New legislation concerning natural gas market

| Production & Resources |

On September 11th, 2013, the so-called “new three-pack”, or important amendments to Polish Energy Law Act and bills from July 26th came into force. New laws have a decisive impact on the development of competition on the gas market, giving the Chairman of Energy Regulatory Office the possibility to free up the prices of the resource for industrial clients. At the same time the amendments oblige Polskie Górnictwo Naftowe i Gazownictwo company to sell part of its resources on the Polish Power Exchange.

Easier access to cheaper resource

In 2014 Gaz-System may hold an auction concerning access to gas pipelines capable of importing c. 7 billion cubic meters of natural gas to Poland. The amount is equivalent to 45 percent of the domestic demand for the resource. The new rules of gaining access to gas pipelines by companies wishing to import gas to Poland have been specified in the Instruction of Transmission Network Traffic and Maintenance (IRiESP). The companies interested in access to gas pipelines will have to bid at an auction which will provide the full transmission capacity in Poland.

Natural gas from the West?

In 2014 importers are likely to gain access to Lasow interconnector on the Western border, as well as the virtual and actual pipeline transmission reversal in Yamal-Europe pipeline. The virtual reversal offers 5% of the transmission capacity and the actual reversal – c. 50 and 100%. In this way, Polish companies will be able to import 6.7 billion cubic meters of natural gas from Germany, where the fuel is cheaper than gas bought from Russia.

Articles prepares by Strategy and Development Team of Grupa Azoty “PUŁAWY”, headed by Andrzej Górecki.

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Challenges for African farming

| Foreign Markets |

Excessive importation of food and inadequate use of the potential of domestic agriculture, which employs 70% of the population – those are the main challenges faced by the African farmers.

Food imports

At present the value of food products imported by African countries is 40 billion USD. Experts believe that the money could be used in a much better manner, for example to develop domestic farming. In 2010, 66 million tonnes of cereals were imported to Africa, while local farmers provided 157 million tonnes. Market specialists stress the importance of achieving self-sufficiency of African farming in 10 years’ time. It would enable the African countries suffering from food shortages to import from their neighbors rather than from other continents.

Budding support for farmers

In 2003, 54 members of the African Union signed a declaration in the capital of Mozambique. The declaration concerns investing 10% of national budgets in the development of agriculture and rural areas. Unfortunately, only a few of those nations (Guinea, Senegal, Burkina Faso, Ghana, Niger and Mali) have been lucky to have their governments act on the declaration.

Nigeria may serve as an interesting example. The country has drawn up a system which motivates to invest in agriculture. Central government shares the loan risk with the agricultural producers. The purpose is to encourage the banks to provide advantageous loans serving agricultural progress and development.

Eliminating famine and poverty

Those are the key aims of African countries. Taking into consideration the fact that 70% of the continent population works in agriculture, promoting farming as the driving force of economic growth is a burning necessity. The chief issue is looking for innovative financial tools serving individual farmers as well as attracting investors who might boost the efficiency of African farming.

 

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“PUŁAWY”, China and caprolactam

| Prospects & Investment |

Caprolactam is an intermediate chemical product useful in the production of a number of construction plastics and nylon fibers. This explains why it is one of important import goods for the Chinese market.

Caprolactam from “PUŁAWY”

Grupa Azoty “PUŁAWY” is capable of manufacturing 70,000 tonnes of caprolactam per year. As a result, we are a leading manufacturer of this compound. It is manufactured basing on a Polish license and 35 years of experience our Company has gained in the sector. This is why “PUŁAWY” is a well-known and respected provider of caprolactam on a global scale.

Chinese market

Demand for caprolactam is constantly growing in China. While 3 years ago this one country bought up 25% of the global caprolactam production volume, this value is forecast to reach 40% in 2015. Consequently, the Chinese market is crucial for European manufacturers, including “PUŁAWY”. In 2011 as much as 5% of caprolactam imports came from Poland. However, China is struggling towards self-sufficiency in manufacturing of the compound, so as to satisfy as much as 80% of demand using domestic production.

Activity of “PUŁAWY”

Seeing that caprolactam market is changing dynamically, Grupa Azoty “PUŁAWY” is striving to remain very active both with respect to production and trade, but also on the forum of international organizations of chemical companies. We belong to China International Polyamide & Intermediate Forum and Nylon Promotional Group 6, the global associations of caprolactam and polyamide manufacturers. Owing to membership in international bodies and activities aimed at boosting manufacturing efficiency, “PUŁAWY” remains an important player on caprolactam market and a serious trade partner for Chinese companies.

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