Puławskie Azoty stopped production of melamine. They lost out to high costs and competition from outside the EU.

The Board of Directors of Grupa Azoty Puławy has decided to temporarily suspend melamine production. The company said in a press release that costs related to the main raw materials – natural gas and the energy sector in terms of emission prices are currently the biggest challenge.

The price of melamine is disproportionately low compared to the costs.

“The reference point in this case is producers from outside the EU, who do not have to bear such high costs. Grupa Azoty Puławy has secured its operational stock of melamine. Production will be resumed when it is possible to obtain an acceptable price for melamine. Melamine on the market in relation to the level of production costs,” the company wrote.

“At the same time, Grupa Azoty Puławy is analyzing all fixed costs. Initial initiatives to improve fixed costs and investment initiatives to improve indicators are already being developed. Future synergies in new investments will also be important. It will be necessary to use them to the maximum in order to optimize each cost item,” the letter reads.

President Kamula: Importing from countries without CO2 regulations is a challenge

“In two out of three melamine plants, we use high-pressure technology, which allows us to produce the best quality product. Unfortunately, production costs remain a challenge, and specifically the competitive conditions in which the chemical industry operates in Europe. These are imports primarily from China, the USA and Trinidad, i.e. directions where CO2 regulations do not apply, and therefore there is no need to purchase emission allowances, and local producers are happy to direct their products to the European market,” says Azoty Puławy, president.

“We emphasize that the standards of working technology and installation in the EU are at the highest level – remember that melamine production technologies come from Europe. Taking all these factors into account, it is necessary to hold talks and take action to include provisions on melamine in the regulations under the CBAM. The goal is to balance the emission costs – this is a task for the near future,” emphasizes Hubert Camula.

Recently, melamine production in Grupa Azoty Puławy was carried out only on one of the three lines – Melamina III. It was resumed in February 2024. The Melamina II line was also renovated. The first restrictions on melamine production began at the beginning of July 2022. Grupa Azoty Puławy is the only melamine producer in Poland.