- The Supervisory Board approved the recommendation to construct a polypropylene plant in Police.
- Final decisions are expected in Q4 2017 after the feasibility study.
- Demand for polypropylene in Central and Eastern Europe is projected to grow by 4.7% annually until 2025.
- Poland imported approximately 250 thousand tonnes of propylene in 2015.
Project Approval
The Supervisory Board of PDH Polska S.A., a special purpose vehicle of Grupa Azoty, has approved the Management Board’s recommendation to construct a polypropylene plant in Police. This option is considered more attractive than propylene production, with final decisions expected in Q4 2017.
Strategic Alignment
Production of polypropylene aligns with Grupa Azoty’s updated strategy, aiming to create synergies at the Group level and diversify revenue sources. The project would require collaboration between PDH Polska and Grupa Azoty plants in Police and Kędzierzyn, strengthening the Group’s non-fertilizer business and market position.
Market Demand
Demand for polypropylene in Central and Eastern Europe is projected to grow by 4.7% annually until 2025. Currently, there are no advanced plans for new polypropylene units in Europe, making this project commercially attractive.
Economic Impact
Market analyses indicate higher margins on propylene derivatives, and the inclusion of a polypropylene unit in the PDH project will increase Grupa Azoty’s flexibility and stabilize its overall margin position. The fragmented polypropylene market will also reduce long-term market risk.
Regional Significance
Polypropylene is the most significant propylene derivative, accounting for over 60% of product consumption in Central Europe. Poland, a major consumer, imported approximately 250 thousand tonnes of propylene in 2015. The new plant would significantly enhance Poland’s independence in polypropylene production.
