Acron Group Releases 2012 Operating Results

OREANDA-NEWS. January 23, 2013. Group’s Consolidated Output (Operating Results for Acron, Dorogobuzh and Hongri Acron)

Acron Board of Directors Chair Alexander Popov comments on the results:

"In 2012, Acron’s production facilities manufactured 5.8 million tonnes of commercial products, which is comparable to 2011 output. The highlight of the reporting year was the launch and first shipments of apatite-nepheline ore and later of apatite concentrate at our Oleniy Ruchey mine. In December, Acron started manufacturing complex fertilisers from its own phosphates. We will incrementally increase apatite concentrate output to meet the requirements of the Group’s Russian facilities by mid-2013.

"A number of factors contributed to the Group’s successful operating performance in 2012. The commissioning of a new 330-kt urea unit at Acron Novgorod and the increase in complex fertiliser output at Hongri Acron in China helped us maintain high production rates. Total output of urea and urea-ammonium nitrate (UAN) was up 25%. According to our plans, urea production will reach design capacity of 800 kt in 2013, which will allow us to increase our output of UAN. There is steady demand for this liquid nitrogen fertiliser, and we intend to sell as much as 1 million tonnes of it annually within the next few years.

"I want to mention another record, this time in ammonia production. In aggregate, all of the Group’s ammonia units manufactured 1,783 kt. Each of the three ammonia units in Russia produced 1,700 tpd. Because we are committed to continual improvement, we are gradually upgrading equipment to attain higher output and resource efficiency. Acron has considerable human resource potential and expertise to maintain its leading position in this area. In addition, we began constructing a large-tonnage 700-kta ammonia unit to come on stream in 2015.

"The scheduled overhaul at Dorogobuzh in the second and third quarters of 2012 and the forced stoppage of the Group’s Russian NPK units due to phosphate shortages in the summer of 2012 led to a decrease in operating results for certain products. We expected the drop in production at Dorogobuzh, since the facility shuts down for long-term capital repairs every two years, during which operations are suspended for up to 40 days. Unfortunately, the decrease in NPK production was also due to interrupted apatite concentrate supplies from the manufacturer, and this adversely affected our complex fertiliser segment; however, the launch of our own apatite concentrate operations in late 2012 mitigates the risk of similar events in the future.

"In terms of our industrial product segment, I would like to note the improved quality of the Group’s urea-formaldehyde resin products. Acron is gradually changing its focus to resins with low formaldehyde content, which are popular in Russia. For other products, the dynamics were stable. The decrease in calcium carbonate figures was related to the suspension of NPK operations.

"The global market and sales of NPK slowed in the fourth quarter due to seasonal factors. At the same time, many countries have started buying fertilisers for the spring season, which helps nitrogen fertiliser sales.

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