Integrated Report of Grupa Azoty 2021

ESG Strategy ESG Strategy Green Azoty Green Azoty Hydrogen Market Hydrogen Market Support for agriculture Support for agriculture Circular Economy Circular Economy Product diversification Product diversification Sustainable products Sustainable products

ESG Strategy

With the newly created ESG Strategy of the Azoty Group, our priority in the 2030 perspective will be sustainable development, implemented by taking measures to protect the environment, care for society and manage corporate governance responsibly.

Green Azoty

The 'Green Azoty' project is a key strategic element of the Azoty Group focusing on: green products, green technologies, green organization. We see the changes in the regulatory environment as an opportunity to take action to reduce environmentally harmful emissions by reducing coal consumption, decarbonization, development of RES and emission-free sources.

Hydrogen Market

We are the largest hydrogen producer in Poland and a major hydrogen processor in Europe. We intend to analyze the development of green hydrogen on an ongoing basis and carry out our own research and development work related to its use and application. We have also joined the European Alliance for Clean Hydrogen in 2021.

Support for agriculture

We support farmers by promoting the idea of regenerative agriculture. We educate on how to conduct agricultural production so as not to harm the natural environment and with respect for its resources. To this end, we are expanding our offer of monitoring and analytics of agricultural land for precise fertilizer application by our customers.

Circular Economy

Polimery Police is our key project and one of the largest investments in the Polish and European chemical industry, which fulfils the requirements of the strategy for a climate neutral circular economy and ensures decarbonisation of plastics throughout their entire life cycle. In 2021, we also continued research and development work, the result of which is expected to expand our portfolio of green products in line with the concept of circular economy.

Product diversification

We are focusing on diversifying our product portfolio - from nitrogen and compound fertilizers, engineering plastics and OXO products to melamine. We are also working on increasing production flexibility.

Sustainable products

At Azoty Group, we want our product offering - both fertilizers and plastics - to be sustainable and responsive to challenges of the contemporary world. We are the first company in Central and Eastern Europe to offer biodegradable plastics. In addition, we have consistently taken steps to reduce energy and raw material consumption in our production processes in 2021.

ESG Strategy01
Green Azoty02
Hydrogen Market03
Support for agriculture04
Circular Economy05
Product diversification06
Sustainable products07

Introduction

Letter from the President of the Management Board

Ladies and Gentlemen,

I invite you to read our integrated report for 2021, which was a challenging period for all Grupa Azoty Group companies.

The source of the Group’s strength lies in the resources of its members: a single organisation has brought together companies with different traditions and complementary business profiles, seeking to leverage their potential to implement a common strategy. This structure allows us to offer a diverse product mix, ranging from nitrogen and compound fertilizers, engineering plastics, to OXO products and melamine. Tomasz Hinc, President of the Management Board

WATCH VIDEO

Key projects in 2021

Polimery Police project

Polimery Police is one of the largest projects in the Polish and European chemical industry, which fulfils the requirements of the strategy for a climate neutral circular economy and ensures decarbonisation of plastics throughout their entire life cycle. It will help diversify the Group’s business, improving Poland’s position among plastics manufacturers and strengthening its independence in terms of energy and raw material supplies. Its purpose is to build propylene and polypropylene units with auxiliary systems and associated infrastructure, as well as to construct a port terminal with feedstock storage facilities. Polypropylene is a chemical compound that can be used in the chemical, pharmaceutical, textile, food, packaging, electronics and automotive industries.

Grupa azoty s.a.

Value creation model

OPERATIONAL EXCELLENCE STRATEGY

We will improve our operations based on three pillars: Logistics, Capital assets management, and IT.

INNOVATION STRATEGY

Our goal is to deliver new and improved products of high quality and maintain our competitive advantage in the long term.

FEEDSTOCK STRATEGY

Our key strategic goal in the feedstock area is to ensure the security and continuity of supplies. We also intend to continue efforts aimed at more efficient utilisation of our own feedstock assets.

MANAGEMENT STRATEGY BASED ON BUSINESS SEGMENTS

We plan the introduction of a new organisational model to fully realise the synergies between our companies that we have been consistently unlocking. We will completely integrate some support functions and introduce a management approach based on key business segments.

FINANCIAL STRATEGY

One of our strategic financial objectives is to continue the consolidation of the finance function, which will improve the management of the Grupa Azoty Group at the level of individual business segments.

ESG STRATEGY

We will develop the Grupa Azoty Group sustainably, meaning that we will consider environmental protection, concern for the society and responsible corporate governance (ESG aspects) in the process. The Group will continue to support the implementation of the United Nations 2030 Sustainable Development Goals.

Our business

Financial performance

Despite the very challenging market environment in 2021, the Grupa Azoty Group delivered strong results on the back of a well-diversified business and process streamlining. 2021 was a record year in terms of raw material prices and strong volatility of all prices, in particular that of natural gas. The Grupa Azoty Group reported a significant increase in consolidated revenue to PLN 15.9 billion, up 51% year on year. Among key factors driving the revenue growth were higher sales in the Chemicals and Plastics segments. The Group managed to maintain its margins in the Agro Fertilizers Segment even though the prices of its fertilizer products were among the lowest in the European Union.

Source: Company data * Financial data restated in accordance with the information presented in Section 2.4 of the Supplementary information to the consolidated financial statements.

Immediate environment

Stakeholder dialogue

In line with the new ESG strategy, we aim to increase our positive impact on the socioeconomic environment. We work closely with numerous stakeholder groups, and we expand projects benefitting our customers.

About the Grupa Azoty Group

Overview of the Group

At the Grupa Azoty Group, we believe in the power of the modern chemical industry, which contributes to improving the quality of people’s lives and to solving problems of the contemporary world.

RISK

Map of ESG risks and opportunities

Grupy Azoty to zakłady chemiczne, w których produkowane i składowane są materiały i substancje niebezpieczne, powstaje też potencjalne zagrożenie dla społeczności lokalnych, pracowników oraz otoczenia i środowiska naturalnego.

Innovations

Innovations in 2021

We combine our ambitious plans for the future with ongoing projects and innovative implementations.

Download the report in PDF format