Puławy, March 11th 2009

Press Release

Zakłady Azotowe "Puławy" S.A. Expand Production of Caprolactam Following Execution of New Contracts

Zakłady Azotowe "Puławy" S.A. (ZA Puławy) increase the work load of caprolactam production units to 100%. Recently, the Company executed two large contracts for the sale of caprolactam on the Asian market. The aggregate value of the contracts is approximately USD 20 million.

The Company’s annual caprolactam production capacity stands at 65 thousand tonnes. At the end of 2008, the Company cut down overall production capacities by approximately 30% in view of the global financial crisis. In the case of caprolactam, the reduction was even higher, amounting to 50%.

“I am very happy that the difficult times when so many producers were even forced to suspend production are over. We were helped by various factors, including the technology for 100% caprolactam flaking implemented in 2003–2005,” Hubert Kamola, Chief Operating Officer, said. “Major producers based in the USA, Japan or Korea do not have such capacities in this respect. Having such potential for caprolactam flakes production, ZA Puławy is able to sell caprolactam to the Asian markets, with which is it is well acquainted, whereas European customers for caprolactam (polyamide manufacturers) are still cash-strapped. It is a real success that we have been able to start working at full capacity. Additionally, we are currently negotiating new contracts.”

ZA Puławy is capitalising on its market position, experience and business relations in the Asian market. The Company is working on raising the current nominal production capacities by an additional several thousand tonnes per year in the future.