Leading Polish chemicals company Grupa Azoty is considering constructing a major new polypropylene plant at Police in northern Poland.
In 2015, the group proposed a €424m project to build a 400,000tpa plant to manufacture the intermediate propylene through the propane dehydrogenation (PDH) process in Police. This facility, due for completion by 2019, would make Azoty a key regional feedstock supplier at a time of growing European demand, it stressed at the time.
But now the Polish group is looking at the polypropylene plan which it says is a “far more attractive option than production of propylene”. A final decision on its ambitious capital project plans is due to be made during the final quarter of this year, Azoty said.
The supervisory board of PDH Polska S.A., the group project subsidiary, has approved a recommendation on the PP plant scheme from its management board, Azoty revealed at the end of June.
“At the current stage, PDH Polska management board’s recommendation that construction of a polypropylene plant be a predominant option for implementation of the project is attractive both commercially and business-wise.
“Demand for PP in central and Eastern Europe is expected to grow rapidly, by 4.7% per year on average until 2025. At the same time, there are no advanced plans for investment in new PP units in Europe,” explained PDH Polska president Andrzej Niewiński.
His company pointed to market analyses showing that raw material producers are beginning to earn higher margins on propylene compounds. The inclusion of PP capacity in the project will increase group flexibility and stabilise its overall margin, Azoty argued in a statement.
In addition, the more fragmented market for PP will reduce the group’s exposure to long-term market risk, it said.
Poland is one of the largest consumers of PP in Europe currently, with rising propylene imports, around 250,000tpa in 2015 so building an advanced production plant would greatly increase the country’s independence.
Grupa Azoty is a national leader in fertiliser and chemicals and a key player across Europe. But its second, non-fertiliser business features a plastics product line including polyamide, and PP, and intermediates like caprolactam and melamine.
A new PP operation will fit Azoty’s strategy, updated to 2020 this May with key development areas identified as expanding its non-fertiliser division, and “generating and implementing innovations to accelerate growth in the chemical sector”.