Acron Releases 2009 Operating Results

OREANDA-NEWS. January 25, 2010. Acron Released 2009 Operating Results.

Group’s Consolidated Output (Operating Results for Acron, Dorogobuzh and Hongri Acron)

Comments:

In 2009, Acron’s total commercial output was up 11% year-on-year to 5.1 mn tonnes. Commercial output of ammonia and mineral fertilisers rose 17% year-on-year to reach 4.3 mn tonnes. The Group achieved these impressive results by optimising its product range and making significant investment in technical upgrades in recent years.

In 2009, Dorogobuzh boosted commercial output by 48%. This increase was mainly due to stable operation of all the facility's units in the reporting year, (by contrast, in 2008 Dorogobuzh experienced lengthy operating interruptions caused by short raw materials supplies, major overhauls and weak demand in the wake of the global financial and economic crisis). Moreover, modernisation of Dorogobuzh’s ammonium unit in H2 2008 expanded its capacity and dramatically increased efficiency, allowing Dorogobuzh to report peak operating results.

Straight Nitrogen Fertilisers and Ammonia

In 2009, strong demand for nitrogen fertilisers required that the Group’s facilities utilise their urea and ammonium capacity to the maximum. The Group’s consolidated ammonia output was almost 1.7 mn tonnes, a record in the Group’s history. The Dorogobuzh facility’s ammonia and ammonium nitrate units also performed at an all-time high. When demand for liquid UAN picked up in the second half of 2009, the Veliky Novgorod facility was able to increase its output by 20% year-on-year.

Complex Fertilisers

The global market for complex fertilisers did not display uniform demand in the reporting year; nevertheless, the Group’s consolidated output rose 6% to 2.1 mn tonnes. This production increase was solely due to the Dorogobuzh facility. The Veliky Novgorod facility reduced its output of complex fertilisers 6%, and Hongri Acron’s output of complex fertilisers was down 4%. July’s interrupted potash supplies had a slight impact on complex fertiliser output at Acron’s Russian facilities.

Organic and Inorganic Synthesis Products

The Group’s output of industrial products was down in the reporting year. In 2009, demand for industrial goods failed to recover completely from the consequences of the global financial and economic crisis. As a result, the Group reduced its output of organic synthesis products by 41%.

Lower methanol output for the year was mainly caused by Hongri Acron’s suspension of methanol production as a response to adverse pricing conditions in China. Furthermore, reduced demand in the Russian woodworking industry also resulted in lower methanol output and processing at the Novgorod facility.

Inorganic synthesis products were down 6%, mainly due to lower output of technical-grade ammonium nitrate. However, this decrease was offset by higher output of agricultural ammonium nitrate.

The Group’s total output of industrial organic and inorganic synthesis products was down 12% year-on-year to 0.8 mn tonnes.

Market Review and 2010 Outlook

After a sharp slump in fertiliser production and prices in late 2008, the global market for nitrogen and complex fertilisers recovered completely by H2 2009; demand strengthened and world prices experienced a slight uptick. In 2010, strong demand for fertilisers is expected in the Group’s major sales markets as the global economy recovers. The recovery will allow the Group’s facilities to operate their ammonia and fertiliser capacity at maximum levels.

While recovery in the organic and inorganic synthesis products segment is proceeding at a slower pace, Acron is still making concerted efforts to develop this line of business. In 2010, Acron expects to increase methanol output and processing.