Grupa Azoty plans to invest zl 1.7 billion ($450 million) to build a propylene plant at the Police division on the Baltic coast. The new 400,000 tpa facility, which is intended to begin production in 2019, should be the largest of its kind in the EU, and is expected to increase annual revenues of Grupa Azoty by around 20% to zl 12 billion ($3.2 billion) The plant could export around 60% of its production whilst another 40% will be used for consumption in oxo alcohol production at Kedzierzyn. Propylene and other chemical production data for Poland is available from the CIREC database.
Annual consumption for propylene in Poland is estimated at 150,000 tons. At present the sole producer is PKN Orlen which uses propylene for polypropylene and phenol, and sells another 120-140,000 tpa to Grupa Azoty ZAK at Kedzierzyn. Thus the Police project not only eliminates the historical deficit in propylene supply in Poland, but provides a surplus for export. Germany requires around 850,000 tpa of propylene imports, and this would provide a profitable market for Azoty. However, long term the group wishes to utilise propylene for further processing which could possibly go into polypropylene or higher margin propylene derivatives such as acrylic acid.
The project in Police is to be based on PDH technology. The idea for this installation came from ZAK around five years ago, where propylene supply has traditionally been dependent on imports or domestic merchant purchases for the production of oxo alcohols. The cost of imports is around zl 500 million per annum. The new plant is not being located at Kedzierzyn as Police offers better possibilities for propane delivery.
The plant will be controlled as a subsidiary of Grupa Azoty, comprising shares belonging to both Police and ZAK division. An agreement on the new company formation and the chosen technology will be made in the next month. Funding is expected to come from international financial institutions. Construction should start in 2016 and be completed by the end of 2018.
The new plant, which is to increase the revenue of Grupa Azoty by approximately zl 2 billion per annum, which is double the current revenues of Grupa Azoty Police. The profitability of the company through this investment is expected to increase by around 10%.
The construction of the installation will require about a thousand people, and once completed the plant should employ around 200 people permanently. Of the total zl 1.7 billion investments around zl 1.4 billion is targeted on the installation, and the remainder allocated for the construction of the power unit and the expansion of liquid chemical terminal. Ultimately, the terminal will support Poland's largest LPG supply ships, increasing twice its operational capabilities.