In 2017, the income of AB Achema reached 423.4 million euro and was 18% larger than in 2016 (359.3 million euro), however, due to a significant increase in the prices of raw materials and the tax for LNGT, the results were not as good as expected.
In 2017, the largest factory of nitrogen fertilisers in the Baltic States produced 2.714 million tons of production. In comparison with 2016, last year the production capacity of nitrogen fertilisers and other chemical products increased by 20% (in 2016, it was 2.254 million tons).
‘Although the market of fertilisers, constantly fluctuating and dependent on climatic conditions, is challenging and often disproves any forecasts, thanks to combined forces and the introduced modernisation, the company managed to achieve positive goals. Traditionally, the major part of product basket, over 60%, is comprised of the sales of liquid fertilisers (KAS) and ammonium nitrate. The rest of the production remains stable in the market, and we also see a gradually growing demand for new products in the market,’ says Ramūnas Miliauskas, Director General of AB Achema.
The production reaches not only Europe, but also South America, Australia, and even South Africa
In 2017, the company’s export map expanded to more than 30 countries. Sales in the Baltic States amounted to about 26% (of which 21% in Lithuania). France, Great Britain, Germany, Central Europe, and Scandinavian countries remain the main export markets of Achema (62% of sales in 2017). Last year Ukraine was a new direction for exporting nitrogen fertilisers, as more than 3% of the production was exported there.
In 2017, over 5% of nitrogen fertilisers reached the continent of North America: the USA and Canada. The rest of Achema’s fertilisers were purchased by buyers from all over the world. The list of buyers includes Spain, Argentina, South Africa, Australia, Costa Rica, Mozambique, New Zealand, etc.
In the European Union AB Achema sells the major part of its production through authorised representatives: Litfert s.a.r.l. in France and Belgium, Liteximp sp. z.o.o. in Poland, Agro Baltic GmbH in Germany and the Netherlands, UAB Agrochema in Lithuania, Latvia and Estonia. In Scandinavian countries the fertilisers are sold directly to the cooperatives of farmers. In other markets the fertilisers are sold through wholesalers.
Continuing investments in the upgrade of production and the protection of environment
Last year the company invested about 14 million euro in the upgrade of production. Most of it, almost 5 million euro has been invested in a new formalin aggregate the construction of which is planned to be completed by the end of summer 2018.
The company is also consistent in continuing the modernisation of the energy system; the renewal of co-generation plant J-2 for 3.4 million euro has been completed. Also, the modernisation of the electricity distribution system financed partly by the European Union funds (project scope EUR 3.95 million) is being continued. Over the past year, 1.8 million euro has been invested. The project is planned to be completed in 2019.
‘Our main priorities remain to ensure production efficiency improvement, production quality, customer satisfaction, safe production process and operational stability,’ says Ramūnas Miliauskas, Director General of AB Achema. ‘Through constant investments, we can reduce the influence of raw materials on the cost of production and, at the same time, improve our environmental performance, for example, the plant’s pollution has decreased by 7 times since 2000, and despite the higher production we maintain stable rates.’
The taxes reached 43.7 million euro
AB Achema remains the largest workplace in Jonava region. In 2017, the average number of employees was 1,336.
Over the past year, the company contributed to the State budget by 8.1 million euro. Contributions to SODRA (Social Insurance) made 9.5 million euro.
The company continues to incur significant costs for the maintenance of energy infrastructure. In 2017, the maintenance of LNG terminal cost nearly 20 million euro, VIAP cost 6.1 million euro, of which 4.1 million euro for electricity produced in our own electricity plant.
Last year the cost for emission allowances also increased significantly – 4.7 million euro, while in 2016 it was 2.8 million euro.
The market of fertilisers is changing
‘Due to extremely rainy summer and autumn last year we have noticed that the demand for fertilisers dropped significantly at the beginning of the year. It has refuted all the analysts’ forecasts, which predicted stability in the market,’ says Ramūnas Miliauskas, Director General of AB Achema.
Currently, the analysts of fertiliser market predict that in 2018 the prices in global nitrogen fertiliser market will be slightly higher than in 2017. According to statistics, global demand for nitrogen fertilisers is growing by an average of 2% per year; therefore, in order to meet the demand growth, it is necessary to add 4 million tons for new nitrogen fertiliser production capacity per year. It is planned that the average capacity of new capacities in 2018-2021 will reach only about 3 million tons per year.