Puławy, January 29th 2010

Press Release

Another contract to utilize ZA Puławy’s newly increased production capacity

Zakłady Azotowe Puławy S.A. executed a contract for the sale of urea with Kronopol Żary Sp. z o.o. The estimated value of the contract is PLN 330m.

The execution of the contract is consistent with the ongoing implementation of an investment project aimed at  increasing the annual production capacity of urea by ca. 270 thousand tonnes (the “Oxygen Generation Plant – Ammonia – Urea” project). The project will make Zakłady Azotowe Puławy S.A. the largest urea producer in Central Europe, with annual production capacity of 1.2 million tonnes.

Urea is the key component of the Company’s integrated production chain. It is processed into nitrogen fertilisers such as granular urea or liquid UAN (solution of urea and ammonium nitrate). It is also a key raw material for the production of melamine (Zakłady Azotowe Puławy S.A. is the third largest producer of melamine in the world). Since 2007, urea has also been used by the Company to produce water solution of urea marketed under the “AdBlue” brand, the production capacity of which was raised last year from 30 to 100 thousand tonnes per year.

“As often highlighted by analysts, ZA Puławy’s domain is production and trade, and the Company has unrivalled expertise in these areas. Trading activities pursued by the Company are oriented towards long-term business solutions. The five-year contract with Kronopol may serve as a perfect example,” comments Marek Kapłucha, member of the Management Board of Zakłady Azotowe Puławy S.A.

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Kronopol Żary Sp. z o.o is a member of Swiss Krono Group (Ernst Kaindl), a group of companies which secured the position of a global leader in manufacturing wood-based products. The Company was formed in 1994 following the acquisition of Państwowe Zakłady Płyt Wiórowych (state-owned manufacturer of chipboard). Kronopol is dynamically investing to increase its manufacturing capactities with respect to highly-processed products by developing its base of presses used for laminating, forming or cutting chipboard to size. At present, Kronopol is a major exporter selling its products to approximately 50 countries across all continents.