On 12 April general meeting of shareholders of public limited liability company Achema has certified final accounts of the company. According to audited data, sales revenues of Achema reached EUR 397,5 million in 2018 and it was 6% lower than in 2017 when it was EUR 423,4 million. The company incurred net losses of EUR 28,9 million. “Loss-making activities have resulted from unfavourable “price scissors”, significantly increased prices of emission trading permits and other taxes hard-pressing the company”, stated Ramūnas Miliauskas, Director General of AB Achema.
In 2018, the largest manufacturer of nitrogen fertilizers in the Baltic countries manufactured 2,3 million tons of production. Comparing with 2017, when the record of output sales was reached and 2,7 million tons of production was manufactured, volumes of production of nitrogen fertilizers and other chemical products decreased in 14% last year. Traditionally the biggest part of products’ basket, more than 60%, consisted of sales of liquid fertilizers (UAN) and ammonium nitrate. Other products maintained stable positions in the market.
“We have experienced the fall in demand already at the beginning of 2018. Unfavourable weather conditions – wet autumn and beginning of winter of the last year, cold spring – have caused unfavourable conditions for crop production and decreased the need of fertilizers in main markets of Achema. Monthly prices of natural gas, contrary to the multiannual trends was increasing from April, and prices of fertilizers fell at the end of the fertilization season, therefore we decreased volumes of production during summer”, says R. Miliauskas.
Factory experiences weight of additional state added taxes
In 2018, maintenance of LNG terminal costed to Achema EUR 20,1 million, PBAT (public benefit activity tax) – EUR 5,4 million, EUR 2,6 million from which was paid for electric energy produced in own electrical power plant. Pricing of emission trading permits (ETS) also increased significantly in 2018 – from EUR 4,7 million in 2017 to EUR 12,3 million in 2018. In total, over last year the company contributed to the state budget EUR 53,1 million, EUR 8,7 million were payments to SODRA (the Lithuanian State Social Insurance Fund Board).
In 2018, the company exported its production to almost 30 countries. Sales in Baltic States accounted for 25% approximately, with about 21% of these was sold in Lithuania. The main export destinations of AB Achema: France, Great Britain, Germany, countries of Central Europe and Scandinavia. Last year the company also managed to increase its sales to Ukraine.
Part of nitrogen fertilizers reached countries of North and South American continent: USA, Canada, Argentina and Uruguay. Remaining part of fertilizers produced by Achema was purchased by buyers from Australia, Republic of South Africa and other countries of the world.
Continued investment in manufacturing renovation and environment
According to R. Miliauskas, even in difficult times the company continued constant investment in modernisation of the factory, for which EUR 11 million was allocated last year. “Ensuring of increase of efficiency of production, quality of production, customer satisfaction, safe manufacturing process and stability of activity remain as our key priorities. With consistent investments we are able to decrease influence of the part of raw materials to production costs and at the same to improve environment indicators. Plant’s pollution decreased seven times as from 2000 and despite of increased amount of the output, we maintain our indicators stable,” says R. Miliauskas.
Construction of the modern formalin unit with a capacity of up to 100.000 tons per year was finished and brought into operation last year. Investments made to this object last year is EUR 2,3 million, and the total amount of investment reaches EUR 8.9 million. Achema last year continued to implement works on modernisation of electricity distribution systems. This project, for which EUR 1,5 million was allocated last year, is partly financed by EU funds. Works for preparation of modernization of Ammonia Plant were also implemented in 2018. Amount of EUR 2,7 million was allocated for purchase of necessary equipment and performance of preparatory works. Modernisation of Ammonia Plant will be performed this year. Management and emergency protection system in Ammonium Nitrate Plant was also modernized last year for an amount of EUR 0,7 million.
Fertiliser market is difficult to predict
According to R. Miliauskas, Achema is working more stable during the first quarter of this year and manufactures more production than at the same time last year. “The demand is not yet sufficient, therefore this year also we do not work at full production capacity. The beginning of the year is much better; however, it is hard to predict what the situation will be from the third quarter when demand and prices of fertilisers decrease because of seasonality. We have a goal to close the year 2019 m. having a profit; however the final result will depend from situation on global markets of fertilisers and natural gas. And also – from implementation of promises from governmental institutions to decrease the share of Achema related to maintenance of LNG terminal”, says executive manager of Achema.
About AB Achema
AB Achema is the largest manufacturer of nitrogen fertilizers in the Baltic countries and one of the largest Lithuanian exporters. Achema also remains the biggest employer in the Jonava district. In 2018, average number of employees was 1321. The company mainly engages in the production and marketing of fertilizers (ammonium nitrate, solution of urea ammonium nitrate (UAN), calcium ammonium nitrate (CAN), urea, and LITFERT Stabillion N slow-release nitrogen fertilizer) and other chemicals for industry as well as liquid fertilizers for field crops and indoor plants.
The company has two branches: Sistematika and Achemos Poliklinika Health Centre.