Letter from the President of the Management Board

Ladies and Gentlemen,

on behalf of the Management Boards of the Grupa Azoty Group companies, we present to you our integrated report for 2020. 

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The twelve months of 2020 were full of new challenges, mainly caused by the COVID-19 pandemic. However, in this strenuous environment we delivered strong financial performance, one contributor being the consistent implementation of our business diversification strategy. At the same time, we continued to face all the previous challenges related to fostering a change in environmental attitudes and the broad climate and energy transition. At the Grupa Azoty Group, we fully understand that changes promoting climate protection require involvement of the business community. Just to give some numbers demonstrating the specific efforts we make towards this goal: in 2020 alone we achieved a year-on-year reduction of 10% in our energy generation fuel requirement, of 20% in emissions of greenhouse gas nitrous oxide, of more than 17% in PM 2.5 emissions, and of 5% in waste volumes.

Reduction of greenhouse gas emissions, implementation of decarbonisation solutions as well as all issues related to the European Green Deal in general require fast and prudent action. Equally important for doing business and communicating with stakeholders is the need to prepare for the new taxonomy requirements. We are facing a difficult but important period of transition and continued value creation in line with the principles of sustainability. We are ready for these changes because we understand that by lowering our emissions we improve our competitive edge and gain new business opportunities. The details of specific projects are presented in the Grupa Azoty Group Strategy for 2021−2030.

The success of the Grupa Azoty Group would not be possible without innovation. We know and understand how much value and market advantage can be derived from research and development. In 2020, we launched the construction of a modern Research and Development Centre in Kędzierzyn - Koźle, as we want to give our experts and scientists access to the best technologies and world class equipment. This is the only way to advance and continue to set trends for the chemical industry.

The Agro Fertilizers segment remains the key business area of the Grupa Azoty Group, and one of the key tasks is education and support for farmers and food producers. We know the opportunities they are presented with. We also know their needs and the challenges posed to farmers, but also to us, by the European Green Deal. Our objective is to introduce fertilizer formulas that will ensure effective achievement of production targets by farmers in compliance with the applicable environmental regulations.
One of the key and noteworthy projects completed in 2020 was the successful start-up of a new granulated fertilizer plant at Grupa Azoty Puławy, and specifically the launch of the first mechanical granulation production line, complete with logistics facilities, with an annual production capacity of 400,000 tonnes of ammonium nitrate or, alternatively, 466,000 tonnes of calcium ammonium nitrate. The construction of the second production line with the same capacity is in progress. The two lines can produce more than 800 thousand tonnes of fertilizers per year and are our response to growing demand from large-scale agriculture. The second production line is expected to be commissioned in the first half of 2022. Work is also under way on Polimery Police, the largest chemical industry project in Poland and one of the largest in Europe. It is another initiative intended to bring us closer to the diversification of our business, in this case into the promising polypropylene market. Currently, the project in more than 70% complete, and its commissioning is scheduled for 2023.

All our activities are part of the process of business integration of the Grupa Azoty Group companies we have been pursuing for a few years. While maintaining the separate legal identity of the individual plants, we are building a single brand of Grupa Azoty. The consolidation at the Grupa Azoty Group companies is a continuous process, however, it allows us to develop the Group, which successfully competes on foreign markets.
On behalf of the entire Grupa Azoty S.A. Management Board, I extend my sincere thanks to everyone involved in the preparation of this report, and kindly invite the readers to get acquainted with its contents. I hope that our company’s activities described in it will meet with your appreciation.

Yours sincerely,
Tomasz Hinc

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