Puławy, 2 August 2006

Polish Caprolactam Production Technology Again Meets with Appreciation

The Polish caprolactam production licence, co-owned by Zakłady Azotowe Puławy S.A. (ZA Puławy), received favourable assessment in Indonesia. The Management Board of ZA Puławy decided to assure the Indonesian counterparty of its readiness to transfer the abovementioned licence. The Polish licence has already been granted to Spain, Italy, South Korea, Taiwan and India.

The Polish technology is highly valued on international markets. The interest expressed by Indonesia is further proof of that, says Małgorzata Iwanejko, President of the Management Board of Zakłady Azotowe Puławy S.A. We are also holding talks on the possible sale of the technology to China and India.

As part of the transfer of the licence (whose other holders are Zakłady Azotowe Tarnów-Mościce S.A. and Instytut Chemii Przemysłowej of Warsaw), apart from selling the technology itself, the Management Board of Zakłady Azotowe Puławy intends to sell the accompanying technical services, project documentation and key equipment necessary to launch the production of caprolactam based on the Polish technology.

The construction project of the first caprolactam production plant in Indonesia, which had been carried out a few years ago, was disrupted by a massive economic crisis affecting the Far East. Talks were resumed as soon as stability returned to the region, leading to the Management Board’s decision to transfer the licence.

Zakłady Azotowe Puławy use the caprolactam production licence on the basis of the agreement concluded on March 31st 2006 with Zakłady Azotowe Tarnów-Mościce S.A. and Instytut Chemii Przemysłowej im. Prof. Ignacego Mościckiego (co-owners of the licence), which is a trilateral agreement defining the terms and conditions of using the caprolactam production technology, the interests of the co-holders of rights to the caprolactam production technology and rules of cooperation regarding making the caprolactam production technology available to third parties for a consideration.