May 7th 2008

P r e s s   R e l e a s e 

ZCh Police and ZA Puławy Sign Letter of Intent

On May 7th 2008, Zakłady Chemiczne Police and ZA Puławy signed a letter of intent on cooperation between the two companies. Pursuant to the letter, both companies intend to adopt joint activities in such areas as product distribution and procurement of feedstocks.

The letter of intent signed today by ZA Puławy S.A. and ZCh POLICE S.A. will be binding upon the parties until June 30th 2009. By that time, both companies are to determine the terms of their cooperation in such areas as improvement in the efficiency of the sales process, joint research and R&D projects, enhancement of the product offerings to include new products, or development of new joint projects which will enable the companies to minimise their operating costs and business risk. Both companies also agreed to investigate the possibility of joint procurement and purchase of feedstocks required for the production.

The purpose of the letter of intent is to undertake actions beneficial for both companies, not only in the area of distribution and sales logistics, but also in the area of development of new products. We also expect to achieve synergies in the area of feedstock procurement, says Paweł Jarczewski, President of the Management Board of ZA Puławy S.A.

The cooperation of the two largest fertiliser and chemical manufacturers in Poland will be beneficial not only for us, but also for our customers. The measurable effects of the letter of intent signed today may include improvement in the quality of output or the accessibility of feedstocks, adds Ryszard Siwiec, President of the Management Board of ZCh POLICE S.A.
Both companies agreed to establish special teams to work on individual Projects. The meetings of the teams – to be attended also by the Members of the Management Boards of both companies – will be held not more frequently than once every quarter, but not less frequently than once every six months.