28 January 2020
Acron Group Posts 2019 Output of 7.5 Million Tonnes
Group’s Consolidated Output
(including operating results for Acron, Dorogobuzh
and North-Western Phosphorous Company)
|Product, ‘000 t||2019||2018||YOY, %|
|Incl. in-house consumption*||2,291||2,178|
|Nitrogen fertilisers, including||4,933||4,235||16.5%|
|Incl. in-house consumption||1,127||958|
|Incl. in-house consumption||408||355|
|Incl. in-house consumption||719||602|
|Complex fertilisers, including||2,026||2,519||-19.6%|
|Incl. in-house consumption||36||44|
|Incl. in-house consumption||36||44|
|Total commercial output for Mineral Fertilisers||6,087||6,190||-1.7%|
|Organic synthesis products, including||485||475||2.1%|
|Incl. in-house consumption||248||239|
|Incl. in-house consumption||91||87|
|Incl. in-house consumption||155||151|
|Incl. in-house consumption||2||1|
|Non-organic compounds, including:||842||824||2.1%|
|Low-density and technical-grade AN||189||170||11.3%|
|Liquid carbon dioxide||48||55||-13.1%|
|Total commercial output for Industrial Products||1,079||1,060||1.8%|
|Incl. in-house consumption||792||950|
|Total commercial output for Apatite Concentrate||292||264||10.9|
|TOTAL COMMERCIAL OUTPUT||7,458||7,514||-0.7%|
Note: Commercial output is output less in-house consumption.
Comments from Chairman of Acron’s Board of Directors Alexander Popov:
“In 2019, Acron Group’s total commercial output remained unchanged year-on-year at 7.5 million tonnes. The Group faced serious engineering challenges. We significantly upgraded the ammonia unit at our Dorogobuzh production facility, increasing its capacity by over 100,000 tonnes per annum. While implementing this project, we faced several technical complexities that delayed the unit’s relaunch and resulted in lower commercial output year-on-year at the Dorogobuzh site. In December 2019, these issued were ironed out, the project was finalised, and now the daily output has increased to 2,030 tonnes from 1,700 tonnes. We expect to reach the design capacity of 2,100 tonnes per day shortly and will seek reserves to increase capacity while maintaining the sustainability of operations.
“Unlike Dorogobuzh, our Acron (Veliky Novgorod) production facility increased its output with the commissioning of two new nitric acid units of 135,000 tonnes per annum each and higher output at the existing AN and NPK units (up 250,000 and 70,000 tonnes per annum, respectively). Now, we are finalising construction of another nitric acid unit that will be brought on stream in the short term. In 2020, we will continue implementing ongoing investment projects at Novgorod-based Acron. We plan to complete construction of a 700,000-tonne per annum urea granulation unit, finalise upgrades to the Ammonia-4 unit that will increase its capacity by 70,000 tonnes per annum, and expand the capacity of Urea-6 by 520,000 tonnes per annum.
“The year 2019 was challenging for the Oleniy Ruchey mine, as they started extracting ore from the underground mine and the effectiveness of open-pit mining declined. In Q1 and Q2 2019, the mine’s apatite concentrate output decreased temporarily, recovering to the normal level in Q3-Q4 2019. However, this factor caused a decrease in the Group’s NPK output.
“We are starting 2020 with confidence that our achievements and ongoing projects will help us set new operating records. Our plan is to produce 8 million tonnes of commercial products this year”.
In 2019, Acron Group’s consolidated commercial output was down 0.7% year-on-year to 7,458,000 tonnes. This decrease was due to a controlled shutdown of the ammonia unit at Dorogobuzh for upgrades in Q4 2019, which caused a decrease in output of ammonia and ammonia-based products. This project was completed in late 2019, and the unit was restarted with increased capacity.
In 2019, Acron Group’s nitrogen fertiliser output was up 16% to 4,933,000 tonnes. Agricultural-grade AN output increased 8% to 1,951,000 tonnes due to higher output of nitric acid feedstock. Agricultural-grade urea output was up 23% to 1,253,000, supported by the commissioning of a new urea unit in November 2018 and technical upgrades to existing capacity. Technical-grade urea production was up 10% to 131,000 tonnes, as well. With an increase in urea solution output, the output of UAN based on this solution was up 22% to 1,729,000 tonnes. In early 2020, the Group plans to complete the construction of a urea granulation unit, which will improve the Group’s flexibility in the distribution of production volumes between AN, urea and UAN in response to the market environment, increasing the profitability of ammonia processing.
In 2019, the Group’s complex fertilisers output was down 20% to 2,026,000 tonnes, with a 30% decrease in bulk blends production to 133,000 tonnes as their output at Dorogobuzh declined in response to changes in regional demand. However, the Acron (Veliky Novgorod) production facility increased its production of bulk blends with the launch of a new unit producing brands that are popular on the international markets. NPK output at the Group’s facilities was down 19% to 1,892,000 tonnes due to a temporary dip in supplies of apatite concentrate from the Oleniy Ruchey mine. The temporary decrease in apatite concentrate output in Q1 and Q2 2019 was caused by the large-scale overburden operations and low phosphate grade of the ore at this stage of the underground mine’s development. As early as Q3 2019, apatite concentrate production volume recovered.
In Q4 2019, demand for urea was weak in several regions, pushing down prices. Buying activity was under pressure from unfavourable weather conditions. Additionally, several potential customers chose to postpone purchases in anticipation of a price drop. As a result, in early 2020 inventories on key markets were low. It is expected that this factor, along with high seasonal demand in the United States and Europe, will support a price recovery in Q1 2020.
With the decrease in urea prices, average AN and UAN prices were down as well in Q4 2019. The price of NPK was under pressure from the individual prices for nitrogen, phosphate and potash fertilisers, but it declined less than those products, with the NPK premium over the basic product basket over 20%.
Average Indicative Prices, USD/t, FOB Baltic/Black Sea
|Q4 2019||Q3 2019||Q4 2018||Q4 2019 / |
|Q4 2019 / |
Phone: +7 (495) 777-08-65 (ext. 5196)
Phone: +7 (495) 745-77-45 (ext. 5252)
Acron Group is a leading vertically integrated mineral fertiliser producer in Russia and globally, with chemical production facilities in Veliky Novgorod (Acron) and the Smolensk region (Dorogobuzh). The Group owns and operates a phosphate mine in Murmansk region (North-Western Phosphorous Company, NWPC) and is implementing a potash development project in Perm Krai (Verkhnekamsk Potash Company, VPC). It owns transportation and logistics infrastructure, including three Baltic port terminals and distribution networks in Russia and China. Acron’s subsidiary, North Atlantic Potash Inc. (NAP), holds mining licences for 11 parcels of the potassium salt deposit at Prairie Evaporite, Saskatchewan, Canada. Acron also holds a minority stake (19.8%) in Polish Grupa Azoty, one of the largest chemical producers in Europe.
In 2018, the Group sold 7.3 million tonnes of various products to 67 countries, with Russia, Brazil, Europe and the United States as key markets.
In 2018, the Group posted consolidated IFRS revenue of RUB 108,062 million (USD 1,723 million) and net profit of RUB 13,318 million (USD 212 million). Acron’s shares are on the Level 1 quotation list of the Moscow Exchange and its global depositary receipts are traded at the London Stock Exchange (ticker AKRN). Acron employs approximately 11,000 people.
For more information about Acron Group, please visit www.acron.ru/en.