovery of the Russian wood processing industry, urea-formaldehyde resin output was up 12.4% to 176,500 tonnes.

Mineral Fertiliser World Market and Prices

In 2011 the fertiliser world market was favourable for producers. The global demand completely recovered following the 2008/2009 crisis which made producers boost output volumes to meet the increased demand for fertilisers. Prices of all types of fertilisers continued growing all through the year. However, in late Q4 the market underwent sharp correction caused by seasonal factors and temporary glut of supply on the market. In early 2012 prices partially recovered and stabilised. In 2012 the balance between demand and supply in the world market is expected to remain favourable for fertiliser producers.

Average indicative mineral fertiliser world prices (USD/t)