- Production halted from 1 September
- Only resins and technical gases production maintained
- Natural gas accounts for 70% of nitrogen fertilizer cost
- Employees will either maintain equipment or be on standby
Production Suspension
Due to the drastic rise in natural gas prices in Europe, Achema is temporarily suspending its fertilizer production at its plant in Jovanos, Lithuania, starting from 1 September. The company will continue to produce resins and technical gases during this period.
Market Impact
According to CEO Ramūnas Miliauskas, the record-high natural gas prices have made the cost of production unsustainable, rendering their fertilizers uncompetitive compared to those produced in the US and Russia. This situation has forced many Western fertilizer producers, including Achema, to shut down their operations.
Employee Allocation
During the shutdown, some employees will be tasked with maintaining and protecting the equipment, while others will be placed on standby. This measure is necessary to ensure the plant can resume operations smoothly once the market conditions improve.
Cost Factors
Natural gas is a critical raw material for nitrogen fertilizer production, accounting for approximately 70% of the total production cost. The current record-high prices of natural gas in Europe have significantly impacted the overall cost structure, leading to the temporary suspension of fertilizer production at Achema's plant.
