Letter from the President of the Management Board
Dear Stakeholders,
as we reflect on the past year 2022, it stands out as a period marked by a number of challenging events on the global stage, with geopolitical and economic dynamics taking unexpected turns. The Russian Federation’s military aggression against Ukraine drew widespread condemnation and opposition from almost the entire free world.
At the Grupa Azoty Group, we could not remain indifferent to these distressing events. From the very outset, we engaged in efforts to support those affected by the conflict, offering both direct assistance and collaborating with aid organisations. I take pride in highlighting the exceptional commitment of our employees, who again demonstrated deep sensitivity to human suffering and adversity. The details of our humanitarian initiatives in response to the armed invasion of Ukraine are outlined in this report.
Unfortunately, the ramifications of the war extended to influence the macroeconomic landscape pertinent to the business of the Grupa Azoty Group. For one, the conflict impeded the post-pandemic recovery across the global economy, presenting our Group with unprecedented challenges and volatility, associated in particular with the prices of our feedstocks and raw materials, notably natural gas. In the face of these adverse conditions, we found ourselves among the last of Europe’s fertilizer manufacturers compelled to temporarily suspend production at certain plants. I am pleased to report that the production hiatus was short-lived, lasting less than seven weeks, whereupon we swiftly resumed operations as soon as the market conditions allowed us to do so, bringing about a significant decrease in gas prices. Importantly, it is crucial to note that the production stoppage had no adverse impact on the availability of our fertilizers throughout 2022.
Despite grappling with these macroeconomic headwinds, the Grupa Azoty Group closed the year with record-breaking revenue, exceeding the previous year’s figure by more than a half. This achievement can be attributed to increased sales in the Chemicals and Plastics segments, coupled with our ability to sustain margins in the Agro Fertilizers segment. Remarkably, our product prices remained among the most competitive in the European Union for the majority of 2022.
External challenges did not impede the ongoing development plans of the Grupa Azoty Group. Our strategic vision until 2030 is to evolve into a high-performing and flexible corporation, structured divisionally, focused on production in Europe. Central to our strategic objectives is the imperative of climate neutrality and energy transition within our operations. The Green Azoty project encapsulates our commitment to this green transformation, highlighted by the establishment of Grupa Azoty Energia – a dedicated entity responsible for supplying green energy to our Group companies. A major milestone was achieved in 2022 as we defined a term sheet for acquiring a solar PV power plant, and in 2023, with the signing by Grupa Azoty Police of an agreement to develop and construct a nuclear power research facility based on the SMR technology.
Our strategic vision is aligned with the prevailing regulatory trends in Poland and the European Union. We also remain resolute in our efforts to diversify the product mix with the introduction of sustainable and entirely biodegradable alternatives. Our evolution in the market is evident as we transition from being a prominent fertilizer manufacturer to assuming the role of a fertilizer service provider, actively championing the environmentally sounder precision agriculture. In our pursuit of innovation, we are actively developing technologies such as satellite crop monitoring, recognising its potential as a future source of competitive advantage and tangible demonstration of our environmental responsibility. We are witnessing an increase in the Group’s sales of high-margin speciality fertilizers, manufactured using materials that have been recovered from wastewater treatment or cement production.
Throughout this report, you will find examples of our dedication to advancing the Green Azoty project, including our venture into green hydrogen, aligning with the principles of the Paris Agreement and ambitious climate goals.
Despite the formidable challenges posed by demanding market conditions and the earlier pandemic, in 2022 our flagship project Polimery Police reached its final phase. At the year’s end construction progress was at an impressive 98% and a milestone moment occurred as Guadalupe Explorer, a vessel delivering the first 22,000 tonnes of propane feedstock for our new plant, arrived at the Handling and Storage Terminal in Police, marking also the symbolic inauguration of the Grupa Azoty Group’s new port.
As true progress in the chemical industry is driven by innovation, our Research and Development facilities have been consistently expanded, collaborating with reputable scientific institutions at the forefront of advanced projects. We have also embraced a culture of innovation to encourage contributions from our employees. For years, the Grupa Azoty Group has been fortunate to have on board exceptional professionals, whose expertise and experience in the field of chemistry represent a world-class standard. In 2022, we introduced the ‘Intellectual Property Management Policy’ and the ‘Employee Innovation Rules’, documents empowering every member of our workforce to actively contribute to the development of our companies. They serve as catalysts for innovation, providing a structured framework for reporting, evaluating, implementing and rewarding the best ideas from our talented team.
We give you this Grupa Azoty Group Integrated Report for 2022 with the belief that sustainable development and social responsibility are integral to our organisational culture and a vital imperative guiding our collective actions across the Group.
Best regards,
