report powering Creation
gRupa azoTy inTegRaTed RepoRT | 2013
t
The market is an open space – but only for those, who themselves can open to the opportunities it provides. We’ve opened up to what is most valuable in Polish chemistry and merged these assets into one entity. Into Grupa Azoty. We’ve opened up to the world and found new markets and new sources of raw materials. We are always open to the future. We free imagination, we calculate and plan. Creation is work that will never end. Fortunately.
Grupa Azoty integrated report | 2013
Report was prepared in accordance with GRI G4 (core) Report was verified by a third-party external verification agency.
2 integrated report | 2013
POWERIN G CREATION
G4-1
G4-2
Ladies and Gentlemen, It is with great pleasure that I present to you the first integrated annual report of the Grupa Azoty Group, covering the financial year 2013. In line with an internationallyrecognised approach, the report offers a systematic perspective on our general economic, social and environmental performance, rather than just the financial results. This report is not only among Poland’s first integrated reports, but also one of the first on the market to implement the latest version of the GRI Sustainability Reporting Guidelines – the G4. I strongly believe that this reporting framework ensures an accurate and reliable presentation of a business enterprise. I also think that this comprehensive approach will be well received by the business environment, including our shareholders. In my opinion, presenting a full picture of our performance, rather than just the financial results, will enable the capital market to better understand the Group’s day-to-day operations and recognise its potential for longterm growth. A reporting approach that integrates social, environmental and economic perspectives with financial data has been developed to respond to the public’s expectations towards business. By catering to these expectations today, we set new standards. Last year ushered in a host of enormous challenges for the Group, spurring the creation of entirely new value in the Polish economy. We have succeeded in consolidating 30 companies under a single brand, including Poland’s four largest chemical plants: in Tarnów, Kędzierzyn-Koźle, Police and Puławy. We have thus accumulated a wealth of complementary and unique capabilities in the chemical industry – the know-how and experience
in large-volume chemical production, as well as the many years of research and development work. We can build on this to continue innovating and exploring for efficient solutions, which is essential in the context of global social and environmental challenges. The Grupa Azoty Group leverages its combined production capacities and operates a uniform management framework relying on process leaders, defined decision paths and decision-making transparency. The consolidation, which was carried out so as to preserve each company’s individual character and place in the local community, allows the entire organisation to operate as if it were a single company. Critical to successful integration are respect, people and common values. The respect for local heritage and traditions, something all our employees have in common, is the source of our unique character and creative power. As the shared vision and sense of unity binding our team are the key source of synergy, we are working hard towards creating a robust organisational culture across the Group. For us, responsibility is a commitment to finding solutions to the problems of today’s world, including those facing the Polish economy. This commitment consists in limiting our environmental impact, but also in discovering new opportunities, innovations and unique expertise, as well as in creating prime quality products, safe to the environment and valuable to society. Rather than make empty declarations about sustainable growth, the chemical industry should pursue concrete solutions to make growth sustainable. The Grupa Azoty Group wants to play a part in developing such solutions.
Even today we pioneer changes which may dramatically alter our current perception of fertilizers. We set a course for smart solutions, and we find them. We understand the threats, but we can also see the opportunities and capture them successfully. In the past, mineral fertilizers proved instrumental in increasing the food supply, thus dispelling the shadow of the Malthusian catastrophe, but today we can see with growing clarity that fertilizers must also be safe to the environment. The world needs safe and effective fertilizers, and we are here to offer them – it is our duty as the market’s leader. At the Grupa Azoty Group, we deliver solutions offering tangible social and environmental value across all of our operating areas. As shown by numerous examples, business, including the chemical industry, opens the door to global sustainable development. The Grupa Azoty Group, its creative workforce and stakeholders, as integrated by the Group, are all part of this new solution. The awareness that we can have a real impact on the world fuels our passion and creative power. We are thus building sustainable value to the benefit of our immediate environment, as well as, in the long-term perspective, for the shareholders who have chosen to invest in Grupa Azoty. As a team, we shall not betray the confidence which our shareholders have placed in us.
Have a good read, Paweł Jarczewski
President of the Management Board Grupa Azoty S.A.
3 integrated report | 2013
After a time of growth comes a time of maturity – a time for harvest. A time for taking stock. Sometimes figures can bring as much joy as ripe fruit.
4 integrated report | 2013
G r u pa A zot y i n ke y fi g u r e s
Revenue
PLN 9 821m EBIT
PLN 703m EBITDA
PLN 1 253m Capital expenditure
PLN 670m Net profit
PLN 714m Equity
PLN 6 271m Total assets
PLN 9 962m Headcount at end of year
13 879 Energy consumption
47 975 894 GJ Water consumption
275 810 550 m3
5 integrated report | 2013
6 integrated report | 2013
1 Introduction
7 integrated report | 2013
Architecture is a dialogue between matter and imagination. It's the art of harmony. Much like in business – a company's well-crafted architecture brings safety and lets various assets be used to achieve a common, daring goal.
8 integrated report | 2013
G r u pa A zot y G ro u p ’ s profi l e
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G4-12
The Grupa Azoty Group has consolidated several dozen companies under a single brand, including Poland’s largest chemical plants in Tarnów, Kędzierzyn-Koźle, Police and Puławy, accumulating a vast potential of complementary capabilities. The Group’s business is divided into the following segments: ■■
Agro Fertilizers,
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Plastics,
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Chemicals,
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Energy,
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Other Activities.
The Grupa Azoty Group is currently the leader of the Polish chemical industry and a significant player in the EU market.
Its products find practical applications in virtually all areas of the economy, with significant value added in social terms. They open the field for new technologies and improve the quality of everyday life. The Group’s products are widely applied in agriculture, automotive industry, construction, electrical engineering, pharmacy, household products, food, textile and cosmetic industries, wood processing industry, paper manufacture, mining, printing, furniture, machine-building industry, sports equipment, and many other areas. They are indispensable for the manufacture of laminated decorative materials, wood-based boards, glues, paints and varnishes. Without mineral fertilizers, including those produced by the Grupa Azoty Group, agricultural yield would not be sufficient to feed the world, and it would not be possible to obtain many medicines and other specific products, such as de-icing blends for aircraft runways, antiseptic containers or fuel additives necessary for exhaust emissions treatment. Without such products, today’s food industry and medicine would certainly not be the same.
9 integrated report | 2013
As the industry leader, the Grupa Azoty Group strives to play an active part in shaping the future and setting the highest industry standards. The Group pursues these objectives through membership in numerous business and trade organisations, which it sees as a platform for dialogue with the market and its environment. Through synergies, the combined knowledge and experience of the Grupa Azoty Group’s R&D laboratories and its significant production capacities can foster unprecedented innovation and efficiency. The Grupa Azoty Group is a network of equity-linked companies which, operating as a single entity, can now fully leverage their market potential.
G r u pa A zot y G ROUP ' S STRUCTURE Grupa Azoty S.A.
Grupa Azoty ATT Polymers GmbH 100%
Grupa Azoty „KOLTAR” Sp. z o.o. 100%
Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. 93,48%
Grupa Azoty Zakłady Azotowe „Puławy” S.A. 95,98%
Grupa Azoty Zakłady Chemiczne „POLICE” S.A. 66%
Hotel CENTRALNY Sp. z o.o. in liquidation 100%
„Agrochem” Sp. z o.o. 100%
„Automatika” Usługi Kontrolno-Pomiarowe Sp. z o.o. 100%
ZAKSA S.A. 91,67% ***
„Agrochem Puławy” Sp. z o.o. 100%
„KONCEPT” Sp. z o.o. 100%
CTL CHEMKOL Sp. z o.o. 49%
SCF Natural Sp. z o.o. 99,99%
REMECH Grupa InwestycyjnoRemontowa Sp. z o.o. 100%
D.W. „Jawor” Sp. z o.o. in liquidation 99,96% 1
„TRANSTECH” Usługi SprzetowoTransportowe Sp. z o.o. 100%
GZNF „Fosfory” Sp. z o.o. 98,43%
„Supra” Agrochemia Sp. z o.o. in liquidation 3
Przedsiębiorstwo Żywienia Zbiorowego i Usług „STO-ZAP” Sp. z o.o. 96,15% 12
Zarzad Portu Morskiego Police Sp. z o.o. 99,97%
REMZAP Sp. z o.o 94,61%
African Investment Group S.A. 55%
Zakład Opieki Zdrowotnej „Medical” Sp. z o.o. 91,41%
INFRAPARK Police S.A. in liquidation 54,43%
Zakłady Azotowe Chorzów S.A. 85%
„Budchem” Sp. z o.o. in liquidation 48,96%
PROZAP Sp. z o.o. 84,69%
„KEMIPOL” Sp. z o.o. 33,99%
Grupa Azoty Polskie Konsorcjum Chemiczne Sp. z o.o. 36,73% *
Bałtycka Baza Masowa Sp. z o.o. 50%
Grupa Azoty Polskie Konsorcjum Chemiczne Sp. z o.o. 63,27%*
Kopalnie i Zakłady Chemiczne Siarki „Siarkopol” S.A. 85% 5
Grupa Azoty Automatyka Sp. z o.o. 79,69% Grupa Azoty Jednostka Ratownictwa Chemicznego Sp. z o.o. 100% 4 Regionalne Laboratorium Oceny Mleka Sp. z o.o. 100% Konsorcjum EKO TECHNOLOGIES 60% EKOTAR Sp. z o.o. 12%*** Grupa Azoty PROREM Sp. z o.o. 100% EKOTAR Sp. z o.o. 12%***
„NAVITRANS” Sp. z o.o. 26,45%****
„NAVITRANS” Sp. z o.o. 26,45%**** Elektrownia Puławy Sp. z o.o. 50%
Changes in Group structure in period 1st January-17th July 2014: 1) Dom Wczasowy Jawor Sp. z o.o. w likwidacji (in liquidation) − the company was deleted from the National Court Register on June 9th 2014. 2) Przedsiębiorstwo Żywienia Zbiorowego i Usług STO-ZAP Sp. z o.o. – the company’s name was changed to STO - ZAP Sp. z o.o. as of February 27th 2014. 3) Supra Agrochemia Sp. z o.o. w likwidacji (in liquidation) − on December 16th 2013, the Extraordinary General Meeting of Supra Agrochemia Sp. z o. o. w likwidacji (in liquidation) resolved to revoke the resolution on the company’s liquidation with effect from January 1st 2014; an entry changing the company name (to Supra Agrochemia Sp. z o. o. ) was made in the National Court Register on January 27th 2014. 4) Regionalne Laboratorium Oceny Mleka Sp. z o.o. – the company was deleted from the National Court Register on March 14th 2014 in connection with its merger with Jednostka Ratownictwa Chemicznego Sp. z o.o., a Grupa Azoty Group company. 5) Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. – the company’s name was changed to Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. as of February 11th 2014. 6) On May 19th 2014, Grupa Azoty S.A. incorporated two new subsidiaries: Grupa Azoty Compounding Sp. z o.o. (100%) and Grupa Azoty Folie Sp. z o.o. (100%). Grupa Azoty Compounding Sp. z o.o. was entered in the National Court Register on June 18th 2014, while Grupa Azoty Folie Sp. z o.o. was registered on June 24th 2014. 7) On May 14th 2014, AFRIG Trade SARL, a wholly-owned subsidiary of African Investment Group S.A., was registered.
*
Grupa Azoty PKCH Sp. z o.o. – shares held by Grupa Azoty S.A. CTL KOLZAP Sp. z o.o. and Grupa Azoty ZAK S.A. 49% ** ZAKSA S.A. – shares held by Grupa Azoty ZAK S.A. (91.67%) and CTL Chemkol Sp. z o.o. (0.783%) „NAVITRANS” Sp. z o.o. EKOTAR sp. z o.o. – shares held by Grupa Azoty JRCH sp. z o.o. 26,45%**** *** and Grupa Azoty PROREM sp. z o.o. (12% each) „NAVITRANS” sp. z o.o. – shares held by Grupa Azoty S.A., **** Grupa Azoty Zakłady Azotowe „Puławy” S.A. TECHNOCHIMSERWIS S.A. and Bałtycka Baza Masowa sp. z o.o. closed type 25%
Correct as at 31 December 2013 r.
10 integrated report | 2013
G4-3
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G4-6
G4-17
G r u pa A zot y G ROUP ' S STRUCTURE
The Group comprises Grupa Azoty S.A. of Tarnów and its eight subsidiaries (seven companies in which the Parent holds interests above 50%, and one indirectly controlled entity). In addition to the Tarnów-based Parent Company of the Grupa Azoty Group, this integrated sustainability report also covers its three largest subsidiaries: ■■
Grupa Azoty Zakłady Azotowe „Puławy” S.A. z Puław (Grupa Azoty Puławy),
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Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. z Kędzierzyna-Koźla (Grupa Azoty ZAK S.A.),
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Grupa Azoty Zakłady Chemiczne „Police” S.A. z Polic (Grupa Azoty Police).
The above subsidiaries have a total of 23 their own subsidiaries. The Grupa Azoty Group has consolidated the Polish chemical industry by bringing together Poland’s largest chemical plants, including those in Tarnów, Puławy, Police and Kędzierzyn-Koźle. This consistently implemented consolidation strategy allows the Group to be a competitive force not only in the Polish and EU markets, but also globally. Through its subsidiaries, the Grupa Azoty Group has access to seaports in Police, Gdańsk and Gdynia and the cargo handling port in KędzierzynKoźle, and operates its own rolling stock. The Group’s port facilities and rolling stock are adapted for transport of fertilizers and chemical products.
The four companies covered by this report account for the majority of the Group’s revenue and operations. In addition, the Group’s consolidated financial statements also take into account the following five subsidiaries of Grupa Azoty: ■■
Grupa Azoty ATT Polymers GmbH of Guben, Germany,
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Grupa Azoty Polskie Konsorcjum Chemiczne Sp. z o.o. (Tarnów),
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Grupa Azoty „Koltar” Sp. z o.o. (Tarnów),
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Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki „Siarkopol” S.A. (Grzybów),
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Navitrans Sp. z o.o. (Gdynia, an indirectly controlled subsidiary).
The constituent companies bring various specialisations and capabilities into the Group, which is where its strength comes from. The wealth of their experience offers a potential for synergies released through the consolidation process.
11 integrated report | 2013
Size alone does not guarantee strength. Because strength without flexibility is an illusion. Which is why great organizations need to be built from diverse elements, in order to manage them wisely in every situation.
G r u pa A zot y Com pan i e s Grupa Azoty S.A. full name: Grupa Azoty Spółka Akcyjna
Grupa Azoty S.A. has been present on the market for nearly 90 years. Consolidation Grupa Azoty S.A. is the Parent of its group (the Grupa Azoty Group). Over the last five years, the Company has implemented a strategy to consolidate the most valuable assets of the Polish chemical industry. As a result, it has brought together under a single brand a host of companies with different traditions and complementary business profiles.
Grupa Azoty S.A. on the capital market Ticker symbol: ATT Grupa Azoty S.A. has been listed at the Warsaw Stock Exchange since 2008. Since 2009, it has been included in the Respect Index, and since 2013 – in the MSCI Emerging Markets index.
Specialist focus Grupa Azoty S.A.’s core business comprises manufacture and sale of mineral fertilizers, engineering plastics (including raw ingredients for their production), and other chemicals, as well as provision of related services.
Management Board Paweł Jarczewski
Grupa Azoty S.A. is a major producer of nitrogen fertilizers:
Vice-President of the Management Board
President of the Management Board
Witold Szczypiński Vice-President of the Management Board, Director General
Andrzej Skolmowski Krzysztof Jałosiński
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standard CAN 27 calcium ammonium nitrate,
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AN 32 ammonium nitrate, and particularly of
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fertilizers with a sulfur content: Saletrosan®26, and
Marian Rybak
AS 21 ammonium sulfate,
Artur Kopeć
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Vice-President of the Management Board
Marek Kapłucha Vice-President of the Management Board
Vice-President of the Management Board
Member of the Management Board
of which it is the largest domestic manufacturer. It is the only Polish producer of polyacetal and a leading producer of modified engineering plastics based on polyamide 6, polyacetal and other compounds. The Company offers caprolactam (both in liquid and crystalline forms), as well as polyacetal and polyamide 6, of which it is an integrated producer. Grupa Azoty S.A. also offers chemicals (such as cyclohexanone and mixed acids) and catalysts. It is a provider of modern laboratory services. The Company has its own research facilities, performing over a million analyses per year. It concentrates both on research into new products and technologies, and on development of existing products.
Supervisory Board Monika Kacprzyk-Wojdyga Chairperson of the Supervisory Board
Jacek Obłękowski Vice-Chairperson of the Supervisory Board
Ewa Lis Secretary of the Supervisory Board
Robert Kapka Member of the Supervisory Board
Tomasz Klikowicz Member of the Supervisory Board
Artur Kucharski Member of the Supervisory Board
Marek Mroczkowski Member of the Supervisory Board
Zbigniew Paprocki Member of the Supervisory Board
Ryszard Trepczyński Member of the Supervisory Board Correct as at 17 July 2014
14 integrated report | 2013
G r u pa A zot y Com pan i e s Grupa Azoty ZAK S.A. full name: Grupa Azoty Zakłady Azotowe Kędzierzyn Spółka Akcyjna
Grupa Azoty ZAK S.A. has been present on the market for over 60 years. Consolidation Grupa Azoty ZAK S.A. joined the consolidation process of the Grupa Azoty Group in 2010, when Grupa Azoty S.A. acquired a 52.62% interest in the company. Subsequently, in 2011, it acquired a further 40.86% of its shares (which brought its total shareholding in Grupa Azoty ZAK S.A. to 93.48%).
Specialist focus Grupa Azoty ZAK S.A.’s business profile consists in manufacture, provision of services and trading operations involving fertilizers and nitrogen compounds, OXO alcohols and plasticizers, as well as other organic and inorganic chemicals.
Management Board Adam Leszkiewicz
In terms of capacity, Grupa Azoty ZAK S.A. is currently the third largest domestic producer of nitrogen-based fertilizers with excellent spreading properties.
Vice-President of the Management Board
Grupa Azoty ZAK S.A. offers such nitrogen fertilizers as:
Supervisory Board Andrzej Skolmowski
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Chairperson of the Supervisory Board
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Zaksan®, SALMAG® (a line of fertilizer products), calcium ammonium nitrate, 46% granulated urea.
It also markets a range of plasticizers under the Oxoplast® brand, and a range of products from the OXO alcohol category. The branded products offered by the company also include NOXyTM (AdBlue®). Grupa Azoty ZAK S.A. was the first in Poland to develop the processes to obtain basic chemical products such as urea, phthalic anhydride, maleic anhydride, and OXO alcohols, and to launch these products for commercial production. Specialists who had gained experience launching that production became the core group of professionals who have helped launch subsequent chemical plants in Poland.
15 integrated report | 2013
President of the Management Board, Director General
Mirosław Ptasiński Vice-President of the Management Board, Head of the Finance Department
Dariusz Bednorz Krzysztof Kamiński Vice-President of the Management Board
Jerzy Koziara Vice-Chairperson of the Supervisory Board
Paweł Polański Secretary of the Supervisory Board
Marek Kapłucha Member of the Supervisory Board
Witold Szczypiński Member of the Supervisory Board
Marcin Stanisław Witkowski Member of the Supervisory Board
Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Grupa Azoty Police full name: Grupa Azoty Zakłady Chemiczne „Police” Spółka Akcyjna
Grupa Azoty Police has been present on the market for over 40 years. Consolidation Grupa Azoty Police joined the consolidation process of the Grupa Azoty Group in 2011, when Grupa Azoty S.A. acquired a 66% interest in the company. Grupa Azoty Police on the capital market Ticker symbol: PCE Grupa Azoty Police has been listed at the Warsaw Stock Exchange since 2005.
Specialist focus Grupa Azoty Police’s business profile consists in manufacture, provision of services and trading operations involving compound fertilizers, ammonia, phosphoric and sulfuric acid, titanium white, and other chemicals.
Management Board Krzysztof Jałosiński
Grupa Azoty Police manufactures the following compound mineral and nitrogen fertilizers:
Vice-President of the Management Board
■■ ■■ ■■ ■■
POLIDAP®, POLIFOSKA®, POLIMAG®, mocznik.pl®.
President of the Management Board, Director General
Wojciech Naruć Vice-President of the Management Board
Rafał Kuźmiczonek
Supervisory Board Paweł Jarczewski Chairperson of the Supervisory Board
Anna Tarocińska Secretary of the Supervisory Board
Production and sale of such products as Likam®, a water solution of ammonia, and NOXy™ (also marketed as AdBlue®) are other important elements of the company’s operations.
Marcin Likierski
Core areas of its business also include production of titanium white and its by-products: iron (II) sulfate and hydrolytic acid. Grupa Azoty Police operates the only titanium hite production facility in Poland. Titanium dioxide pigments are sold under the TYTANPOL® trademark.
Member of the Supervisory Board
The company operates its own deep-sea port, located just next to the production facilities (Poland’s fourth largest seaport by weight of cargo handled).
16 integrated report | 2013
Member of the Supervisory Board
Wiesław Markwas Member of the Supervisory Board
Andrzej Skolmowski
Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Grupa Azoty Puł awy full name: Grupa Azoty Zakłady Azotowe „Puławy” Spółka Akcyjna
Grupa Azoty Puławy has been present on the market for over 50 years. Consolidation Grupa Azoty Puławy joined the consolidation process of the Grupa Azoty Group in 2012, when Grupa Azoty S.A. acquired a 10.3% interest in the company. The consolidation gained a new momentum in 2013, when following exchange of shares by the shareholders of Zakłady Azotowe Puławy S.A. for shares in Zakłady Azotowe w TarnowieMościcach S.A., the Tarnów-based company increased its interest in the former to 83.7%, and subsequently, following the acquisition of an additional block of shares, to 95.89%.
Specialist focus Grupa Azoty Puławy’s business profile consists in manufacture, provision of services and trading operations involving mineral fertilizers and chemical products. The company’s flagship mineral fertilizer products include: ■■ PULAN®, ■■ ■■ ■■ ■■
It also manufactures chemicals, including the following key products: ■■ ■■ ■■ ■■
Grupa Azoty Puławy on the capital market Ticker symbol: ZAP Grupa Azoty Puławy has been listed at the Warsaw Stock Exchange since 2005.
PULREA®, RSM® and RSM®S, PULASKA®, PULSAR®.
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Melamina®, Caprolactam®, hydrogen peroxide, PULREA®, PULNOX®, NOXy™ (previously AdBlue®).
Management Board Marian Rybak President of the Management Board
Wojciech Kozak Vice-President of the Management Board
Zenon Pokojski Vice-President of the Management Board
Supervisory Board Cezary Możeński Chairperson of the Supervisory Board
Jerzy Koziara Vice-Chairperson of the Supervisory Board
Jacek Józef Wójtowicz Secretary of the Supervisory Board
Andrzej Bartuzi Member of the Supervisory Board
Marek Kapłucha Member of the Supervisory Board
Andrzej Skolmowski Member of the Supervisory Board
Being a parent of its own group, Grupa Azoty Puławy is able to offer a vast range of fertilizer products: phosphate fertilizers and fertilizer blends (Fosdar™ Enhanced Superphosphate, Amofoska®), fertilizer blends produced at GZNF Fosfory of Gdańsk, the Agrafoska and Amofosmag fertilizers produced at Agrochem Dobre Miasto, as well as potassium nitrate fertilizer and calcium nitrate manufactured at Zakłady Azotowe Chorzów S.A. The plants of the Grupa Azoty Puławy Group also manufacture sulfuric acid, sodium bisulfite, as well as technicaland food-grade potassium nitrate.
17 integrated report | 2013
Correct as at 17 July 2014
G r u pa A zot y Com pan i e s GZNF FOSFORY full name: Gdańskie Zakłady Nawozów Fosforowych "FOSFORY" Sp. z o.o.
A subsidiary of Grupa Azoty Puławy. Gdańskie Zakłady Nawozów Fosforowych Fosfory Sp. z o.o. is a manufacturer and service provider.
Specialist focus The company began its operations in 1912 as a manufacturer of sulfuric acid and various inorganic salts.
Management Board Mirosław Turzyński
The present business profile of Gdańskie Zakłady Nawozów Fosforowych FOSFORY Sp. z o.o. consists in manufacture of agricultural fertilizers and chemical products, as well as provision of cargo handling and laboratory services.
Member of the Management Board
The company’s range of fertilizer products includes mineral fertilizers with extensive applications in agriculture, cultivation of fruits and vegetables. Its product offering also includes Amofoska fertilizers, such as: ■■ ■■ ■■ ■■
AMOFOSKA NPK 5-10-25+0,1B AMOFOSKA NPK 4-16-18 AMOFOSKA NPK 4-12-20 AMOFOSKA NPK 4-12-12
and FOSDAR™ 40 Enhanced Superphosphate. Gdańskie Zakłady Nawozów Fosforowych Fosfory Sp. z o.o. also offers sulfuric acid and sodium bisulfite. Leveraging its convenient location within the Gdańsk port, the company has, since 1976, conducted extensive forwarding activities involving the services of handling bulk cargo transported by sea. The company also uses its advanced laboratory facilities to offer a broad range of laboratory services.
18 integrated report | 2013
President of the Management Board
Andrzej Szymańczak
Supervisory Board Zenon Pokojski Chairperson of the Supervisory Board
Weronika Gągała Vice-Chairperson of the Supervisory Board
Marek Zatorski Secretary of the Supervisory Board
Grażyna Pawlik Member of the Supervisory Board Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Zakł ady Azotowe Chorzów full name: Zakłady Azotowe Chorzów S.A.
A subsidiary of Grupa Azoty Puławy. Zakłady Azotowe Chorzów S.A. is a production company.
Specialist focus Zakłady Azotowe Chorzów S.A. focuses on manufacture and sale of chemical products, fertilizers, and approved food additives. Its range of fertilizer products includes: ■■ potassium nitrate, ■■ fertilizer calcium nitrate, ■■ fertilizer blends - NPK, ■■ monopotassium phosphate. Zakłady Azotowe Chorzów S.A. offers industrial chemicals, including technical-grade potassium nitrate, Scalnit 50, and Borax pentahydrate. It also manufactures food additives (including food-grade potassium nitrate, ammonium carbonate E503, disodium diphosphate E450 and other). In 2013, a state-of-the-art animal fats processing facility was placed in service at Zakłady Azotowe Chorzów S.A., enabling it to produce stearin and glycerin. The facility, worth PLN 65m, is the first plant of this type in Poland. Its annual stearin production capacity is 13 thousand tonnes. Zakłady Azotowe CHORZÓW was established in 1916. Next to Grupa Azoty S.A., the Chorzów-based company is the birthplace of the Polish chemical industry, which was created in the interwar period by the then President of Poland Ignacy Mościcki and Minister of State Treasury Eugeniusz Kwiatkowski.
19 integrated report | 2013
Management Board Krzysztof Burzański President of the Management Board
Krzysztof Mendecki Member of the Management Board
Supervisory Board Anna Gol Chairperson of the Supervisory Board
Wiesław Olszak Vice-Chairperson of the Supervisory Board
Adam Leszkiewicz Member of the Supervisory Board
Kinga Śluzek Member of the Supervisory Board
Ewa Sobczyk Secretary of the Supervisory Board
Kamil Zwolański Member of the Supervisory Board Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Grupa Azoty ATT Polymers full name: Grupa Azoty ATT Polymers GmbH
Grupa Azoty ATT Polymers GmbH was established over 50 years ago. Consolidation Grupa Azoty ATT Polymers joined the consolidation of the Grupa Azoty Group in 2010, when Grupa Azoty S.A. acquired 100% of the shares in the German company, which was then in bankruptcy.
Specialist focus Grupa Azoty ATT Polymers is engaged in the production and sale of polyamide 6, marketed under the trade name of Alphalon™.
Management Board Krzysztof Pieńkowski Managing Director
Jacek Dychtoń Managing Director
The business of Grupa Azoty ATT Polymers includes the processing of caprolactam into polyamide 6, natural or modified, with relative viscosities of 2.4–4.0. The company’s aggregate production capacities are about 45 kt per year. The production facilities in Guben are characterised by considerable flexibility, allowing the company, and consequently the Grupa Azoty Group, to easily respond to changing customer needs.
20 integrated report | 2013
Supervisory Board Andrzej Skolmowski Chairperson of the Supervisory Board
Małgorzata Malec Vice-Chairperson of the Supervisory Board
Jan Wais Member of the Supervisory Board Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Grupa Azoty SIARKOPOL full name: Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki „Siarkopol” S.A.
Grupa Azoty SIARKOPOL has operated for nearly 50 years. Consolidation Grupa Azoty SIARKOPOL joined the consolidation of the Grupa Azoty Group in 2013, when Grupa Azoty S.A. acquired an 85% interest in the company.
Specialist focus Grupa Azoty SIARKOPOL offers the following sulfur-based products: ■■ liquid sulfur,
Management Board Marian Kosowicz President of the Management Board, Director General
■■
granulated sulfur,
Dariusz Bednorz
■■
milled sulfur,
Vice-President of the Management Board
■■
flaked sulfur,
Mirosław Osiecki
■■
carbon disulfide,
Vice-President of the Management Board
■■
sulfur insoluble in CS2 – POLSINEX.
Zbigniew Snopkiewicz Member of the Management Board
The company is one of few producers of sulfur insoluble in carbon disulfide, which is an important raw material for the tyre industry. The company’s Osiek sulfur mine is currently the world’s only native sulfur mine using the underground melting method to extract the mineral. The mine’s production capacity ranges from 600 thousand to 960 thousand tonnes per year. Exports account for 80% of Grupa Azoty SIARKOPOL’s revenue.
Supervisory Board Marek Kapłucha Chairperson of the Supervisory Board
Barbara Haraburda Vice-Chairperson of the Supervisory Board
Andrzej Kapłan Secretary of the Supervisory Board
Sławomir Krawczykowski Member of the Supervisory Board
Wojciech Naruć Member of the Supervisory Board
Witold Szczypiński Member of the Supervisory Board Correct as at 17 July 2014
21 integrated report | 2013
G r u pa A zot y Com pan i e s Grupa Azoty KOLTAR full name: Grupa Azoty „Koltar” spółka z ograniczoną odpowiedzialnością
KOLTAR was established nearly 15 years ago, following the transformation of Zakład Transportu Kolejowego, a railway transport business unit which was then part of Zakłady Azotowe w Tarnowie-Mościcach S.A.
Specialist focus Within the Grupa Azoty Group, the company is responsible for railway transport of goods, forwarding, infrastructure maintenance and rolling stock management. It also successfully provides its services to customers outside the Group.
Consolidation Grupa Azoty KOLTAR is a direct subsidiary of Grupa Azoty S.A. Initially, the company’s business consisted only in maintenance of the rolling stock and railway siding of Zakłady Azotowe w Tarnowie-Mościcach S.A., but as the company developed, it started to provide services to external customers, including the Group companies.
In 2013, the company set on tracks more than 1,300 trains, which have covered over 160 thousand train-kilometres running on PKP PLK S.A. tracks. Grupa Azoty KOLTAR has been maintaining its position as a valued service provider in Poland in the area of rolling stock repairs and licensed transportation services, seeking to expand the latter business. The company is one of the few business operators in Poland licensed to perform comprehensive repairs of rail car chassis and tanks suitable for transporting hazardous materials.
22 integrated report | 2013
Management Board Piotr Golemo President of the Management Board, Director General
Jarosław Wrona Vice-President of the Management Board, Financial Director Correct as at 17 July 2014
G r u pa A zot y Com pan i e s Grupa Azoty PKCh full name: Grupa Azoty Polskie Konsorcjum Chemiczne spółka z ograniczoną odpowiedzialnością.
Grupa Azoty PKCh was established over 5 years ago. Consolidation Grupa Azoty PKCh consolidated with the Grupa Azoty Group in 2009 (when Grupa Azoty S.A. and the Grupa Azoty ZAK acquired interest in the company – 25% each). Next Grupa Azoty S.A. (previously Zakłady Azotowe w TarnowieMościcach S.A.) acquired 50% interest in PKCh from the Ciech Group, and then together with Grupa Azoty ZAK S.A. (previously ZAK S.A.) acquired additional shares in PKCh (Polskie Konsorcjum Chemiczne) as a result of the share capital increase by bringing shares of: Biuro Projektów Zakładów Azotowych ‘BIPROZAT’ – Tarnów Sp. z o.o., Jednostka Ratownictwa Chemicznego Sp. z o.o., PROReM Sp. z o.o., ZWRI Sp. z o.o., AUTOMATYKA Sp. z o.o., ASTER ZAK Sp.z o.o., ZAK SERWIS Sp.z o.o., REKOM Sp.z o.o., CHEMZAK Sp.z o.o. (those companies have been mergered, except for ZWRI Sp. z o.o., which has been sold). As a result of those changes the Grupa Azoty Group is holding 63.27% shares in Grupa Azoty PKCh and Grupa Azoty ZAK S.A. is holding 36.73% shares. Grupa Azoty PKCh plays a vital role in the Group’s consolidation through integrating and reorganizing companies’ production environment. The process has been ongoing since 2011.
Specialist focus Grupa Azoty PKCh offers high-quality, comprehensive services related to design, preparation and implementation of investment projects, as well as repairs, maintenance and keeping of the Grupa Azoty Group’s production lines in operational condition. Additionally, the activities of Grupa Azoty PKCh also include management of highly specialised subsidiaries. The Grupa Azoty PKCh Group comprises: ■■ Grupa Azoty Jednostka Ratownictwa Chemicznego sp. z o.o., ■■ Grupa Azoty Prorem sp. z o.o., ■■ Grupa Azoty Automatyka sp. z o.o.
Management Board Jerzy Woliński President of the Management Board
Beata Kurbiel Member of the Management Board
Henryk Chromik Member of the Management Board
Marek Zatorski Member of the Management Board
Supervisory Board Witold Szczypiński Chairperson of the Supervisory Board
Mirosław Ptasiński Deputy Chairperson of the Supervisory Board
Krzysztof Kamiński Member of the Supervisory Board
Andrzej Skolmowski Member of the Supervisory Board
Rafał Smoła Secretary of the Supervisory Board Correct as at 17 July 2014
23 integrated report | 2013
G r u pa A zot y Com pan i e s Grupa Azoty prorem
Grupa Azoty JRCh
Grupa Azoty Automatyka
full name: Grupa Azoty Prorem spółka z ograniczoną odpowiedzialnością
full name: Grupa Azoty Jednostka Ratownictwa Chemicznego spółka z ograniczoną odpowiedzialnością
full name: Grupa Azoty Automatyka spółka z ograniczoną odpowiedzialnością
A subsidiary of Grupa Azoty PKCh. Grupa Azoty PROREM is a services company.
A subsidiary of Grupa Azoty PKCh. Grupa Azoty JRCh is a service provider and manufacturing company.
A subsidiary of Grupa Azoty PKCh. Grupa Azoty AUTOMATYKA is a services company.
Specialist focus Grupa Azoty PROREM specialises in supervision, delivery, start-up and commissioning of newly developed and operated facilities.
Specialist focus Grupa Azoty JRCh’s offering includes specialised rescue services, performance of high-risk work and wastewater treatment.
Its specialist services consist in: ■■ repairs and construction of chemical installations and steel structures; steam generators and water boilers; fixed pressurised and non-pressure tanks and other specialist industrial facilities;
The company specialises in: ■■ collection, treatment and storage of hazardous waste (including asbestos) and other waste,
Specialist focus The core business of Grupa Azoty AUTOMATYKA comprises design, installation, start-up and servicing of industrial control and instrumentation systems. Besides industrial automatics and C&I systems, the company is also active in the following areas: ■■ power engineering,
■■
■■
comprehensive handling of industrial projects: construction and repair of process installations for the chemical, petrochemical and power industries; mounting or erection of industrial facilities and installations; heat transfer stations, heat exchange plants; gas installations, ventilation systems; transmission pipelines; steel structures, hoisting facilities.
The company also offers testing services, including radiography (non-destructive testing), ultrasonic, magnetic particle and penetration thickness gauging. It specialises in machinery diagnostics and water jet cutting.
■■
production of chemicals and sale of feedstocks for chemical production,
■■
specialised rescue services, performance of high-risk work,
■■
industrial wastewater treatment,
■■
packaging of liquid and loose materials.
Grupa Azoty JRCh has PCA-accredited laboratories which perform tests and analyses of wastewater, waste, water, hazardous agents present in the workplace, emission of substances into the atmosphere, nutrition and foodstuffs. The laboratories also offer a wide range of microbiological and veterinary diagnostic tests. Moreover, Grupa Azoty JRCh provides professional and specialised training, as well as skill improvement courses.
■■
security systems,
■■
telecommunications,
■■
IT. The company is able to provide such a broad range of services thanks to its vast technical resources. The high qualifications of its employees and their experience in the fields of chemical production, power generation and environmental protection have allowed the company to efficiently develop new dedicated solutions and, if necessary, integrate them with systems already operated by its customers. The company has modern diagnostic, repair and calibration workshops for measuring instruments and control system elements, machine shops, a 0.4 and 6 kV test bench and a calibration laboratory. Management Board Artur Maciejczyk President of the Management Board
Robert Buczek Management Board Artur Sebesta
Management Board Leszek Gniadek
Vice-President of the Management Board, Chief Financial Officer
President of the Management Board
President of the Management Board
Janusz Semeniuk
Andrzej Paryło
Agata Gorzkowska-Rams
Vice-President of the Management Board
Member of the Management Board
Vice-President of the Management Board, Chief Operating Officer
Katarzyna Piekarska Member of the Management Board, Finance
Correct as at 17 July 2014
Supervisory Board Jerzy Woliński Chairperson of the Supervisory Board
Maciej Włoch
Correct as at 17 July 2014
Member and Secretary of the Supervisory Board
Wiesław Kozioł Member of the Supervisory Board 24 integrated report | 2013
Correct as at 17 July 2014
25 integrated report | 2013
Companies, like people, grow, learn, identify their surroundings. But only a select few get to set out into the wide world and explore distant countries and continents. 26 integrated report | 2013
G ROUP ’ S EXPANSION
G4-13
Over the last six years, Grupa Azoty S.A. has pursued a strategy to consolidate the most valuable assets of the Polish chemical industry. As a result, it has brought together under a single brand a host of companies with different traditions and complementary business profiles. In 2009−2012, the Grupa Azoty Group was joined by two companies operating in the Polish sector of ’large-scale chemical synthesis’ (heavy chemicals), based in Kędzierzyn-Koźle and Police, as well as a German company based in Guben. The most important event of 2013 was the concluded acquisition of Grupa Azoty Puławy shares. Other integration processes were also ongoing in that period, as a result of which the Grupa Azoty Group has developed into a strong conglomerate. The management model adopted by the Group supports its consolidation and effective management of the growing organisation (for more information, see ’Management model’). These developments have primarily delivered economic benefits, but, what is also important, they may have an effect on the Grupa Azoty Group’s future impact on its social and natural environment1.
The Group’s own phosphate rock reserves in Senegal
SIARKOPOL in the Grupa Azoty Group
In August 2013, Grupa Azoty Police purchased a 55% interest in African Investment Group S.A. (Afrig S.A.). Afrig S.A. holds licences for the development of phosphate and ilmenite rock reserves in Senegal. Thanks to the transaction, Grupa Azoty Police has become the first Polish chemical company with its own mineral deposits. As it no longer depends on external suppliers, the company should be able to save ca. PLN 30m in 2014 alone.
In Q4 2013, Grupa Azoty S.A. acquired an 85% equity interest in Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. of Grzybów, assuming control over the company.
Its presence in Senegal is also expected to aid the company’s plans of sales expansion in Africa, as ships carrying the minerals to Police would carry back fertilizers for sale on African markets, which would optimise costs. In the target logistics structure, currently under consideration, the phosphoric acid manufacture would be launched locally, in Senegal.
The new company, currently operating under the name of Grupa Azoty Siarkopol, has strengthened the Grupa Azoty Group by enhancing its access to strategic feedstocks. On the other hand, Grupa Azoty Siarkopol has gained access to new foreign markets thanks to the synergies with Grupa Azoty S.A., including the latter’s extensive trade relationships. Grupa Azoty S.A. has committed to invest PLN 30m in Siarkopol’s plant to stabilise production and improve the level and quality of sulfur granulation.
Calendar of acquisitions 2007–2013
9.8 Acquisition of a controlling interest in ZA Puławy S.A. Acquisition of an 85% interest in KiZCHS „Siarkopol” S.A.
7.1 Acquisition of a 10.3% interest in ZA Puławy S.A. in the first tender offer
5.3 Acquisition of a 66% interest in Z.Ch. Police S.A. Acquisition of a 41% interest in ZAK S.A.
Acquisition of Unylon Polymers GmbH Acquisition of a 53% interest in ZAK S.A.
1.9 1 The organisational structure of the Grupa Azoty Group and the changes ongoing therein are described in detail in the Directors’ Report on the Operations of Grupa Azoty S.A. for the 12 months ended December 31st 2013, available at http://tarnow.grupaazoty.com/pl/relacje/ raportyr.
1.3
1.4
2007
2008
1.2 2009
2010
2011
2012
Skonsolidowane przychody w mld zł 27 integrated report | 2013
2013
G ROUP ’ S EXPANSION
G4-16
Grupa Azoty’s membership in organisations
1. Polska Izba Przemysłu Chemicznego (Polish Chamber of Chemical Industry − PIPC)
27. Stowarzyszenie Zachodniopomorski Klaster Chemiczny (West Pomerania Chemical Cluster)
2. Fertilizers Europe
28. Towarzystwo Ziemi Kozielskiej (Koźle Region Association)
3. Plastics Europe 4. ECPI (European Council for Plasticisers and Intermediates) 5. INCOPA (Inorganic Coagulants Producers Association) 6. TDMA (Titanium Dioxide Manufactures Association) 7. IFA (International Fertilizer Industry Association) 8. EMPA (European Melamine Producers Association), a Sector Group of CEFIC 9. Pracodawcy RP (Employers of Poland) 10. Polski Związek Przetwórców Tworzyw Sztucznych (Polish Association of Plastics Processing Companies) 11. Jury of the Responsible Care programme 12. Stowarzyszenie Emitentów Giełdowych (Polish Association of Listed Companies) 13. CEFIC (European Chemical Industry Council) 14. EPF (European Panel Federation) 15. EPCA (European Petrochemical Association) 16. European Sulphuric Acid Association 17. Polskie Forum AkademickoGospodarcze (Polish Higher Education-Business Forum) 18. Polish-Brazilian Chamber of Commerce 19. Grupa Promocyjna NPG-6 (NPG-6 Promotional Group) 20. Izba Przemysłowo-Handlowa w Krakowie (Kraków Chamber of Commerce and Industry) 21. Izba Energetyki Przemysłowej i Odbiorców Energii (Polish Chamber of Industrial Power and Energy Consumers) 22. Północna Izba Gospodarcza (North Poland Chamber of Commerce) 23. Tarnowskie Towarzystwo Naukowe (Tarnów Scientific Association) 24. Regionalna Izba Gospodarcza (Regional Chamber of Commerce) 25. Brytyjsko-Polska Izba Gospodarcza (British Polish Chamber of Commerce) 26. Business Club Szczecin (Szczecin Business Club)
29. Stowarzyszenie Elektryków Polskich (Association of Polish Electrical Engineers), Management Board of the Tarnów Division 30. Izba Przemysłowo-Handlowa w Tarnowie (Tarnów Chamber of Commerce and Industry) 31. Puławska Izba Gospodarcza (Puławy Chamber of Commerce) 32. BCC (Business Centre Club) 33. Opolska Izba Gospodarcza (Opole Chamber of Commerce) 34. Tarnowski Klub Techniki i Racjonalizacji (Tarnów Club of Technology and Technological Improvements) 35. Polska Izba Rzeczników Patentowych (Polish Chamber of Patent Attorneys) 36. Polskie Forum ISO 9000 (Polish ISO 9000 Forum) 37. Stowarzyszenie Inżynierów i Techników Przemysłu Chemicznego (Polish Association of Chemical Engineers)
47. Forum Liderów Bezpiecznej Pracy (Forum of Safe Work Leaders) 48. Krajowa Sieć Informatyczna Europejskiej Agencji Bezpieczeństwa i Zdrowia w Pracy (National IT Network of the European Agency for Safety and Health at Work) 49. Komitet Chemii Polskiej Akademii Nauk (Chemistry Committee of the Polish Academy of Sciences) 50. Centrum Zaawansowanych Technologii przy Instytucie Chemii Przemysłowej (Advanced Technology Centre at the Industrial Chemistry Institute) 51. Polska Platforma Technologiczna Wodoru i Ogniw Paliwowych (Polish Hydrogen And Fuel Cell Technology Platform) 52. Polska Platforma Technologiczna Zrównoważonej Chemii (Polish Technological Platform for Sustainable Chemistry) 53. Polska Platforma Technologiczna − Bezpieczeństwo Pracy w Przemyśle (Polish Technological Platform for Safety at Industrial Work Places) 54. Narodowa Fundacja Ochrony Środowiska (National Foundation for Environmental Protection)
38. Klub Polskich Laboratoriów Badawczych POLLAB (POLLAB Club of Polish Research Laboratories)
55. Polska Grupa Bezpieczeństwa Chemicznego (Polish Chemical Safety Group)
39. Stowarzyszenie Eksporterów Polskich (Association of Polish Exporters)
56. Towarowa Giełda Energii S.A.
40. Stowarzyszenie Księgowych w Polsce (Accountants Association in Poland) 41. Stowarzyszenie Konsumentów i Importerów Soli Potasowej (Association of Consumers and Importers of Potassium Chloride) 42. ISSA (International Security Systems Association) 43. Stowarzyszenie Księgowych w Polsce (Kraków Branch of Accountants Association in Poland) 44. PTBRiO – Polskie Towarzystwo Badaczy Rynku i Opinii (Polish Association of Public Opinion and Market Research Firms) 45. Forum ISO 14000 (Polish ISO 14000 Forum) 46. System pomocy w transporcie materiałów niebezpiecznych SPOT (SPOT System of Assistance in Hazardous Material Transport)
28 integrated report | 2013
57. Forum Dużych Konsumentów Gazu (Large Gas Consumer Forum) 58. Naczelna Organizacja Techniczna NOT (Polish Federation of Engineering Associations NOT) 59. Izba Rzemieślnicza oraz Małej i Średniej Przedsiębiorczości w Tarnowie (Tarnów Chamber of Craft and SMEs) 60. Puławskie Centrum Przedsiębiorczości (Puławy Entrepreneurship Centre) 61. Konsorcjum Info-Tech-Med (Info-Tech-Med Consortium) 62. Klub Sportowy Azoty-Puławy (Azoty-Puławy Sports Club) 63. Fundacja Pomocy Szpitalowi Puławskiemu (Puławy Hospital Assistance Foundation) 64. Puławska Szkoła Wyższa (Higher School of Puławy) 65. Polski Komitet Normalizacyjny (Polish Committee for Standardization)
G ROUP ’ S EXPANSION Important business awards and high ranking positions in 2013
january
june
2012 Platinum Laurels of Skills and Competence awarded to the President of the Grupa Azoty Management Board in the manager/ community and business leader category by the Opole Laurels of Skills and Competence Jury.
Grupa Azoty in the high, 33rd place of the 1,000 Top Polish Companies league table prepared by the editorial board of Gazeta Finansowa, where companies are rated by revenue.
febuary Grupa Azoty S.A. named ’Polish Industry Transformer’ in recognition of its consolidation with Zakłady Azotowe Puławy. The awards are organised by Grupa Polskie Towarzystwo Wspierania Przedsiębiorczości, the publisher of Nowy Przemysł monthly and wnp.pl website.
april Grupa Azoty won the first prize in the 2012 edition of the Pillars of Polish Economy survey in recognition of its outstanding contribution to the Kraków region. The survey is administered by a leading research agency in partnership with Puls Biznesu daily. Grupa Azoty ZAK S.A. won a similar distinction in the Opole region. Grupa Azoty ranked 30th in the Top 500 Polish Businesses league table compiled by Rzeczpospolita daily. Grupa Azoty Puławy named ’Reliable Employer’ in the 2012 edition of the award.
may Grupa Azoty in the high, 25th position of the Top 500 Polish Companies ranking list published by Polityka weekly (in terms of consolidated revenue).
september Rzeczpospolita Ranking List. Rzeczpospolita daily and Deloitte teamed up to compile a ranking table of the largest companies in 18 countries, published on September 4th. The most impressive leap among Polish companies was made by Grupa Azoty, which climbed from the 144th to the 98th position.
november Grupa Azoty Puławy was a second-time winner of the ’Well-Perceived Company’ survey run by the Business Centre Club’s Association of Employers. The annual Polish Chemical Awards were presented during the national Polish Chemical Forum conference. Grupa Azoty received the awards in three out of the nine categories. Grupa Azoty President named TOP EXECUTIVE OF THE YEAR for setting and delivering on bold visions of growth, implementing future-oriented innovative projects, and aptly leveraging synergies at the time of a new beginning for the Polish strategic chemical company. Grupa Azoty S.A. received the Chemical Company of the Year award for its consolidation of the chemical industry and ambitious growth strategy, including its landmark petrochemical project pursued jointly with Grupa LOTOS. Grupa Azoty Puławy won the INVESTMENT PROJECT OF THE YEAR award for its wet ammonia FGD unit (Europe’s first and the world’s third facility of its kind), liquid sulfur fertilizer unit, and new logistics centre.
29 integrated report | 2013
During the 19th National Scientific and Technical Conference entitled ’Chemical Industry − Challenges and Barriers’, the jury of SITP Chem’s ’Restructuring Leader’ award recognised the Tarnów-based company for ’creating a chemical group that is reshaping the industry’, and awarded a distinction to Grupa Azoty’s President for his commitment to the development of the Polish chemical industry. The jury also expressed their appreciation for Grupa Azoty Puławy’s restructuring efforts.
december During the Pearls of Polish Economy Gala event, held at the Royal Castle in Warsaw, awards and honours were given to Poland’s major companies. In the 2013 edition, Grupa Azoty S.A. was awarded a certificate and the Pearl of Polish Economy status in the Large Pearls category by the editional board of the Polish Market magazine and the Institute of Economics of the Polish Academy of Sciences. Grupa Azoty Puławy also received a ’Pearl of Polish Economy’ certificate in the Large Pearls category for the consistent pursuit of its corporate policy and strategic goals and for its leading position among the most dynamic and efficient businesses in Poland. Grupa Azoty ZAK S.A was honoured with the Konfederatka award by the Employers of Poland for initiating and supporting important business initiatives and for CSR engagement.
The truth about a company cannot be learned solely from its income statement. The real proof of quality lies in its list of shareholders, people who believed in its vision and strategy. 30 integrated report | 2013
S c al e o f t h e o rgan i s at i o n an d ow n er s h i p s t r u c t u r e
2012
2013
8 607 (9 235*)
13 879 (9 335)
7 098 735
9 821 023
315 301
713 525
3 490 698
6 270 651
5 357 041
9 961 530
G4-9
The scale of the Grupa Azoty Group is best illustrated by its key employment, sales and asset figures.
Year-end headcount at the Group (including companies covered by this Report) Revenue (PLN ’000) Net profit (PLN ’000) Equity (PLN ’000) Total assets (PLN ’000)
G4-7
* This includes Grupa Azoty Puławy. The company was not part of the Group in 2012 and its financial statements were not consolidated.
Shares
Ownership interest (%)
Voting rights
% of voting rights
32 734 509
33.00
32 734 509
33.00
Norica Holding S.à.r.l., including Cliffstone Holdings Limited
15 216 094
15.34
15 216 094
15.34
ING Pension Fund
9 883 323
9.96
9 883 323
9.96
TFI PZU S.A.
8 689 591
8.76
8 689 591
8.76
Aviva OFE / Aviva BZ WBK
7 800 000
7.86
7 800 000
7.86
EBRD
5 700 000
5.75
5 700 000
5.75
Other
19 171 967
19.33
19 171 967
19.33
Total
99 195 484
100.0
99 195 484
100.0
Shareholder State Treasury of Poland
*Ownership structure as at December 31st 2013
Grupa Azoty shares are traded on the main market of the WSE. The stock is included in the WIG and mWIG40 indices, as well as the WIG-Chemia index of the chemical sector, the blue-chip WIG 30 index, and the RESPECT Index of socially responsible companies (since its inception). In February 2013, Grupa Azoty S.A. became part of the prestigious MSCI Emerging Markets index. Its two subsidiaries, Grupa Azoty Police and Grupa Azoty Puławy, are also listed at the WSE.
GrupA Azoty S.A. Ownership structure
Other 19.33% State Treasury of Poland 33% EBRD 5.75% Aviva OFE, Aviva BZ WBK 7.86%
TFI PZU S.A. 8.76%
Grupa Azoty S.A. ownership structure as at June 11th 2014 State Treasury of Poland 33% Norica Holding S.à.r.l., including Cliffstone Holdings Limited 20% ING Pension Fund 9,96% TFI PZU S.A. 8,76% EBRD 5,75% Other 22,53%
ING Pension Fund 9.96%
Norica Holding S.à.r.l., including Cliffstone Holdings Limite 15.34%
Ownership structure as at December 31st 2013
31 integrated report | 2013
Today, a business strategy cannot be separated from a social responsibility strategy, just as growth cannot be separated from sustainable growth.
G4-56
The Grupa Azoty Group is pursuing a long-term growth strategy in line with the principles of sustainable development and corporate social responsibility. This comprehensive approach to business performance helps maintain a balance between the financial, social and environmental aspects of the Group companies’ operations.
G4-56
G4-2
B usi n e s s s t r at egy an d sus tai nab l e d e v elo pm en t
This Integrated Report is just one example of the Group’s integrated approach to business. The key document defining the Group’s vision of development and value creation, to be realised by consistently improving its competitive edge and sustainably expanding its presence in the global chemical market, is the Grupa Azoty Group’s revised strategy for 2013−20202. The strategy recognises the new opportunities arising from the Company’s consolidation with Zakłady Azotowe Puławy (renamed as Grupa Azoty Puławy).
The cornerstone of the Grupa Azoty Group’s strategy is its mission, which places a strong emphasis on its CSR goals. Striving to build value for shareholders, the Group is also aware of the important role it plays in the community.
Mission statement We add life to the soil, and colour to life. With our accumulated experience and expanding capabilities, we make chemicals safe to people. We consistently strive to increase the value of Grupa Azoty, taking advantage of all available synergies and innovations. To successfully meet market challenges, Grupa Azoty needs to be innovative and exploit all available sources of synergy. In 2013 alone, it achieved PLN 90m in synergy savings. Poland’s largest chemical companies integrated into a single entity benefit from the economies of scale, shared distribution and procurement functions and the immense potential of complementary capabilities. However, to tackle future challenges, we must further the integration and consolidation processes within the Group.
In its strategy, Grupa Azoty has stated that by the end of this decade it aims: ■■
to be listed in the blue-chip index of the Warsaw Stock Exchange,
■■
to be generating top rates of return for its shareholders, and
■■
to remain one of the three leading players in the European fertilizer market.
2 The full text of the Grupa Azoty Group’s updated strategy for 2013−2020, including its declared approach to corporate social responsibility, is available at: http://grupaazoty.com/pl/grupa/ strategia.
32 integrated report | 2013
B usi n e s s s t r at egy an d sus tai nab l e d e v elo pm en t
2013−2020 strategy – Directions of growth In its strategy, Grupa Azoty has assumed it will grow by: ■■
increasing the scale of operations in its core business areas through organic growth, alliances and M&As, both in Poland and abroad,
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further integration within the Group to maximise operating synergies,
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reducing the Grupa Azoty Group’s sensitivity to energy costs through the use of effective technologies and energy-efficient solutions,
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reducing the Group’s sensitivity to changing economic cycles and to prices of natural gas and petrochemical feedstocks by extending product chains,
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reducing production costs by extending product chains,
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building stable and effective customer relations, increasing awareness of the Group’s leading brands and optimising product logistics and distribution,
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improving the efficiency of key processes defined in the management model,
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continuously adapting the quality and range of products to customer requirements,
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horizontal diversification, leveraging synergies with the existing product portfolio,
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continuously improving its products based on innovative technologies,
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growing the organisation’s intellectual capital and transforming that potential into an asset with substantial market value.
The overriding corporate growth strategy is supported by a number of functional strategies. At present, a CSR strategy is being developed as part of the corporate management strategy. The first Group company to define a sustainable development strategy was Grupa Azoty S.A. of Tarnów (Grupa Azoty Tarnów Sustainable Development Strategy for 2011−2016), which was the starting point for work on a similar document covering the entire Group. The document lists the following areas of responsibility: ■■
sustainable production (reducing the environmental impact of the Group companies, fostering partnerships with research institutions, raising environmental awareness, developing sustainable products, and continued engagement in the Responsible Care® programme, where chemical companies voluntarily commit to improving their performance in the fields of environmental protection, workplace and plant safety, and ongoing dialogue with their external stakeholders),
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workplace (improving employee satisfaction, workplace safety and health protection, and providing staff development opportunities),
■■
dialogue and relationship building (promoting the development of local communities, defining the forms of dialogue with each of the key stakeholder groups, maintaining effective communication in the area of sustainable development, and building a culture of ethics).
33 integrated report | 2013
G4-34
Manag em en t m od el an d co r e valu e s
The Management Board of Grupa Azoty S.A. performs the function of the Management Board of the Grupa Azoty Group. The remit of the President includes general oversight of the Grupa Azoty Group, while the Management Board members are responsible for key areas of the Group’s operations: finance, strategy and development, investments, integration of production processes, plastics and organic synthesis, supply chain management, social dialogue, plant safety and environmental protection, as well as the management of individual Group companies. The Grupa Azoty Group’s successful consolidation is a source of massive business potential. With the adopted management model, the Group is able to generate and leverage synergies, and to tap the economies of scale. In 2013 alone, the effect of synergies was estimated at about PLN 90m.Despite the centralisation of the Grupa Azoty Group’s main operations and management of core economic processes at the Group level, the subsidiaries’ identities, locations and legal autonomy are preserved. 1
President of the Management Board Paweł Jarczewski
2
new Management model In July 2013, the Management Board of Grupa Azoty S.A. approved the assumptions for a new model of the Group’s management, built on a process-based division of powers and responsibilities between the Company’s Management Board members. In the same month, the document ’Ownership and governance policy’ was revised, following the inclusion of new companies in the Grupa Azoty Group. The overall purpose of the corporate governance policy is to have in place uniform Group-wide procedures for managing individual business processes (business areas), and procedures for reporting information to the governing bodies and making disclosures to capital market participants; and to ensure that the disclosure requirements and the criteria for assessment of compliance with those requirements are uniform and consistent. Grupa Azoty Council In December 2013, the Grupa Azoty Council was set up as an advisory and opinion-making body responsible for initiating and backing Group-wide projects and communicating their progress to the managements of individual Grupa Azoty Group companies. The Council presents its opinions on their 3
4
Vice-President of the Vice-President of the Management Board Management Board Andrzej Skolmowski Witold Szczypiński
Management and HR
Finance
Tarnów
Auditing, risks and compliance
Planning and controlling
Plastics Business Centre
Communications
IT
Organic Synthesis Business Centre
Agro Business Centre
IR
Production integration
Business service
initiatives and strategic measures, and supports their day-to-day management. It consists of members of the Grupa Azoty Management Board, members of the management boards of the Company’s subsidiaries, and the Managing Director of Grupa Azoty S.A. In keeping with the growth of the Grupa Azoty Group, which is intended to operate as a single business entity, the organisational structure of Grupa Azoty S.A. was subject to a number of modifications to ensure it is able to effectively manage the complex and everexpanding organisation
3 For more information on the adopted management model, refer to the Directors’ Report on the Operations of Grupa Azoty S.A. in the 12 months ended December 31st 2013, available at http://tarnow. grupaazoty.com/pl/relacje/raportyr. All members of the Grupa Azoty Council are presented at http:// grupaazoty.com/pl/grupa/zarzadzanie/d. For details on the current composition of the Management Board and profiles of its members, see http://tarnow. grupaazoty.com/pl/relacje/lad/zarzad, and for details on the current composition of the Supervisory Board and profiles of its members, go to http:// tarnow.grupaazoty.com/pl/relacje/lad/rada. 4 The modifications are described in more detail in the Directors’ Report on the Operations of Grupa Azoty S.A. in the 12 months ended December 31st 2013, which is available at: http://tarnow.grupaazoty.com/pl/relacje/raportyr.
5
Vice-President of the Vice-President of the Management Board Management Board Krzysztof Jałosiński Marek Kapłucha
6
7
Vice-President of the Member of the Management Board Management Board Marian Rybak Artur Kopeć
Police
Supply chain
Puławy
Dialog społeczny
Feedstock Supply Integration and Maritime Logistics Centre
Logistics support service
Investments
Plant safety and environmental protection
Engineering support service
Infrastructure service
Strategy and development
Energy service
34 integrated report | 2013
Internal audit
The Grupa Azoty Group is managed based on integrated management systems, in accordance with international standards..
The Grupa Azoty Group companies identify risks associated with different aspects of their operations. Aware that risk factors may pose a threat to sustainable development in the long term, the Grupa Azoty Group takes systematic steps to identify, assess and minimise their potential negative impact on the operating performance of the Group companies.
The Grupa Azoty Group has a robust internal audit system in place. The process is managed by the Group Internal Audit Office and Internal Audit Departments at individual companies. At the Group level, the process is managed in accordance with the International Standards for the Professional Practice of Internal Auditing developed by the Institute of Internal Auditors (IIA), and the related internal regulations. The role of the internal audit units is to streamline the Group’s operations and ensure that its corporate governance system is appropriate and effective. In addition, the Group Internal Audit Office and individual Internal Audit Departments are to support the Grupa Azoty Group companies in consistent and methodological approach to the performance evaluation and management process enhancement.
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Quality Management System compliant with the ISO 9001:2008 standard,
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Environmental Management System compliant with the ISO 14001:2004 standard,
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Occupational Health and Safety Management System compliant with the PN-N-18001:2004 and BS OHSAS 18001:2007 standards,
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Management System compliant with the PN-EN ISO/IEC 17025:2005 standard (general requirements for the competence of testing and calibration laboratories),
■■
Food Safety Management System compliant with the ISO 22000:2005 standard,
■■
Automotive Industry Quality Management System implemented in accordance with the ISO/TS16949:2009 standard,
■■
Responsible Care Framework Management System compliant with the guidelines of the European Chemical Industry Council,
G4-15
■■
Energy Management System compliant with the ISO 50001: 2011 standard (applicable to the Grupa Azoty Police Group)
In addition to maintaining and enhancing the above management systems, the Grupa Azoty Group also embraces new standards, for instance by designing and implementing the enterprise risk management system and the Product Stewardship Programme compliant with the standards adopted by Fertilizers Europe.
In keeping with the best global practice, the Grupa Azoty Group is implementing a comprehensive risk management system in its key companies. The system involves the design and implementation of certain organisational and procedural measures to provide a general framework for the management of risks identified in various areas of their operation. The Grupa Azoty Group’s risk management is based on global standards, in particular the ISO 31000:2009 standard (’Risk management – Principles and guidelines’) and the ’Enterprise Risk Management – Integrated Framework’ developed by COSO. As part of the project, the Group developed a concept for the enterprise risk management system and verified the risk map and register, including for key risks. Irrespective of the overall framework designed for the Grupa Azoty Group’s comprehensive risk management system, the Group companies have for years been identifying, assessing, and actively managing their own risks. Measures taken to minimise any identified threats to their business processes are subject to regular reviews based on system tools.
5 For more details, refer to the websites of individual Group companies. 6 For more information on risks and threats in the context of the Grupa Azoty Group’s growth prospects, refer to the Directors’ Report on the Operations of Grupa Azoty S.A. in the 12 months ended December 31st 2013, available at http://tarnow.grupaazoty.com/pl/relacje/raportyr
35 integrated report | 2013
G-2
The systems implemented bythe Grupa Azoty Group companies include5:
G-34
Risk management6 G-34
Integrated Management Systems
G-2
G4-34
MANAG EMENT MODEL AND CORE VALUES
The Group Internal Audit Office and Audit Departments perform their tasks on the basis of Annual Internal Audit Plans. In view of the Group’s growth, a single document entitled ’Internal Audit Standards for the Grupa Azoty Group’ was developed in 2013, providing a formal basis for carrying out internal audit procedures across the Grupa Azoty Group. In addition, all companies of the Grupa Azoty Group listed at the WSE have set up Audit Committees, acting as collective advisory bodies within their respective Supervisory Boards. Their responsibility is to monitor the effectiveness of internal control, internal audit and risk management systems in place at the Group companies.
MANAG EMENT MODEL AND CORE VALUES
Important capital market awards and high ranking positions in 2013
G4-15
Corporate governance The Grupa Azoty Group strives to ensure the highest standards in its relations with the capital market. The amended ’Code of Best Practice for WSE Listed Companies’ of November 2012 came into effect at the beginning of 2013 (except for the requirement to publish the records of General Meetings, in audio or video format, on corporate websites, and to provide all shareholders with an opportunity to participate in General Meetings using electronic means of communication, especially real-time two-way communication)7.
march The President of the Grupa Azoty Management Board received the ’Bulls and Bears’ award, granted for the past 19 years by Parkiet daily – in recognition of the successful consolidation of the chemical industry. The ’CEO of the Year’ title is awarded to outstanding personalities among the CEOs of companies listed on the WSE.
march
RESPECT Index
Grupa Azoty S.A. ranked tenth in the ’Listed Company of the Year 2012’ ranking, organised for the 14th time by Puls Biznesu daily – in recognition of its achievements in the preceding year. The Company received the highest scores for ’Investor Relations’ (6th place) and ’Previous Year’s Achievements’ (4th place).
Ever since 2009, Grupa Azoty S.A. has been included in the RESPECT Index – the first CSR-focused stock market index in Central and Eastern Europe. The Company’s inclusion in the RESPECT Index is a proof that it operates in accordance with the highest standards in corporate governance, corporate disclosure discipline, and investor relations, as well as environmental, social, and labour-related matters.
In the main ranking, Azoty Tarnów (currently Grupa Azoty S.A.) moved up 20 places compared with 2011, and as many as 256 places vs. 2009. Zakłady Azotowe Puławy (currently Grupa Azoty Puławy) and Zakłady Chemiczne Police (currently Grupa Azoty Police) also ranked high in the Puls Biznesu list, taking the 16th and 37th place, respectively.
Having passed the three-step evaluation process by the WSE, the Polish Association of Listed Companies and Deloitte, on December 17th 2013 the Company was included in the elite group of companies covered by the RESPECT Index for the seventh time.
april Grupa Azoty ranked first in the ’Ranking of listed companies demonstrating the strongest growth’, organised by Forbes; the President of the Grupa Azoty Management Board received a distinction in the ’Best CEOs of Listed Companies’ ranking by Forbes.
7 For more information on compliance with the corporate governance standards, refer to the Directors’ Report on the Operations of Grupa Azoty S.A. in the 12 months ended December 31st 2013, which is available at http://tarnow grupaazoty.com/pl/relacje/raportyr.
september Grupa Azoty S.A. received a statuette confirming its inclusion in the WIG30 index.
36 integrated report | 2013
MANAG EMENT MODEL AND CORE VALUES
G4-56
LA DMA12
HR DMA3
SO DMA5
SO DMA6
In 2013, the Grupa Azoty Group was working on the organisational framework and management system for its ethical conduct programme. Following a period of intensive work, the Management Board adopted two key documents8: ■■
’Code of Organisational Culture – the Grupa Azoty Group’s organisational and management system’
■■
’The Grupa Azoty Group’s Code of Ethical Conduct’.
The common ethical values, shared by employees of all companies and their plants, play a crucial role in corporate culture building, as they will strengthen the Group’s cultural integration, which will bring further benefits in the form of synergies. Soft management, or management through values shared by all employees, is a key to successful growth through mergers. Therefore, the Management Board and the Supervisory Board have good reasons to attach great importance to this aspect. The process started with the standardisation of all company names and adoption of a new brand which − while drawing on the remarkable and rich tradition of the Group companies − is focused on the future, growth and innovations. The two new Codes are currently being implemented.
8 The documents were formally approved in 2014.
G4-SO5
Ethical values and principles in the organisation’s management The ’Code of Organisational Culture’ highlights not only the Group’s corporate culture model and its source, but also defines the management standards and model, which is flexible and universal enough to allow for future growth through mergers and acquisitions. It also describes the brand and internal communication policies, as well as the management of relations with key stakeholders. The Code combines corporate culture issues with an approach to risk management, internal audit, and compliance management processes at the Group level. On the other hand, ’The Grupa Azoty Group’s Code of Ethical Conduct’ specifies the standards for the conduct of business, to be shared by all Grupa Azoty Group employees without exceptions. A special focus is placed on building proper and transparent relations with customers, suppliers, shareholders, the local community, and the natural environment. The Code also discusses proper behaviour in the event of a conflict of interest. The key part of the Code focuses on the fundamental ethical values by which the Grupa Azoty Group is guided.
The core values of the Grupa Azoty Group are: ■■
efficiency,
■■
professionalism,
■■
cooperation,
■■
respect,
■■
transparency.
37 integrated report | 2013
The provisions of the Code refer to the risk of corruption and breach of business secrets, as well as the need to protect confidential information. The Code categorically condemns and prohibits any forms of mobbing and discrimination on the grounds of race, ethnicity, religion, sexual preference, age, or gender. It also explicitly provides that the Group companies must remain apolitical and must not support any political parties, at the same time respecting the worldviews of their employees and prohibiting discrimination on the grounds of ideology. In addition, the Code prohibits anything that may harm the reputation of any person, including the spreading of false information about other employees and the Group (rumours). What is important, the Code prescribes procedures to be followed by employees who suspect a breach of the standards of ethics or who have found themselves in a situation which constitutes or may lead to a conflict of interest (which must be reported to immediate superiors or the Ethics Officer). The Code is available in traditional paper form at the Group companies and in electronic version at www. grupaazoty.com (in Polish, English and German). The person responsible to the Management Board for the effective implementation of the Code is the Ethics Officer. The Group’s management declares that all reported breaches of ethical standards will be carefully investigated. Given that the Code was formally adopted in 2014, it was not possible to record any suspected breaches of the Code reported in 2013. It should be noted, however, that in 2013 the Grupa Azoty Group identified no practices showing signs of corruption. No action was brought to court against the Grupa Azoty Group on the grounds of alleged corrupt practices, nor were there any instances of refusal to renew a business contract because of alleged corruption, or any cases of dismissal of a staff member on the grounds of such unethical behaviour.
38 integrated report | 2013
2 Responsible partner in business
39 integrated report | 2013
The market has long stopped being just a square downtown. Today the market is an open space, where vastly different elements and energies interact. Only the best are able to read its signals.
40 integrated integratedreport report| |2013W 2013
Mar ke t ov erv i e w
The flagging demand for melamine in Europe, coupled with higher supply of melamine produced with cheap gas, is also an unfavourable trend. At the same time, increased processing capacities for urea used in melamine production in the fertilizer industry have resulted in intensified competition and a noticeable decline in melamine prices around the world.
2013 saw not only growing competitive pressures on the national and international markets where the Grupa Azoty Group’s products are sold, but also many changes in our business environment; as a result, 2013 proved to be a challenging year for most key market players around the world. Low prices, combined with high prices of selected feedstocks, put a cap on profit margins, which ultimately turned out to be lower than in the preceding year.
Trends observed on the caprolactam market are also far from being favourable. The expansion of production capacities in Asia, mainly in China, subsequent to 2012 has depressed the product prices; the situation further deteriorated following a temporary decline in demand for polyamides (produced from caprolactam) on the back of the general economic situation worldwide. Oversupply of ammonium sulfate (a by-product of caprolactam production), caused by the larger output of caprolactam, may lead to price erosion also for this product.
From our perspective, a significant development was the progressing consolidation of the fertilizer distribution market in Poland. Other noteworthy trends included higher supply of fertilizers produced with cheap gas originating from countries neighbouring the EU, and the growing manufacturing capacities in the sector, which have led to intensified competition in the fertilizer markets. One of the factors with a bearing on the Company’s competitive position on the domestic and f oreign markets is also the increasing liberalisation of trade in the European Union. The Polish market is still protected by import duties; however, the lifting of customs duties on Ukrainian nitrate as of July 2012 could further intensify competition in this product segment. The European Commission has begun an analysis of the consequences of expiry of the antidumping duties on Russian nitrate. It means that the duties, which were to expire on July 13th 2013, will remain effective at least until the end of the proceedings, which may still continue for up to 15 months. After completion of the review, the Commission will propose that the duties be either maintained for another five years, or be lifted.
41 integrated report | 2013
Fer t i l i z er mar ke t
In 2013, the fertilizer market was affected by the low sentiment in agriculture, caused by sagging crop prices. The price decreases were attributable to high grain harvest forecasts both in the European Union and globally. As a result, 2013 saw a significant drop in the profitability of applying yield drivers, which adversely affected their sales, despite lower prices. Producers of fertilizers, including nitrogen fertilizers, remained under pressure in the first half of the year as farmers found nitrate fertilizers too expensive. The price level was additionally affected by delayed payment of subsidies and expected reduction in gas prices in Poland. Towards the end of the year, fertilizer producers, including the Grupa Azoty Group, announced considerable price cuts.
pressure on nitrate fertilizer prices. The price of ammonium nitrate, calcium ammonium nitrate, and ammonium sulfate also declined noticeably. In particular, the decline in prices of ammonium sulfate was driven by higher sulfate production capacities, for instance in Germany (DOMO Leuna) and Spain (UBE), accompanied by the increasing popularity of coarse-grained sulfate manufactured by compacting in Lithuania and Turkey. Price reductions were also seen in the case of ammonia, even though producers from Ukraine, Trinidad, Algeria, Egypt, Libya, and Qatar reduced their ammonia production volumes. In Poland, the demand for NPK fertilizers was also relatively low. Moreover, throughout the year Polish manufacturers had to face competition from attractively priced NPK fertilizers from Russia, Lithuania and Belarus.
A steep fall in the prices of urea, which emerged as a popular substitute for nitrate fertilizers, put
Pl a s t i c s
Benzene and phenol are the key feedstocks in the production of plastics. As far as benzene is concerned, the market in 2013 was unstable, with periodic shifts in supply and demand and speculative transactions. The market’s available benzene volumes were in constant decline.
The caprolactam market depends heavily on demand for polyamide and cost of raw materials linked to crude prices. In 2013, caprolactam prices were driven by volatile benzene prices and the growing production capacities in China, which led to oversupply and lower demand for the feedstock.
The benzene market and price forecasts had a strong impact on the phenol market, making it unstable. Europe continued to be affected by oversupply, and the largest European manufacturers were forced to temporarily reduce their phenol output.
Although the polyamide 6 market was stable in 2013, construction of new production units in Asia puts it under significant stress, as it may lead to lower exports to the region, paired with higher imports of Asian-made polyamide 6 to Europe.
42 integrated report | 2013
Ch em i c al s
2013 saw a slight increase in demand for hydrogen peroxide.
The beginning of 2013 saw rising propylene prices, which was a consequence of very high crude oil prices. The trend later reversed, and propylene prices declined in parallel with a drop in crude prices. August and September saw another increase in prices.
Global titanium white prices remained at low but stable levels in 2013. In the US and Europe, which are the largest consumers of the product, demand was limited as a result of the persistent weakness of the paints, varnishes, plastics, and automotive industries. Lower demand was also recorded in China (30% of titanium white’s global output), which was attributable to a decline in consumer goods exports.
Given the adverse market conditions, demand for key OXO alcohols (2-EH and n-Butanol) was satisfactory, and for the most part allowed product prices to be adjusted proportionately to feedstock prices.
On the other hand, sulfur prices declined by 26% on average in 2013 vs. 2012. The decline was attributable chiefly to the situation on the phosphate fertilizers market and the increased supply of petrochemical sulfur.
No significant negative shifts in demand or supply were seen in 2013. Demand for melamine only decreased in summer and winter, which are typically periods of weaker market activity.
Pow er sec to r
Electricity prices depend on prices of coal and CO2 emission rights, as well as cross-border transmission capacities and electricity demand. Contrary to predictions, the prices decreased significantly in 2013. A considerable decline in coal prices should also be noted; this was mostly due to the significant oversupply which continued throughout the reporting period. Polish coal producers kept in line with the global trend by lowering coal prices.
43 integrated report | 2013
G4-6
G4-12
Su pply chai n
In the area of feedstock supply, the Grupa Azoty Group’s supply chain is rather complex, which is attributable to the broad range of raw materials needed to produce chemicals. The ability to offer different products depends directly on the sources of feedstock supplies. Feedstocks, including minerals, are not always available in Poland; they need to be imported, often from far-away countries. The key feedstock categories used in production, as well as their countries of origin, are listed below. Natural gas PGNiG continued to be the Grupa Azoty Group’s key natural gas supplier, supplying the Group with high-methane gas under long-term contracts and nitrogen-rich gas from local sources. Supplies from other trading partners were executed under short-term agreements. In 2013, the Grupa Azoty Group purchased 84.1% of its methane-rich natural gas from PGNiG S.A. and the remaining 15.9% from other sources.
Phosphate rock Phosphate rock was supplied mainly by African producers, including primarily from North Africa. The Group is diversifying its procurement strategy, relying strongly on its own deposits in Senegal, which give it a vital competitive advantage. The situation in the phosphate rock market is to a large extent driven by the situation in the fertilizers sector.
Ammonia The Group’s procurement strategy in this area is based on optimisation of ammonia supplies. The Grupa Azoty Group is Poland’s largest ammonia manufacturer, and operates several ammonia units. Apart from
satisfying its own requirements, the Group sells surplus ammonia to external customers (chiefly Grupa Azoty Police and Grupa Azoty ZAK). Effective implementation of the procurement strategy largely depends on conditions prevailing on the fertilizers market. The Group is the largest consumer of ammonia on the domestic market and in the region.
producer of liquid sulfur in Poland and the CEE). Effective implementation of the procurement process largely depends on conditions prevailing on the fertilizer market, particularly in its most sulfur-intensive segment of compound fertilizers. The Group is the largest consumer of liquid sulfur on the domestic market and in the region.
Methanol
Propylene In 2013, European Union countries were the main ortoxylene suppliers. Its prices are largely driven by the situation on the oil market.
Ortoxylene In 2013, European Union countries were the main ortoxylene suppliers. Its prices are largely driven by the situation on the oil market.
Potassium chloride Given the substantial natural resources and competitive commercial terms, producers from Russia and Belarus are the primary suppliers of potassium chloride. If necessary, potassium chloride is additionally supplied from Western Europe.
Phenol The Group’s phenol procurement strategy is based on two primary sources – Western European and domestic suppliers. Also, since 2013 regular supplies from Scandinavian producers have been secured to supplement the existing sources. The phenol market in 2013 was largely driven by benzene contract prices, which are the principal component of phenol pricing formulae.
Sulfur The Grupa Azoty Group’s sulfur procurement strategy is based on optimisation of petrochemical sulfur supplies to the Group companies and on supplementary deliveries from the recently acquired Grupa Azoty SIARKOPOL (the leading
44 integrated report | 2013
Since Poland is not a methanol producer, the entire domestic demand is covered from imports. Offering competitive prices and convenient logistics, suppliers in Russia are the key sources of methanol for the Group’s plant in Tarnów, with CEE manufacturers used as supplementary sources.
Benzene Benzene is sourced chiefly from domestic and CEE suppliers. After the acquisition of Grupa Azoty Puławy, the Grupa Azoty Group is by far the largest benzene consumer in Poland and one of the largest in the region, which gives it considerable competitive edge. The caprolactam and polyamide markets are not the largest consumers of benzene as feedstock, which makes the price of the chemical sensitive to movements in other markets as well, including the ethylbenzene market.
Electricity The Group purchased electricity from a few suppliers which trade with large customers: PGE S.A., TAURON Polska Energia S.A. and ENEA S.A. It was possible to negotiate competitive contractual prices and terms thanks to the procurement strategy adopted by the Group, and in particular the procurement scale.
A chemical concern, like a plant, needs minerals, water and air. A plant can simply draw them from the world. We forecast, calculate and plan our needs – so we can work calmly and effectively.
45 integrated report | 2013
G4-8
G4-4
MARKET PRESENCE
Long-term contracts for the supply of fertilizers to the US market
The Grupa Azoty Group’s business is divided into the following five segments: ■■ Agro
Fertilizers, ■■ Plastics, ■■ Chemicals, ■■ Energy, Agro Fertilizers ■■ Other Activities. 56.7% Fertilizers are the key product sold in the domestic market. Exports to the EU are mainly plastics, OXO alcohols and plasticizers. In Asia, key products include OXO alcohols and caprolactam, whereas fertilizers constitute the bulk of South American exports. The relatively unstable market environment in 2013 had a stifling effect on margins. The instability was driven by poor sentiment in the agri sector and high prices of crude oil, which − together with rising pressures from competitors in China − had an adverse impact on the caprolactam market. This was compounded by low demand for titanium white, caused by a slowdown in the market for paints, varnishes and plastics.
Plastics 14.9%
Chemicals 24.3%
Other Energy Activities 2.7% 1.4%
Poland 55.4% Other EU countries 22.3% Germany 9.5%
The challenging global market environment confirmed the effectiveness of the management model we have adopted − the Group’s consistent consolidation efforts brought meaningful synergies, translating into increased efficiency.
South America 3.7% Asia 5.6% Other Europe 1.6% Africa 1.3%
Our successful initiatives also resulted in new long-term contract wins, including in South America.
46 integrated report | 2013
In early November 2013, Grupa Azoty Police signed commercial contracts with Nitron International Corporation, USA, for the supply of fertilizers. Thanks to its commercial ties with Nitron, the Grupa Azoty Group has already established a presence in the South American markets for ammonia fertilizers (notably ammonium sulfate). With more products on the supply list, the partners stand a good chance of strengthening their business alliance in the long term. The largest contract for the sale of compound fertilizers runs from January 1st 2014 until December 31st 2016, and its full-term value is estimated at around PLN 607.9m, VAT-exclusive. The Grupa Azoty−Nitron trade cooperation has continued for two years now, and the value of transactions made between the partners in the last 12 months reached PLN 1.03bn, VAT-exclusive. In early December 2013, as part of its contract negotiations for the coming years, Grupa Azoty entered into a series of trade agreements with Comexport of São Paulo, worth a total of PLN 360m. The commercial relationship with the Brazilian partner, which enjoys strong reputation in the home market, dates back 30 years. The contracts for the sale of ammonium sulfate produced by the Tarnów and Puławy plants as well as compound fertilizers produced by the Police facility, are effective for three years, starting from January 1st 2014.
MARKET PRESENCE
Grupa Azoty is:
Partnerships in raw material sourcing
# 1 in inorganic fertilizers # 1 in multicomponent fertilizers # 1 in nitrogen-sulfur fertilizers # 1 in nitrogen fertilizers
On January 16 2014, Grupa Azoty S.A. and KGHM Polska Miedź S.A. signed a Letter of Intent on joint commercial undertakings. th
among Polish fertilizer producers
The relationship may include phosphogypsum processing, acquisition of potassium chloride deposits abroad, securing access to natural gas reserves, construction of a polygeneration power plant, and phosphate rock exploration and production.
# 1 in polyamides # 1 in OXO alcohols and plasticisers # 1 in titanium white # 1 in melamine
among Polish producers of plastics, OXO alcohols, pigments, and melamine # 3 in inorganic fertilizers # 2 in multicomponent fertilizers
The signatories anticipate that the collaboration may involve commercial partnership (based on specific agreements or contracts), joint undertakings (e.g. formation of joint ventures), and equity investments. Given today’s challenging market, initiatives aimed at securing supplies of strategic raw materials and feedstocks rank high on the Group’s agenda
among Europe’s fertilizer producers # 2 in melamine # 5 in plasticisers # 5 in polyamide-6 # 5 in OXO alcohols
among Europe’s producers of plastics, OXO alcohols, and melamine Bałtycka Baza Masowa Sp. z o.o. Logistics NAVITRANS sp. z o.o.
GZNF Fosfory
Logistics
Multicomponent fertilizers
Grupa Azoty Police Multicomponent fertilizers (NPK, NP) Nitrogen fertilizers (Mocznik) Nitrogen-sulfur fertilizers (NS) Titanium white
Gdynia Gdańsk
Police
Grupa Azoty ATT Polymers Plastics (PA6)
Grupa Azoty Puławy Nitrogen fertilizers (AN, RSM, UREA) Melamine Caprolactam
Guben
Puławy
Grzybów Kędzierzyn-Koźle
Chorzów
Tarnów
Grupa Azoty ZAK S.A.
Grupa Azoty Siarkopol Sulfur-based products
Nitrogen fertilizers (AN, CAN, UREA) Nitrogen-sulfur fertilizers (CAN) OXO alcohols Plasticisers Zakłady Azotowe Chorzów S.A. NPK Stearin
Grupa Azoty S.A. Plastics (PA6, POM, modified products) Caprolactam Nitrogen fertilizers (AN, CAN) Nitrogen-sulfur fertilizers (ASN, AS)
47 integrated report | 2013
The Earth is a complex organism. It gives us various gift. We try to give it everything it needs to feed us. This is why we produce fertilizer in every shape and form.
48 integrated report | 2013
MARKET PRESENCE Agro Fertilizers
SEGMENT’S FUTURE
The segment represents the largest share of the Grupa Azoty Group’s product portfolio by value. In 2013, its revenue totalled PLN 5,565,074 thousand and accounted for 56.7% of the Group’s total revenue. New improved formulae are regularly added to the segment’s product mix.
In the period covered by the strategy, the mineral fertilizers segment, which is of key importance to the Group’s operations, will be an area of the most intense activity. The Group is consistently expanding its product range with new liquid and specialist fertilizer products and other products and services for the agricultural sector.
Our principal goal is to promote rational use of fertilizers to enable environmentally-friendly production of food that is safe to people.
The Company intends to increase its manufacturing capacity for mechanically granulated nitrate fertilizers. Also, ammonia lines will be upgraded, mainly to reduce energy-intensity of the manufacturing processes, but also to generate cost efficiencies and environmental benefits.
One initiative taken to that end was the launch of a line of fertilizers with a sulfur content. Such fertilizers are more effective in crop production than traditional formulae, which was made possible by several years of complex research and development work (for more information, see ’Customers’). The segment’s product mix comprises: ■■
Urea: PULREA®, mocznik.pl®,
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Calcium ammonium nitrate: Salmag®, Salmag z borem®, Salmag z siarką® Saletrzak 27 standard, Saletrzak 27 standard with boron,
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Ammonium nitrate: PULAN®, Zaksan™ (Kędzierzyńska Saletra Amonowa),
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Nitrogen-sulfur fertilizers: Saletrosan®26, POLIFOSKA®21, AS21 ammonium sulfate, PULSAR®,
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Compound fertilizers (NPK, NP, PK): POLIFOSKA®, POLIDAP®, POLIMAG®, AMOFOSKA® and (enhanced superphosphate fertilizer),
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liquid fertilizers: Pulaska®, ureaammonium nitrate solution (RSM®), urea-ammonium nitrate solution with sulfur (RSM®S). Additionally, ammonia and nitric acid, which are key semi-products in the manufacture of nitrogen fertilizers, are classified within this segment.
49 integrated report | 2013
Plastics are something people have created and, at the same time, something that can be used to create much more – shapes, objects, surfaces. Thousands of things which surround us. Chemistry is not just the science of joining atoms – it is also the science of the freedom to create.
50 integrated report | 2013
MARKET PRESENCE Pl astics
In 2013, revenue in the Plastics segment was PLN 1,466,548 thousand and accounted for 14.9% of the Grupa Azoty Group’s total revenue. More than 90% of the segment’s revenue was derived from foreign markets. Our own caprolactam production capacities in Tarnów and Puławy provide a secure ource of feedstock supply for the segment’s polyamide production. Plastics production is located in Puławy, Tarnów and Guben, Germany. In modified plastics, the segment’s central location is the Tarnów plant, which houses all compounding lines and the plastics laboratory, providing R&D resources and services to the entire Plastics segment. The segment’s product mix comprises: ■■
polyamides (PA 6 and modified engineering plastics): Tarnamid® and Alphalon®,
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polyoxymethylene (polyacetal) (POM and modified engineering plastics): Tarnoform®,
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plastics intermediates: caprolactam and cyclohexanone,
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modified plastics based on PA66, PBT, PP and other plastics: Tarnamid A, Tarnodur, Tarnoprop.
SEGMENT’S FUTURE In the period covered by the strategy, polyamides, polyoxymethylene and modified plastics will remain the key elements of the Group’s engineering plastics portfolio. Furthermore, the Group is planning to increase its engineering plastics production capacity and further diversify the product range in 2013−2020.
51 integrated report | 2013
MARKET PRESENCE Chemicals
Revenue in this segment reached PLN 2,385,331 thousand, up 59.6%, and represented 24.3% of the Group’s total revenue.
SEGMENT’S FUTURE In the period covered by the strategy, caprolactam, melamine, OXO alcohols, plasticizers, ammonia, concentrated nitric acid, titanium white and urea (used for non-fertilizer purposes) will be the core constituents of the Group’s chemical product portfolio. The product portfolio will be diversified, with a particular focus on speciality chemicals. Caprolactam and polyamide 6 output will be balanced and next-generation plasticizers will be added to the segment’s product mix.
The key commercial products of the Chemicals segment include the Rednox lines: PULNOx®, NOXy™ (AdBlue®), Likam®, as well as melamine, hydrogen peroxide, industrial gases, and OXO products (OXO alcohols, plasticizers): OXOPLAST®, sulfur and titanium white.
Rednox: PULNOx®, NOXy™ (AdBlue®), Likam®
Plant upgrade projects are also in the pipeline, focused on improving the energy efficiency and, as a consequence, reducing chemicals production costs and environmental impact.
The Rednox line brings together products derived from special solutions based on urea and ammonia. It is worth noting that today urea is becoming widely applied outside agriculture. When used for flue gas and exhaust gas treatment applications, it helps reduce the noxious emissions of nitrous oxides generated in fuel combustion by process plants and motor vehicles. Thanks to urea-based additives, SCR-featuring diesel engines are able to meet the current emission standards.
52 integrated report | 2013
In a world of chemistry, chemicals are a currency whose value is only clear to those in the know, as only they realize what goods it can purchase – what aims it can achieve. These aims can be as numerous as chemicals. This is why we want to produce them in ever growing varieties.
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Energy independence works on every level and at every scale. We are chemists. We know how to create all sorts of things. This includes energy and heat – for ourselves and others.
54 integrated report | 2013
MARKET PRESENCE Energy The Grupa Azoty Group owns power generation assets, but it also buys energy under supply contracts with third parties. The Grupa Azoty Group resells electricity, heat, water and natural gas to customers connected to its distribution systems. In 2013, revenue in the Energy segment was PLN 265,516 thousand and accounted for 2.7% of the Group’s total revenue. SEGMENT’S FUTURE In 2013−2020, the existing coal-powered co-generation facilities will continue as the main source of heat and electricity for the production plants in Tarnów and Police. They will be regularly upgraded to reduce their environmental footprint. In Kędzierzyn-Koźle, after 2015, heat and electricity will be generated by new units.
Other Activities In 2013, the segment reported revenue of PLN 138,554 thousand. Other Activities include manufacturing of catalysts used in selected chemical synthesis processes, as well as in the production of ammonia, hydrogen and synthesis gas. The segment’s product mix comprises: ■■
iron/chromium catalysts,
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copper/zinc catalysts, and
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iron catalysts.
The segment also includes logistics and specialised overhaul and design services. It also has come to encompass resource extraction following inclusion of new companies in the Group.
55 integrated report | 2013
There are industries in which one always needs to keep an eye on the horizon, beyond which lies the future. Chemistry is one of those. Therefore we invest in science and education. We don't know the future. Nobody knows it. Whatever it brings, we want our part in shaping it.
56 integrated report | 2013
G4-EN27 G4-EN19 G4-EN6 EN DMA27-28
The consolidation of chemical industry leaders offering specialist and complementary competencies represented by their laboratories gives the Grupa Azoty Group significant potential for growth.
G4-26
I n n ovat i o n an d d e v elo pm en t
Grupa Azoty Group has its own R&D facilities and also cooperates with external research institutes, as well as with Polish and foreign academic centres. The Group has been improving its technologies, thereby upgrading the quality of its products and services. In the course of R&D works, the Group has developed effective solutions, which are now patented and commercialised. The Group is also an initiator of and valuable contributor to a number of innovative research programmes run by leading Polish research institutions, as well as an active partner supporting the process of education, with many young scientists preparing their first scientific projects in cooperation with the Group.
Academic centres and research institutions with which the Grupa Azoty Group cooperated in 2013
Grupa Azoty S.A.
Institute of Organic Chemistry, Polish Academy of Sciences of Warsaw Industrial Chemistry Research Institute of Warsaw Institute of Electronic Materials Technology Fertilizer Research Institute (currently New Chemical Syntheses Institute) of Puławy Warsaw University of Technology Wrocław University of Technology Cracow University of Technology Lodz University of Technology University of Agiculture in Krakow Cracow University of Economics
Grupa Azoty ZAK
Grupa Azoty Puławy
Maria Curie Skłodowska University of Lublin (including a branch in Puławy)
Silesian University of Technology Opole University of Technology
Warsaw University of Technology
Opole University
Lodz University of Technology
University of Silesia
Poznan University of Technology
University of Wrocław Institute of Heavy Organic Synthesis ’Blachownia’
Wrocław University of Technology
Industrial Chemistry Research Institute of I. Mościcki
Kazimierz Pulaski University of Technology and Humanities in Radom
Institute of Industrial Organic Chemistry
Lublin University of Technology
Wrocław University of Technology AGH University of Science and Technology Institute for Chemical Processing of Coal
Wyższa Szkoła Biznesu – National-Louis University State Higher Vocational School in Tarnow AGH University of Science and Technology of Kraków
57 integrated report | 2013
Grupa Azoty Police
West Pomeranian University of Technology, Szczecin Szczecin University Maritime University of Szczecin West Pomeranian Business School of Szczecin Warsaw University of Technology Lodz University of Technology University of Warsaw Warsaw School of Economics
INNOVATION AND DEVELOPMENT
Major joint research initiatives included the creation of the Tarnów Chemical Technology Research and Development Centre and the Puławy Competence Centre.
THE TARNÓW CHEMICAL TECHNOLOGY RESEARCH AND DEVELOPMENT CENTRE
THE PUŁAWY COMPETENCE CENTRE
In late 2012, the Grupa Azoty Group companies signed a Letter of Intent with the Municipality of Tarnów and the Province of Kraków regarding the creation of a research and implementation unit, the Tarnów Chemical Technology Research and Development Centre.
The Puławy Competence Centre is a networking and information sharing platform for agribusiness, agricultural consultants, research institutions, and business at large, bringing together partners interested in modern and innovative agribusiness. Therefore, the Competence Centre is a meeting place for three different groups: the academic community, fertilizer producers, and their customers.
The new research centre will function as a platform for cooperation between a number of entities representing both industry and science. The goal of the project is to look for, organise, develop, and implement most effective cutting-edge innovations compliant with the principles of sustainable development, which will later be registered with patent authorities and used commercially. The project will also involve cooperation with the International Centre for Chemical Safety and Security (ICCSS) based on latest global chemical industry solutions, and will promote international cooperation in that area.
The overriding objectives of the Puławy Competence Centre are: ■■
to develop and promote the concept of a modern agricultural entrepreneur,
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to improve farmers’ competence in efficient management,
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to promote soil fertilization research,
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to forge new links between the worlds of business and science.
The PCC Scientific Council is composed of nine distinguished professors specialising in soil fertilization and soil science, representing nine Polish universities and research institutes. In addition to scientific and research work, the Puławy Competence Centre and the Faculty of Agriculture at the Warsaw University of Life Sciences (SGGW) have developed a programme of post-graduate studies for agricultural technicians and producers, with a special profile: ’Management of fertilizers and crop protection products in a sustainable agriculture system’.
58 integrated report | 2013
INNOVATION AND DEVELOPMENT
JOINT PROJECT OF GRUPA LOTOS AND GRUPA AZOTY
On December 3rd 2013, the Grupa Azoty Group and the LOTOS Group signed an agreement on the future formation of a special purpose vehicle to conduct a comprehensive feasibility study on the construction of a new petrochemical complex, to be located in the vicinity of both Grupa LOTOS’ and Grupa Azoty’s existing installations.
2013 saw a number of research and development projects that were part of the adopted innovation strategy.
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state-of-the-art materials,
The two companies also signed a preliminary agreement with Polskie Inwestycje Rozwojowe S.A., as a potential financial investor in the project. The investment will help reduce Poland’s chemical trade deficit. Under the agreement, Grupa LOTOS and Grupa Azoty will establish a special purpose vehicle to run the project, with project costs (related to preparation of the feasibility study and financing of the SPV’s operations) shared equally between both parties. Pursuant to a separate agreement, Polskie Inwestycje Rozwojowe S.A. will provide expert assistance in the financial and contractual structuring of the project.
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high value-added specialist chemicals,
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innovative products, including bioproducts,
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specialist mineral fertilizers,
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processes reducing the energy intensity of adopted technologies,
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technologies relying on the synergies with the Group’s byproducts.
The Grupa Azoty Group has earmarked up to 1% of its revenue for research and development, and has defined its main research areas, which include:
For more information on the research work completed in 2013 by individual Group companies, please refer to the annual Directors’ Report9. Training provided by the Group or in cooperation with leading Polish colleges and universities are a crucial part of the Group’s customer support system. They combine hands-on and theoretical training methods and are open also to prospective customers.
It should be noted that some of them are fully compatible with the Group’s strategy consistent with the sustainable development concept.
9 The document ’Directors’ Report on Grupa Azoty Group’s operations in the 12-month period ended December 31st 2013’ is available at http://tarnow. grupaazoty.com/pl/relacje/raportyr.
59 integrated report | 2013
INNOVATION AND DEVELOPMENT
grupa Azoty s.a.
The research work carried out in 2013 followed from the Group’s R&D strategy and focused both on optimisation of the Company’s key production lines and on new directions for development.
The most important R&D initiatives in 2013 included: ■■
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optimisation and enhancement of the fertilizer manufacturing process through appropriate selection of inorganic additives and anti-caking agents improving the physical and chemical properties of the fertilizers,
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engineering new varieties of modified plastics, with the use of various additives enabling specialist application of the plastics, e.g. in the automotive industry; also improving quality of polyoxymethylene,
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research into reduction of caprolactam manufacturing costs and improvement of the product quality through optimisation.
In 2013, Tarnamid® HF (high flow) developed as part of the Company’s R&D efforts received a distinction in the Materials and Aids for Plastics Processing category at the 17th PLASTPOL International Plastics and Rubber Processing Fair in Kielce.
assessment of effectiveness and benefits of using the Grupa Azoty Group’s fertilizers in agriculture,
Grupa Azoty Puł awy
GZNF Fosfory Sp. z o.o., a subsidiary of the Grupa Azoty Puławy Group, conducted research activities on manufacture of new phosphate and phosphate-potassium fertilizers with sulfur and calcium (P CaS and PK CaS). GZNF Fosfory Sp. z o.o. also commenced work on alkaline (ammonia-based) absorption of sulfur compounds from the sulfuric acid unit with a view to manufacturing ammonium sulfate for use in compound fertilizers produced by the company.
In 2013, in line with the development policy of Grupa Azoty Puławy, two key projects were completed: ■■
Construction and commissioning of a flue gas desulfurization unit at the CHP plant. The unit employs an innovative method of washing out sulfur compounds with water solution of ammonia and produces ammonium sulfate, commonly used as nitrogen fertilizer with sulfur content (for more information, see ’Air emissions’ and ’Environmental protection projects’).
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Construction and commissioning of a manufacturing unit for new liquid fertilizers based on urea, ammonium nitrate solution (RSM®), and ammonium sulfate. The project expanded the company’s fertilizer product range.
60 integrated report | 2013
INNOVATION AND DEVELOPMENT
Grupa Azoty ZAK S.A.
In the area of fertilizer production, the company is working on new compound fertilizers and on launching the production of liquid fertilizers.
In 2013, the company’s R&D activities focused on search for new products to expand the product range, as well as potential technical and technological upgrades to reduce energy consumption in the manufacture of key intermediates.
Various approaches to reducing energy consumption in the manufacturing of key intermediate products (primarily ammonia) are also being analysed. The company seeks to improve technological reliability of manufacturing processes for key intermediate products used in fertilizer production.
In the OXOPLAST Business Unit, R&D initiatives were focused on new types of non-phthalate plasticizers and potential non-alcohol products of butyraldehyde (intermediate product of OXO synthesis) processing. Regular manufacture of the OXOPLAST OT plasticizer was launched, while efforts to increase its output continued. The Grupa Azoty ZAK Group continued research activities geared towards expanding the offering of non-phthalate plasticizers, with a particular focus on bio-based plasticizers.
Grupa Azoty Police
The company also researched prospects for utilising neutralised decomposition residue from the titanium white manufacturing processes. Other R&D efforts involved the use of iron sulfate monohydrate to produce ammonium sulfate and solid-state iron compounds solution (for more information, see ’Environmental protection projects’).
In 2013, the company’s R&D activities focused primarily on developing new and upgrading the existing process lines. Other projects were also carried out to bring individual production units in line with the requirements of the IED Directive on industrial emissions (integrated pollution prevention and control). Those efforts covered the fertilizer, phosphoric and sulfuric acid, titanium white, urea and ammonia production units, as well as the power unit.
In 2013, the energy audit of the Ammonia Plant was completed. The audit was to assess the plant’s current energy efficiency and outline changes necessary to optimise the energy consumption.
The most important R&D initiative was the work on replacing the dihydrate method of producing phosphoric acid with the semihydrate-dihydrate method.
Work also continued on analysing the technical possibilities of manufacturing the organic compounds referred to above.
61 integrated report | 2013
Grupa Azoty has become a great company. Still, we want to stay close to our clients – like a rural store, where everyone knows your name, and the sales assistant knows what everyone needs. At such a scale of operations, this isn't easy. We are constantly seeking out new ways for greater mutual communication and understanding.
62 integrated report | 2013
CUSTOMER RELATIONS
Therefore, the Group’s ambition is to be not only a producer and supplier of fertilizers, but also a trustworthy partner that cares for farmers, knows their needs and expectations, and even meets them halfway by offering more effective and environmentally-friendly products. To that end, we do not only sell our products but we also offer end-to-end support in effective crop fertilization. Our mission is to provide assistance and advice to farmers and to keep a watchful eye on the entire process of fertilizing, from the conceptual stage in a laboratory up to fertilizer application on the field.
FREE, PROFESSIONAL ASSISTANCE FOR FARMERS The Grupa Azoty Group has launched an expert knowledge-sharing platform for farmers, available at www.nawozy.eu, which is devoted entirely to fertilizer products and crop fertilization processes. Registration and unlimited access to the content are free of charge. The website offers: ■■
Expert articles,
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Practical fertilization calculators and schedules,
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Fertilizer-related consultations, including an opportunity to ask questions to experts,
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Unlimited access to special weather forecasts for farmers to facilitate the fertilization process,
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Access to the database of agricultural produce prices.
Users may also obtain telephone numbers to agricultural experts in their region, and contact them when they are in need of consultation. Furthermore, the website presents updates from the Grupa Azoty Group, combined with expert knowledge provided by the Institute of Soil Science and Plant Cultivation (IUNG) of Puławy and the Fertilizer Research Institute (INS) of Puławy. The Group has also prepared a ’Fertilization Manual’ for farmers (Polish: ’Vademecum nawożenia’). The traditional paper-form magazine ’AGROlider’ is a valuable supplement to the website, as a reliable source of knowledge on the fertilizer and agricultural market.
63 integrated report | 2013
G4-PR1
The development strategy adopted by the Grupa Azoty Group is that of a leader which shapes the market, sets trends, and defines standards of conduct. The position of a market leader entails responsibility. This is especially true in the fertilizers market, where the application of fertilizer products involves certain opportunities for and threats to sustainable development. To face these challenges, fertilizer producers must stay in close contact with farmers.
G4-26
PR DMA1
SUSTAINABLE DEVELOPMENT IN AGRICULTURE
In the context of fertilization, we must always remember that the key to success is a seemingly obvious fact – it is not about applying a lot of fertilizers but rather about applying them in a rational manner. Nowadays, the problem of inappropriate application of fertilizers is one of the key challenges to global sustainable development. Irrational soil fertilization disturbs the biological balance with a negative effect on biodiversity. Precision fertilization technologies, which are custom-fitted to a given field and crop, are therefore gaining in importance. The optimum solutions are selected depending on a number of factors, including soil type, soil acidity, time of year, and crop type. The Grupa Azoty Group, as the market leader, bears responsibility for maintaining a constructive dialogue. On the one hand, this involves higher R&D spending to make sure that we offer safe products of ever higher quality; on the other hand, we need to educate farmers, make them aware of new challenges and enhance our consultancy services. The success of the Grupa Azoty Group, just as the success of individual farmers, will depend on the know-how and application of state-of-the-art technologies; therefore, the alliance between business and science and the development of a modern educational system is becoming increasingly important to the Group. To that end, we need to involve the entire agricultural community in our R&D efforts, and the Puławy Competence Centre fits perfectly with this strategy.
CUSTOMER RELATIONS SUSTAINABLE DEVELOPMENT IN AGRICULTURE
’ENVIRONMENTAL DEVELOPMENT TRENDS IN THE CHEMICAL SECTOR’
SCIENCE – BUSINESS – AGRICULTURE
In May 2013, the 17th ’Environmental Development Trends in the Chemical Sector’ conference was organised by the Grupa Azoty Group and the Tarnów Branch of the Polish Association of Chemical Engineers. The event brings together the entire Polish chemical sector and is addressed to representatives of chemical companies, the scientific community, as well as central and local government authorities.
On November 21st 2013, the third edition of the ’Science – Business – Agriculture’ conference was held at the Puławy Science and Technology Park. The conference is organised by the Puławy Competence Centre under the honorary patronage of the Polish Ministry of Agriculture and Rural Development, and Fertilizers Europe (European Fertilizer Manufacturers Association, which brings together the European chemical industry leaders).
The conference was attended by creative people with a strong focus on the development of new materials and technologies, also from recyclable waste, who also promote social and environmental responsibility in a time of raging consumerism and who never forget the possible consequences in their pursuit for innovative solutions.
Invitations to participate in the conference were sent to representatives of the agricultural science community, government agencies, agricultural producers and their trading partners, as well as leaders of the agricultural chemicals research from all academic centres in Poland. The conference addressed different aspects of the fertilization process, including the system of fertilization recommendations vs. the agricultural practice, application of precision agriculture (or precision farming) methods, as well as trends in fertilization technologies.
Therefore, the focus was not only on new environmentally-friendly fertilization methods, but also on environmental trends in chemical materials and chemical production, green nanotechnology, and the application of biological processes to industrial waste water treatment.
64 integrated report | 2013
CUSTOMER RELATIONS
Our professional sale and technical support services are also a very important element in developing and maintaining successful customer relations. The Grupa Azoty Group is engaged in market research projects to monitor customer satisfaction as accurately as possible. In the past, most of those projects were implemented separately by individual companies, using a wide range of different tools. However, with the ongoing integration of our activities we are able to develop the most effective approach based on existing good practices of individual companies. The most recent customer satisfaction survey was held in September 2013. Customers evaluated aspects related to products, packaging, customer service, organisation of deliveries, terms of business, complaint procedures, as well as promotional and advertising activities. In the case
of fertilizers, customers assigned the highest score to the quality of customer service and information materials, and, most importantly, to the technical quality of products. In plastics, the technical quality of products, timely delivery, and organisation of customer service scored best. The customer satisfaction survey covered products supplied by Grupa Azoty S.A. and Grupa Azoty ZAK.
Free professional support to plastics processing companies At www.e-plastics.eu, the Grupa Azoty Group has launched a website devoted entirely to plastics and their processing, as well as the latest achievements, trends, and developments in the plastics business and new suggested applications of plastics. The website allows access to detailed parameters of plastics, includes a search engine which can be used to search for a product by its name, physical and chemical parameters, or processing characteristics, as well as an advanced functionality for comparing products. Upon registration, users gain access to specialist materials, may consult their technical consultants and account managers, place orders, monitor invoices and payments, access product certificates and complete product documentation, and track orders to check the current location of dispatched products.
Grupa Azoty Puławy, which has only recently joined the Grupa Azoty Group, runs its own customer satisfaction monitoring projects on an annual basis. Customers give their feedback on a number of aspects, including fertilizer quality, packaging quality and available packaging options, availability of products, timely delivery, as well as work of the customer service personnel (in terms of the competent and professional approach, politeness, speed of service, and post-sale support). At Grupa Azoty Police, customer dialogue is approached on an end-to-end basis and research tools are adjusted to specific customer categories. For example, customer satisfaction surveys among end consumers are based on the PAPI technique, telephone interviews, and mailing. Polish trade agents are usually interviewed using the PAPI technique, while foreign trade agents are typically interviewed by telephone or based on questionnaires.
65 integrated report | 2013
G4-PR7
The Group strives to build longlasting relations and strong ties with its customers. By maintaining close cooperation with customers and keeping track of the latest market trends and activities of its competitors, operating professional R&D facilities and working with universities and research institutes, the Group is able to develop products that meet highest quality standards.
PR DMA7
PR DMA3-5
G4-12
G4-PR5
G4-26
Fostering good rel ations
In 2013, the Grupa Azoty Group did not report any cases of non-compliance with applicable regulations or voluntary codes of conduct relating to marketing communications, including advertising, promotion, and sponsoring, which would result in the imposition of financial or other penalties. This is due to our consistent marketing communications policy, including the corporate image and brand building strategy, which forms part of the Grupa Azoty Group Strategy for 2013−2020.
Chemistry serves to make the world better and safer. So it, too, must be safe for the world. We think about safety within each product's entire life cycle – from sourcing raw materials, to the production stage, through to use.
66 integrated report | 2013
Safe t y
The Group’s business requires compliance with the most exacting safety standards on multiple levels: ■■
workplace safety,
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process safety,
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safety of products throughout their life cycle, from research and development to final use.
Relevant solutions applied across the Group ensure appropriate conditions for the manufacture, storage, transport and distribution of substances to meet the natural environment protection requirements. The Grupa Azoty Group companies operate in the chemical industry and are classified as facilities with a high risk of a major industrial accident. Being aware of the possible consequences of their operations, the Group companies strive to mitigate their negative environmental impact.
SAFETY PROGRAMME Ensuring the responsibility and safety of production processes is a fundamental principle of the Group. Advanced technological solutions enable the Group companies to actively engage in efforts aimed to mitigate adverse impact on the environment, which are often a source of economic benefits as well. The companies have devised and implemented relevant incident prevention programmes, and safety matters are subject to regular reporting. The Group is engaged in safety awareness initiatives and is an organiser of national industry conferences dedicated to safety. In 2013, the Company was involved in organising several such events, including the conferences on ’Environmental Development Trends in the Chemical Sector’, ’Repair and Plant Engineering in the Chemical Sector’, and ’Industrial Plant Safety’.
67 integrated report | 2013
OHS is a vital aspect of corporate social responsibility of any industrial facility, particularly in the chemical sector, whose operations involve specific risks.
G4-LA8
LA DMA5-8
HEALTH & SAFETY
Each of the four companies covered by this Report has set up a Health and Safety Committee, representing all employees. The compositions and remits of individual committees are similar. They comprise representatives of the employer (delegates from HR and OHS units and occupational physicians providing preventive care to employees) and of the employees (trade union delegates and social labour inspectors). Their responsibilities include conducting workplace safety inspections and periodic OHS assessments, providing opinions on workplace accident and occupational disease prevention measures implemented by the management boards, formulating conclusions to improve workplace safety, and working with the management boards in the pursuit of their OHS objectives.
G4-LA7
G4-LA5
OHS management processes in place at the Grupa Azoty Group are defined in the Integrated Management System and they conform with the PN-N-18001:2004 and BS OHSAS 18001:2007 standards (see Integrated Management Systems).
At three Group companies, Grupa Azoty S.A., Grupa Azoty Puławy and Grupa Azoty Police, the OHS arrangements made between the employer and employees are reflected in the relevant collective bargaining agreements, and in the case of Grupa Azoty ZAK S.A. they are incorporated in the integrated management system. OHS matters are also addressed in the dialogue between the management boards and trade unions.
Given the nature of the Group’s processes, our employees are exposed to risks related to factors that are dangerous or harmful to human health. We make every effort to eliminate or, if eradication is impossible, to reduce the risks, providing comprehensive technical and organisational tools for collective and personal protection of life and health. According to statistics dated as at the end of last year, 16 workers were exposed to excessive noise at our plants in Tarnów, and 190 cases of insufficient workplace lighting were reported. Occupational risk assessments were carried out for 14 workstations used by 43 staff. As at the end of the year, in Kędzierzyn-Koźle four employees were exposed to noise that exceeded permitted levels. In 2013, occupational risk assessment forms for 123 workstations were reviewed and updated. Technical means of eliminating or reducing occupational risks were implemented in the case of 17 workstations, while organisational and personal protection measures were put in place for all the 123 workstations.
68 integrated report | 2013
At the Puławy facilities, exposure to dust, noise and high temperatures was reported for 67, 868, and 118 employees, respectively. Occupational risk assessments were performed at 60 workstations (320 workers). In Police, 621 employees were exposed to risks and hazards in their work environment, including to dust causing pulmonary fibrosis (110 employees), other dusts (119 employees), a nd noise (392 employees). The exposure to risks was eliminated or reduced to acceptable levels for 38 employees. A total of 535 workstations (1,583 employees) were subject to occupational risk assessment, with risk exposures eliminated or reduced at 185 of them (603 staff). Technical measures to eliminate or reduce safety risks were applied with respect to 101 workstations (389 employees), and 71 workstations (239 staff) were equipped with additional personal protection equipment.
HEALTH & SAFETY
New safety enhancement initiative by Polish chemical companies On October 17th 2013, companies of the Grupa Azoty Group met with the representatives of other Polish chemical companies in the city of Tarnów, where they signed a declaration of intent to improve work safety, fire safety and environmental protection standards throughout the chemical industry.
Card of Safe Work Leaders The Central Institute for Labour Protection has a system of awards to recognise businesses that operate effective OHS management systems, report consistently low accident and occupational disease rates, and have successful OHS prevention programmes in place. They are honoured with a Gold, Silver or Green Card of Safe Work Leaders. Grupa Azoty Group companies are among the award recipients.
The declaration is an open access initiative, providing a platform for the ongoing exchange of experience with companies outside the Group, in the realms of work safety, process safety, and environmental protection. This complete and systematic approach to safety inspections is expected to enhance the existing safety management systems.
The purpose of the agreement ‘... is to develop a model for cooperation in developing process safety, with a view to reducing the risks that can potentially lead to major industrial accidents.’ The signatories all pledged to share their experiences in process and work safety and to implement the Zero Accidents and Failures prevention programme.
Gold Card recipients: Grupa Azoty ZAK (until October 2015),
■■ ■■
Grupa Azoty Police (until November 2014).
Silver Card recipients: ■■ Grupa Azoty S.A. (until November 2014). G4-LA6
Part of their joint work will be to evaluate the feasibility of a new model for comprehensive operational safety inspections of production assets. The new inspection model, currently in the testing phase, is based on a series of checklists (comprising questions concerning all inspected areas) prepared jointly by the participating chemical companies and the Chief Labour Inspector, Chief Environmental Protection Inspector and the Main Headquarters of the National Fire Service. To check the feasibility of the Provincial Inspectorate of Environmental Protection, National Labour Inspectorate, and State Fire Service being able to conduct such comprehensive inspections simultaneously, the state agencies and chemical companies together prepared an ammonia storage facilities checklist, which has already been used to conduct inspections at Anwil Włocławek, Grupa Azoty S.A., and Grupa Azoty Zakłady Azotowe Puławy. Their experience of the pilot inspections are being discussed in working group meetings, and will be used to design the final inspection model.
69 integrated report | 2013
With a strict approach to workplace health and safety risks, the reported injury incidence rate was relatively low − a total of approximately 100 accidents took place at the four companies covered by this Report, with all of them classified as minor, save for one accident at the Tarnów facilities. Only one case of occupational disease (at Grupa Azoty Police) was identified
HEALTH & SAFETY Workpl ace safety at Grupa Azoty Group companies
2012
Grupa Azoty S.A.
2013
women
men
women
men
Total workplace accidents
2
15
8
12
Fatalities
0
0
0
0
Severe injuries
0
0
0
1
Minor injuries
2
15
8
11
Total days lost due to workplace accidents
119
668
538
957
Incidence rate (total number of accidents / headcount × 1,000)
1.0
7.3
3.8
5.7
59.5
44.5
67.3
79.8
0
0
0
0
Severity rate (days lost/number of accidents) Reported cases of occupational disease
2012
Grupa Azoty ZAK
2013
women
men
women
men
Total workplace accidents
1
9
5
6
Fatalities
0
0
0
0
Severe injuries
0
0
0
0
Minor injuries
1
9
5
6
Total days lost due to workplace accidents
5
594
330
219
Incidence rate (total number of accidents / headcount × 1,000)
2.2
8.0
10.7
5.4
Severity rate (days lost/number of accidents)
5.0
59.4
66.0
36.5
0
0
0
0
Reported cases of occupational disease
70 integrated report | 2013
HEALTH & SAFETY Workpl ace safety at Grupa Azoty Group companies
Grupa Azoty Puławy*
2012
2013
women
men
women
men
Total workplace accidents
8
47
10
50
Fatalities
0
0
0
0
Severe injuries
0
0
0
0
Minor injuries
8
47
10
50
Total days lost due to workplace accidents
657
1405
408
1287
Incidence rate (total number of accidents / headcount × 1,000)
10.1
18.9
12.7
20.0
Severity rate (days lost/number of accidents)
82.1
29.9
40.8
25.7
0
2
0
0
Reported cases of occupational disease
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
Grupa Azoty Police
2012
2013
women
men
women
men
Total workplace accidents
2
16
2
10
Fatalities
0
0
0
0
Severe injuries
0
0
0
0
Minor injuries
2
16
2
10
Total days lost due to workplace accidents
101
916
76
603
Incidence rate (total number of accidents / headcount × 1,000)
0.9
6.9
0.9
4.3
50.5
57.3
38.0
60.3
0
0
0
1
Severity rate (days lost/number of accidents) Reported cases of occupational disease
71 integrated report | 2013
HEALTH & SAFETY Workpl ace safety at Grupa Azoty Group companies
Total for the Group
2012
2013
women
men
women
men
Total workplace accidents
13
87
25
78
Fatalities
0
0
0
0
Severe injuries
0
0
0
1
Minor injuries
13
87
25.0
77
882
3 583
1 313
3 066
5.4
12.7
10.2
11.3
67.8
41.2
52.5
39.3
0
2
0
1
Total days lost due to workplace accidents Incidence rate (total number of accidents / headcount Ă— 1,000) Severity rate (days lost/number of accidents) Reported cases of occupational disease
72 integrated report | 2013
PR DMA1-2
REACH
PRECAUTIONARY APPROACH
The Grupa Azoty Group meets the requirements set out in the Regulation (EC) No. 1907/2006 (REACH) concerning the registration, evaluation, authorisation and restriction of chemicals. The Group adheres to the regulations that require thorough testing for hazardous properties of all marketed chemical substances, as well as introduction of usage rules that minimise related risks and, in justified cases, usage restrictions and bans.
The Grupa Azoty Group strives to comply with the precautionary principle for the chemical substances used in its production processes, including by not using substances whose properties have not been sufficiently investigated. If possible, the Group also relies on substitution by replacing extremely hazardous substances with those that present a lower risk. In the case of some substances (for instance cyclohexanone) the classification criteria applied by the Group are more rigid than the formal criteria set out in the CLP Regulation.
In discharge of its obligations imposed under said regulations, the Group submitted relevant documents to the European Chemicals Agency, containing test results and chemical safety assessments for each registered chemical. The safety assessments of the chemicals entailed a wide array of tests of their physical and chemical, toxicological and ecotoxicological properties. All the Group’s substances have been duly registered, with the relevant documentation kept up to date. The safety assessments served as the basis for the preparation of chemical safety reports, each of them covering the entire life cycle of a given substance.
DOCUMENTATION Product Data Sheets and Exposure Scenarios are in place for hazardous products (such as fertilizers, chemicals and monomers), which provide downstream users with information on recommended risk management measures relevant to the identified uses of individual substances. If new data or test results are available for a given substance, the companies make relevant adjustments to its registration documents or classification filings.
G4-14
GR-PR1
Prod u c t s afe t y
PRODUCT CERTIFICATES The Grupa Azoty Group holds a number of non-obligatory certificates for its products, which attest to their high quality and safety. For instance, the Puławy facilities are proud to have product management standards in place which comply with the certification requirements of Fertilizers Europe’s Product Stewardship Standard certification programme. The certificate covers product development, materials and additives sourcing, production, packaging, transport, storage, marketing and sales, and product application, including support provided to farmers. Also, select products have been awarded the Q quality mark and hold ’EC Fertilizer’ certificates.
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Grupa Azoty representation on the board of fertilizers europe In mid-2013 two Vice-Presidents of Grupa Azoty were appointed to serve on the Board of Fertilizers Europe (FE). Fertilizers Europe (the European Fertilizer Manufacturers Association) represents Europe’s largest fertilizer manufacturers. Its main objectives are to educate, analyse and solve problems related to the manufacture and use of fertilizers likely to have an impact on both the environment and the health of people living in the EU. Also, FE looks after the interests of the entire EU fertilizer market and is responsible for contacts with international companies and institutions, being the only organisation of such standing to represent the fertilizer industry before the European Commission. Apart from Polish companies, its members include enterprises from Spain, France, Norway, Lithuania, Germany, Austria, the Czech Republic, Hungary, the Netherlands, Belgium, Romania and Greece.
Chemical substances, especially those classified as hazardous, may pose a threat not only in production or storage but also during transport. Thousands of trucks carrying various chemicals travel the roads every day. In the event of a traffic accident and related tanker spill, some of these chemicals may present a real danger to people and the environment. The risk can be reduced by compliance with very strict road transportation rules, or by hauling most cargo by rail, which is a safer mode of transport than trucks (see ’Transport’).
Carriage of dangerous goods is governed by stringent regulations conforming with the ADR requirements, with day-to-day compliance ensured by dedicated specialists.
Spot System of Assistance in Hazardous Material Transport
AEO
The system aids in recovery from incidents involving transport of hazardous materials. It helps to improve the safety of transport in Poland, and − in the case of any incidents − facilitates effective removal of their consequences by joint effort and measures of the national rescue, fire services and SPOT members. Participation in the initiative is a voluntary declaration of intent by its members to provide assistance in case of emergency. The system was established in 2000 by the Polish Chamber of Chemical Industry and a group of chemical producers, including Grupa Azoty ZAK S.A. The other members of the Grupa Azoty Group later joined the scheme as well. SPOT is a showcase of industry collaboration and dialogue.
Transport safety is further enhanced by the Group choosing systems of closed tank cars of various RID classes over road tankers for shipping chemicals. For safety reasons, special-purpose tank cars designed to fit the equipment in place at the loading and receiving terminals are increasingly used.
The quality and the resulting safety of transport services are confirmed by the Authorised Economic Operator Certificates held by all four companies covered by this Report10. Holders of the certificate benefit from simplified security and safety customs clearance and simplified customs procedures. It attests to compliance with stringent requirements in production, logistics, and transport of goods (including securing for shipment and storage).
TRAFFIC ACCIDENTS No major traffic accidents that could pose a significant risk of contamination were reported in 2013. In total, two road incidents and one railway incident occurred, all of which concerned Grupa Azoty Puławy.
10 The certificates belong to the category ’AEOF - Customs simplifications/Security and Safety’ and are published on the European Commission website athttp://ec.europa.eu/taxation_customs/ dds2/eos/aeo_consultation.jsp?Lang=en
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HIGH STANDARDS G4-PR2
EN DMA30
G4-EN30
TRANSPORT SAFETY
In 2013, there were no incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products (understood as incidents leading to non-compliance with the law or voluntary codes) resulting in warnings, or significant fines or penalties.
PRODUCT LABELLING All packaging contains information on the contents (name of the substance or the trade name of the product), manufacturer details (address) and weight. For instance, fertilizer packaging contains information required under Regulation (EC) No. 2003/2003, including the class and type of fertilizer, the ’EC fertilizer’ marking (if applicable), the nutrient content and its form, directions for use, and safety precautions (the latter is optional under applicable regulations). If a fertilizer is marketed in bulk, an accompanying document is made, containing all the required label elements. For chemical substances and mixtures classified as hazardous and falling within the scope of the CLP Regulation (EC) the disclosure requirements are broader, with the essential information that must appear on a label including: product identifier (name of the substance and its identity number), hazard pictograms and signal words, hazard statements, precautionary statements, and information on storage and transport.
SAFETY DATA SHEET Additional information to be found in a safety data sheet includes first aid measures, fire-fighting measures, accidental release measures, measures relating to substances and mixtures, storage information,
personal protection measures (if applicable), information on toxicity and ecotoxicity, and disposal considerations. The packaging of feed additives should also bear a label compliant with the requirements applicable to feeds and feed additives (Regulation (EC) No. 1831/2003), containing information on permitted doses and storage life. The procedures and responsibilities regarding the proper labelling of products are defined in the internal regulations. KOSHER PRODUCTS OF GRUPA AZOTY ZAK S.A. In July 2013, the company obtained an extended kosher certificate for all its existing products and retained a licence for the certified AdBlue® product. On May 14th 2013, the Kędzierzyn plant was visited by Michael Schudrich, Chief Rabbi of Poland, who extended the kosher certificate for all products made at Grupa Azoty ZAK S.A. To receive the certificate, the company first had to satisfy the requirements set by the Chief Rabbinate of Poland as the competent certification body. One of them was to prepare a set of relevant documents on the technologies, products, materials and catalysts used, which were then submitted for assessment. With the certificate, Grupa Azoty ZAK S.A. is able to place its branded products on any market, including those which require kosher attestation. To receive the certificate, the company had to meet certain market requirements.
75 integrated report | 2013
HIGH STANDARDS G4-PR9
The safety and prime quality of a product must be ensured throughout its entire life cycle − not only at the production stage but also when the product is actually used. For end users, such things as appropriate and clear labelling are of key importance.
G4-PR4
PR DMA3-5
PR DMA9
G4-PR3
CUSTOMER SAFETY
In 2013, there were no incidents of non-compliance with regulations or voluntary codes concerning product and service information and labelling, particularly those which would result in significant fines, penalties or warnings. No significant fines were imposed for non-compliance with laws and regulations concerning the provision and use of products and services.
G4 EN-DMA
ENVIRONMENTAL IMPACT
Grupa Azoty Group companies have a clear formal and legal status as regards environmental protection and the requirements imposed by the Environmental Protection Law, which sets out the environmental protection rules as well as conditions for the use of natural resources in line with the principles of sustainable development relating to environmental protection. The companies carry out their industrial operations pursuant to a number of decisions issued by provincial governors and marshals, such as integrated permits for the operation of industrial facilities, permits to release gases and dusts into the air, water permits to discharge sewage to water, permits for waste generation, permits for recovery of waste, permits for collective water intake and collective wastewater discharge, and permits to emit greenhouse gases. The companies operate according to internal processes and procedures constituting their respective environmental management systems, which aim to limit negative environmental impacts in areas such as: ■■
Air emissions,
■■
Water emissions,
■■
Waste management,
■■
Soil contamination,
■■
Social impact,
■■
Use of raw materials and natural resources,
■■
Other local environmental concerns.
Drawing on the best practices of its individual companies, the Grupa Azoty Group has a unique opportunity to develop improved solutions, which it can then implement and promote across the Group. This is yet another synergy resulting from the consolidation.
RESPONSIBLE CARE Aiming to protect the environment, Grupa Azoty Group companies participate in the Responsible Care Programme (Odpowiedzialność i Troska®). By being involved in the Programme, the companies demonstrate their deep and voluntary commitment to reducing their environmental impact, improving working conditions and plant safety, and to ensuring regular contact with their business and social environment11.
11 For more information on the initiatives undertaken by individual companies under the Responsible Care Programme, see local supplements to this Report.
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Grupa Azoty Police Among Winners of The 8th Edition of the ’Green Laurel’ Contest The ’Green Laurel’ contest is an annual event organised by Polska Izba Gospodarcza Ekorozwój (Polish Economic Chamber for Eco-Development), operating under the patronage of the President of the National Fund for Environmental Protection and Water Management, and the Chief Environmental Protection Inspector and Chairperson of the Convent of Presidents of Provincial Funds for Environmental Protection and Water Management. Grupa Azoty Police received the award for its iron sulfate neutralisation plant.
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It's good to have trusted partners. Each of our companies spent years building a circle of trustworthy suppliers. We continue to work with them. However, as Grupa Azoty, we have achieved a scale of operations which makes it possible to obtain raw materials on our own – in Poland and around the world. 78 integrated report | 2013
FEEDSTOCKS
G4-12
The Grupa Azoty Group’s supply chain aims chiefly to secure the availability of appropriate feedstocks.
EN DMA1
KEY RAW MATERIALS USED
The Group’s ability to offer different products depends directly on stable supplies of quality feedstocks.
Securing access to deposits of polyhalite, a sulfate of potassium, magnesium and calcium, would be particularly valuable in this respect, as the mineral could be used as a source of potassium for the production of compound fertilizers.
Feedstocks, including minerals, are not always available in Poland; they need to be imported, often from far-away countries rich in mineral deposits. The consolidation efforts undertaken over the last year were geared towards vertical integration to secure access to certain feedstock sources (phosphate rock deposits in Senegal and sulfur deposits in Grzybów).
The Grupa Azoty Group sources its key feedstocks from various countries. Despite its ongoing diversification efforts, the Group still relies chiefly on Russia for its natural gas supplies, while sourcing phosphate rock primarily from North African countries, propylene and ortoxylene from Western Europe, potassium chloride from Russia, Belarus and Western Europe, phenol from Poland, Western Europe and Scandinavian countries, methanol from Russia and Central and Eastern Europe, and benzene from Poland and other CEE countries13.
In August 2013, Grupa Azoty12 signed a Letter of Intent to collaborate with KGHM Polska Miedź S.A. on joint exploration for mineral deposits in Poland and abroad, and on management of recyclable materials.
12 Gdańskie Zakłady Nawozów Fosforowych Fosfory, a subsidiary not included in this Report, was the formal signatory of the Letter of Intent.
13 For more information on the supply of strategic feedstocks, see ’Directors’ Report on the Operations of the Grupa Azoty Group for the 12 months ended December 31st 2013’ (pp. 34–35), which can be found at http://tarnow.grupaazoty. com/pl/relacje/raportyr.
79 integrated report | 2013
integrated report | 2013
80
al
0,3%
4,8%
4,5%
1,3%
0,9%
0,2%
Liquid Methanol Benzene ammonia
Co
Pr o a l py l co h e ho p l t yl
Te re p ac hth id ali c
3,0%
5,4%
2,8%
2,6%
Sulfur
O rto xy le ne
Ni tro ge n
2,7%
2,6%
45,4%
45,4%
Fine coal
2-
e
n
en
ge
yl
xy
op
40,3%
37,7%
Natural gas
O
Pr
Na t ga ura s l
G4-EN1
4,2%
4,8%
3,1%
1,5%
1,7%
3,3%
11,0%
11,1%
9,6%
9,5%
17,6%
17,6%
21,8% 21,6%
31,0%
31,0%
G4-EN1
FEEDSTOCKS
Raw materials used by Grupa Azoty S.A.
2012 r.
2013 r.
Phenol Caprolactam
Raw materials used by Grupa azoty zak S.A.
2012 r.
2013 r.
FEEDSTOCKS
26,7%
5,8%
5,7%
3,8%
3,4%
3,4%
2,9%
1,9%
1,3%
3,8%
5,4%
18,4%
21,6%
22,8%
30,2%
43,0%
G4-EN1
Raw materials used by Grupa Azoty police
2012 r. 2013 r.
Natural Potassium Phosphate Molten gas chloride rock sulfur
Sulfuric acid
Titanium slag
Ilmenite
Fine coal
Natural gas
Coal
Benzene
0,7%
0,6%
15,0%
14,5%
12,5%
11,3%
73,0%
72,3%
G4-EN1
Raw materials used by Grupa Azoty Puławy*
2012 r. 2013 r.
Sulfur
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
81 integrated report | 2013
ENERGY
remained broadly flat on previousyear levels (down 1.9%), while its energy intensity, defined as the ratio of energy costs to production value, was seen to improve in three plants (Tarnów, Kędzierzyn-Koźle and Puławy). However, the ratio rose in the Police plant (up 5.3%) on the back of a reduction in production output which nullified the economies-ofscale effect. This offset the improved results seen in other companies, bringing the total intensity ratio close to previous-year levels, with energy costs accounting for 7.7% and 7.8% of production value in 2012 and 2013, respectively, which represented a change of 1.3%.
EN DMA3-6
G4-EN3
G4-EN5
For their continued operation, the Group’s production plants rely on stable and reliable electricity and heat supplies. Individual production facilities have their own CHP plants. The Grupa Azoty Group takes measures to improve their energy efficiency and limit the environmental impact of power generation, particularly in view of the fact that coal is set to remain the prevalent fuel. For several years, the Group has pursued investments to upgrade its available production capacities. The energy efficiency improvements achieved by the Group are attributable to different factors, including regular upgrade projects and efforts to reduce the share of energy from the most expensive sources. Total energy consumption within the Group
G4-EN3
ENERGY CONSUMPTION WITHIN THE ORGANISATION [GJ] 2012
2013
change
Grupa Azoty S.A.
9 341 094 GJ
9 196 615 GJ
-1,5%
Grupa Azoty ZAK**
7 033 099 GJ
7 559 975 GJ
7,5%
Grupa Azoty Puławy*
19 391 723 GJ
19 912 500 GJ
2,7%
13 141 894 GJ
11 306 804 GJ
-14,0%
48 907 810 GJ
47 975 894 GJ
-1,9%
Grupa Azoty Police Total for Grupa Azoty Group
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012). ** Figures for Grupa Azoty ZAK do not take into account cooling generation.
G4-EN5
ENERGY INTENSITY, I.E. ENERGY COSTS TO PRODUCTION VALUE (%) 2012
2013
change
Grupa Azoty S.A.
8,2%
8,0%
-2,3%
Grupa Azoty ZAK*
12,1%
11,5%
-4,9%
Grupa Azoty Puławy**
9,4%
9,0%
-4,2%
Grupa Azoty Police
4,4%
4,6%
5,3%
Total for Grupa Azoty Group
7,7%
7,8%
1,3%
* Figures for Grupa Azoty ZAK do not take into account cooling generation. ** Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
82 integrated report | 2013
A number of initiatives contributed to improved energy efficiency in 2013.
Grupa Azoty S.A.
ENERGY KEY INITIATIVES TO IMPROVE ENER GY EFFICIENCY IN 2013
■■ Installation of power inverters at the Central Wastewater Treatment Plant, Biological Wastewater Treatment Plant and Power Business Unit, ■■ installation of an ammonia compressor at the 6th cooling unit, ■■ upgrade of the K-32 unit to enable recovery of unreacted phenol and Beckmann rearrangement with reaction heat, ■■ replacement of steam ejectors with a vacuum pump, ■■ upgrade of the cooling ammonia network, ■■ erection of a new hydrogen production plant;
■■ upgrade of the river pumping station (Unit No. 140) , ■■ upgrade of the industrial water pumping station (Unit. No. 202) providing water
Grupa Azoty ZAK
for general use at the plant and for fire-fighting purposes, ■■ replacement of heating water circulation pump No. 4 at the heating unit (Unit No. 211/1), (apart from the replacement of key equipment, upgrade work also involved energy-efficient operation of frequency converters);
Grupa Azoty Puławy
■■ replacement of two pumping sets (pump + motor) with new, energy-efficient units, ■■ replacement of 31.5 MVA transformers with 40 MVA units;
Grupa Azoty Police
■■ replacement of motors and lighting systems with more energy-efficient units ■■ change in regulation of the circulating pumps at CHP plant No. 2 ■■ switch-over to two OP 230 boilers at CHP plant No. 2 to limit the use
the less energy-efficient OR 32 boilers at CHP plant No. 1 ■■ implementation of an energy management system based on ISO 50001.
The investment projects implemented at the Tarnów plant alone translated into considerable energy savings last year, estimated at PLN 9.5m. Thanks to the upgrade of the pumping station, Grupa Azoty ZAK’s savings
are estimated to reach 228.73 GJ annually, while investments at Grupa Azoty Puławy have reduced its energy consumption by 10,840 GJ a year. Grupa Azoty Police saved some PLN 313 thousand following the
83 integrated report | 2013
replacement of motors and lighting systems. Additionally, limiting the use of less energy-efficient boilers is documented to have reduced the plant’s costs by PLN 1.4m in the three winter months only.
ENERGY SUPPLEMENTARY NON -FINANCIAL INFORMATION
G4-EN3
ENERGY FROM PRIMARY SOURCES (BY ENERGY CARRIERS)
j.m.
Grupa Azoty S.A.
Total consumption 2012
2013
Thermal coal
GJ
7 185 000
8 500 000
Natural gas
GJ
5 500
4 300
Fuel-grade MEK
GJ
209 400
171 700
Process gas
GJ
100 200
53 000
Mazut
GJ
32 900
33 800
j.m.
Grupa Azoty ZAK
Total consumption 2012
2013
Fine coal
GJ
4 332 426
4 736 730
Fuel oil
GJ
5 005
4 517
Grupa Azoty Puławy*
j.m.
Total consumption 2012
2013
Hard coal
GJ
14 384 037
15 158 825
Petroleum-based fuels
GJ
462 306
463 689
Natural gas
GJ
14 044
17 798
Grupa Azoty Police
j.m.
Hard coal
GJ
Total consumption 2012
2013
7 240 214
7 053 725
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
84 integrated report | 2013
ENERGY SUPPLEMENTARY NON -FINANCIAL INFORMATION
G4-EN3
TOTAL ENERGY CONSUMPTION IN [GJ]
Grupa Azoty S.A.
Grupa Azoty ZAK**
Grupa Azoty Puławy*
Grupa Azoty Police
2012
2013
2012
2013
2012
2013
2012
2013
Electricity, heat, cooling and steam purchased for consumption
635 400
211 400
1 321 385
1 247 863
3 686 275
3 829 040
1 565 404
1 507 092
Electricity, heat, cooling and steam generated by the organisation
9 071 694
9 328 215
6 255 063
6 869 426
17 263 119
17 642 379
12 077 573
10 310 256
366 000
343 000
543 349
557 314
1 557 671
1 558 919
501 084
510 543
9 341 094
9 196 615
7 033 099
7 559 975
19 391 723
19 912 500
13 141 894
11 306 804
Electricity, heat, cooling and steam sold by the organisation
Total energy consumption within the organisation
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012). ** Figures for Grupa Azoty ZAK do not take into account cooling generation.
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WATER MANAG EMENT
EN DMA8-10
G4-EN8
WATER INTAKES AT THE GRUPA AZOTY GROUP
At the Grupa Azoty Group, water is used chiefly for industrial purposes, as a cooling agent, for drinking and as sanitary water, to produce process waters, and for fire-fighting applications. Water consumption management is governed by applicable procedures to ensure rational water management, prevent water loss, minimise amount of effluent, and prevent industrial failures.
Grupa Azoty S.A. ■■ surface intake on the right bank of the Dunajec river, ■■ underground intake from Quaternary water-bearing,
formations (first aquifer);
Grupa Azoty ZAK ■■ surface intake from the Oder river, ■■ surface intake from the Łącza stream, ■■ tertiary and Quaternary groundwater intakes (deep wells), ■■ purchase of water drained from the Kotlarnia Sand Mine;
Grupa Azoty Puławy ■■ surface intake from the Wisła river (through four pipelines: R1–R4), ■■ surface intake from the Kurówka river, ■■ underground intake from Quaternary water-bearing formations (deep wells);
G4-EN8
Grupa Azoty Police Total water abstraction increased at two plants in the past year – Tarnów (up 6.0%) and Puławy (up 9.9%) – while decreasing at Kędzierzyn-Koźle (down 3.9%) and Police (down 8.8%). As a result, the total water abstraction remained virtually unchanged, having decreased only slightly (down 1.5%).
■■ surface intake from the Oder river, ■■ surface intake from the Gunica river.
G4-EN8
TOTAL WATER ABSTRACTION [M 3] 2012
2013
change
Grupa Azoty S.A.
12 516 000
13 267 000
6.0%
Grupa Azoty ZAK
7 336 000
7 052 240
-3.9%
97 599 890
107 244 776
9.9%
Grupa Azoty Police
162 595 854
148 246 534
-8.8%
Grupa Azoty (total)
280 047 744
275 810 550
-1.5%
Grupa Azoty Puławy*
G4-EN10
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
The Grupa Azoty Group strives to optimise its water consumption through efficient water management, including water reuse. The method and scope of water reuse depends on production process characteristics at individual plants.
86 integrated report | 2013
WATER MANAG EMENT PERCENTAGE AND VOLUME OF REUSED WATER
2 041 003 m 3
Grupa Azoty S.A.
Grupa Azoty ZAK
22.4%
86 984 m 3
reverse osmosis unit
850 101 m
condensate treatment plant
3
40.6%
2 861 160 m 3
recirculation system for treated industrial wastewater, ash and slag hydraulic transport water, spent cooling water, and storm water (the mixture is used to produce industrial water)
3.7%
3 805 283 m 3
waters assumed pure*
9 451 800 m 3
spent cooling water powering decarbonation stations
Grupa Azoty Puławy
Grupa Azoty Police
luwy unit (reuse in three cooling circulation systems to compensate losses)
9.8%
2 868 000 m
3
water recirculated to intakes
1 021 030 m
3
turbine condensate
209 580 m 3 1 014 850 m 3
dirty condensate process condensate
*16% last year – the substantial decrease was due to upgrade work in 2013.
Consumption optimisation measures other than recycling, such as closed cooling circuits, are also used. A good example of such optimisation is the Police plant, which operates three systems circulating substantial amounts of water: the CCW cycle (16,500 m3/h), the TCW-1 cycle (14,400–21,000 m3/h), and the TCW-2 cycle (3,000 m3/h). The improvement in efficiency is best illustrated by contrasting the amount of water circulating in closed cooling cycles throughout the year (321,880,560 m3/year) with the amount of water abstracted from intakes (147,905,778 m3).
EN DMA22-23 G4-EN22
WASTEWATER MANAGEMENT Production processes generate various types of wastewater (such as industrial wastewater, sanitary sewage, stormwater, and spent cooling water). Depending on its type, wastewater generated at the Tarnów plant is transported using the industrial water system to be treated at the Central Wastewater Treatment Plant or the Biological Wastewater Treatment Plant. Industrial wastewater and
sanitary sewage undergo mechanical and chemical treatment at the Central Wastewater Treatment Plant. The treated water is then discharged into the Biała Tarnowska river. Industrial wastewater containing biodegradable substances is directed to drains and trestle-supported sewer lines, and subsequently treated biologically at the Biological Wastewater Treatment Plant. The wastewater is then additionally streamed to the Wastewater Treatment Facility operated by the Tarnów Water and Sewage Utility (Zakład Oczyszczalni Ścieków Tarnowskich Wodociągów Sp. z o.o.). Stormwater and spent cooling water from the plant’s premises are drained separately, collected in a retention pond and then directed through a Sutro weir into the Dunajec river. If a failure occurs at one of the installations and the wastewater contaminates the EF drain, the drain may be cut off completely and all of the wastewater may be pumped to the Central Wastewater Treatment Plant, where specific water quality parameters can be achieved. It is also possible to flow the entire volume of wastewater to the Wastewater Treatment Facility operated by the Tarnów Water and Sewage Utility (Zakład Oczyszczalni Ścieków Tarnowskich Wodociągów Sp. z o.o.).
87 integrated report | 2013
Grupa Azoty Police operates an onsite wastewater treatment plant comprising stationary equipment for mechanical and chemical treatment of raw sewage. In addition to industrial wastewater, sanitary sewage, leachate from landfill sites and municipal wastewater from the town and municipality of Police are also treated at the plant (following preliminary treatment in Police, the wastewater is directed to the on-site plant through the sewer system). The treatment technology in use at the plant is listed among the Best Available Techniques (BAT) for the industry (’Central final treatment of inorganic waste water in a chemical-mechanical WWTP’). The treatment procedure involves lime milk-based wastewater neutralisation, aeration, coagulation, sedimentation, centrifugation, and final treatment in retention and equalisation ponds where the separated effluent is treated naturally. As the treatment process is highly efficient, the discharged wastewater’s parameters are well below prescribed values, and their impact on the quality of water is negligible. Spent cooling water and stormwater from the Police plant, which are discharged directly into the surface waters of the Oder river, undergo regular and automatic pH monitoring to control their acidity.
WATER MANAG EMENT PERCENTAGE AND VOLUME OF REUSED WATER IN 2013
Grupa Azoty Puławy’s treated wastewater is discharged into the Wisła river. Individual wastewater types are treated at the Central Industrial Wastewater Treatment Plant (mechanical and chemical treatment), Biological Industrial Wastewater Treatment Plant (biological treatment), Blackwater Treatment Plant (biological treatment), and local pretreatment facilities. The discharged water’s parameters
recorded in 2013 were significantly below the limits specified in the integrated permit. The quality of wastewater discharged by Grupa Azoty ZAK to the Oder river was equally good. The plant has a wastewater treatment system comprising local pretreatment facilities, the Central Mechanical Wastewater Treatment Plant, and the Central Mechanical and Biological
Wastewater Treatment Plant. The wastewater is also directed to the Piskorzowiec Wastewater Treatment Plant. The on-site mechanical and biological wastewater treatment plant underwent upgrade work in the past years, which included the erection of a sediment dewatering station. Upgrade work at the Central Mechanical Wastewater Treatment Plant was completed in 2014.
SUPPLEMENTARY NON -FINANCIAL INFORMATION TOTAL WATER ABSTRACTION BY SOURCE [m 3] G4-EN8
Grupa Azoty S.A.
Grupa Azoty ZAK
2012
2013
2012
2013
Surface water
11 961 000
12 673 000
3 811 000
3 839 540
Groundwater
555 000
594 000
1 849 900
1 345 200
Municipal water supply
0
0
0
0
Other
0
0
1 675 100
1 867 500
12 516 000
13 267 000
7 336 000
7 052 240
Total
Grupa Azoty Puławy*
Grupa Azoty Police
2012
2013
2012
2013
Surface water
94 063 885
103 431 596
162 245 909
147 905 778
Groundwater
3 536 005
3 813 180
0
0
0
0
349 945
340 756
Municipal water supply Other Total
0
0
0
0
97 599 890
107 244 776
162 595 854
148 246 534
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
88 integrated report | 2013
WATER MANAG EMENT SUPPLEMENTARY NON -FINANCIAL INFORMATION
G4-EN22
VOLUME OF WASTEWATER
Unit
Volume 2012
2013
Grupa Azoty S.A. Central wastewater treatment plant – mechanical and chemical treatment
m3
3 622 000
4 042 000
Biological wastewater treatment plant – biological treatment
m
1 427 000
1 415 000
3
Grupa Azoty ZAK Wastewater treatment system
m3
1 996 898
2 231 333
Piskorzowiec Wastewater Treatment Plant
m3
4 749 094
6 098 670
Central wastewater treatment plant – mechanical and chemical treatment
m3
2 684 969
2 580 467
Biological industrial wastewater treatment plant – biological treatment
m
3
1 295 760
1 332 850
Blackwater treatment plant – biological treatment
m
3
101 650
126 760
Dawidagi – mechanical treatment
m3
254 736
254 040
Biological treatment – tertiary treatment
m3
85 885 399
98 155 513
m3
42 062 549
36 419 081
Grupa Azoty Puławy*
Grupa Azoty Police On-site Mechanical and Chemical Wastewater Treatment Plant
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
G4-EN22
WASTEWATER DISCHARGE BY DESTINATION
Unit
Volume 2012
2013
Grupa Azoty S.A. Biała Tarnowska river
m3
3 622 000
4 042 000
The Wastewater Treatment Facility operated by the Tarnów Water and Sewage Utility (Zakład Oczyszczalni Ścieków Tarnowskich Wodociągów Sp. z o.o.); then discharged to the Biała river
m3
1 427 000
1 415 000
Dunajec river
m3
712 000
824 000
m3
4 749 094
6 098 670
m3
85 885 399
98 155 513
m3
42 062 549
36 419 081
Grupa Azoty ZAK Oder river
Grupa Azoty Puławy* Wisła river
Grupa Azoty Police Internal seawaters – Oder river
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
89 integrated report | 2013
Grupa Azoty S.A. leases and manages 72.2 ha of land located within a protected area of the Dunajec river catchment basin. The operations carried out within this area, which contains surface and underground water intake facilities, as well as reservoirs feeding water to an underground municipal water intake point, pose no threat to biodiversity. Abstraction of water is subject to relevant permits which set the maximum quantities of water that may be drawn, ensuring they are not excessive. In the case of Grupa Azoty S.A. the protected areas include ’Dolny Dunajec’ (Lower Dunajec River) (code: PLH120085; area: 1,293.9 ha) and ’Biała Tarnowska’ (Biała Tarnowska River) (code: PLH120090, area: 957.5 ha).
ENVIRONMENT OF GRUPA AZOTY POLICE As for Grupa Azoty Police, it owns or holds perpetual usufruct right to land adjacent to areas protected for their high biodiversity value. These include the following Natura 2000 sites: ■■
’Police – Kanały’ (Police Canals) (code: PLH320015; area: 100.2 ha),
■■
’Zalew Szczeciński’ (Szczecin Lagoon) (code: PLB320009, area: 47,194.6 ha),
■■
’Ujście Odry i Zalew Szczeciński’ (Oder Estuary and Szczecin Lagoon) (code: PLH320018, area: 52,612.0 ha).
8,182.3 ha), ’Płaskowyż Nałęczowski’ (Nałęczów Plateau) (code: PLH060015, area: 1,080.7 ha), ’Dolina Środkowej Wisły’ (Middle Wisła River Valley) (code: PLB140004, area: 30,777.9 ha), ’Małopolski Przełom Wisły’ (Lesser Poland Wisła River Gorge) (code: PLB140006, area: 6,972.8 ha), ’Przełom Wisły w Małopolsce’ (Wisła River Gorge in Lesser Poland) (code: PLH060045, area: 15,116.4 ha).
ENVIRONMENT OF GRUPA AZOTY PUŁAWY Also in the vicinity of Grupa Azoty Puławy there are protected areas of high ecological value, including three nature reserves. The first of them is ’Jezioro Piskory’ (Lake Piskory), a body of water created by damming the Duży Pioter watercourse. The lake, which is one of the Lublin region’s finest refuges for waterfowl and marshland birds, is located some 4.5 km north of the company’s premises. Another reserve is called ’Łęg na Kępie’ in Puławy. Established to protect a natural floodplain forest of elms in the Wisła river valley, it also contains forests of willow and poplar trees as well as elm and ash trees, remnants of vast riparian forests that used to cover the Wisła river terrace. That second reserve is located some 4.5 km south of the company’s premises. The third protected area is ’Czapliniec’ near the village of Gołąb, an animal preserve established to protect a breeding colony of grey herons. Another unique site located at some distance from the company’s plant is the Kazimierz Landscape Park, dissected by a system of gullies formed in the easily eroding loess soil. There are also six areas of high natural interest included in the Natura 2000 network at distances varying between 1.8 km to 16.2 km from the plant: ’Puławy’ (code: PLH060055, area: 1,157 ha), ’Dolny Wieprz’ (Lower Wieprz River) (code: PLH060051, area:
ENVIRONMENT OF GRUPA AZOTY ZAK
G4-EN14
ENVIRONMENT OF GRUPA AZOTY S.A.
At some distance from the premises of Grupa Azoty Police there are also several areas designated as nature reserves, including ’Białokrzew Kopicki’, ’Olszanka’, ’Uroczysko Święta’, ’Świdwie’, and ’Ostoja Wkrzańska’ (formerly ’Puszcza Wkrzańska’) (code: PLB320014, area: 14,575.7 ha).
G4-EN12
The Group is fully aware of operating within a specific environment, and of coexistence in its immediate vicinity of areas of high natural and ecological values. Its priority is to respect this diversity unconditionally.
G4-EN12
EN DMA11-12
G4-EN11
B i od i v er si t y
There are no protected areas of high natural value in the immediate proximity of Grupa Azoty ZAK’s premises. However, there are some Natura 2000 sites located between 10 km to 20 km away, including Park Krajobrazowy Góra św. Anny (Saint Ann Mountain Landscape Park) (PLH160002, area: 5,084.3 ha), and Obszar Chronionego Krajobrazu Łęg Zdzieszowicki (Zdzieszowice Floodplain Forest Protected Landscape Area) (PLH160011, area: 619.9 ha). Detailed and up-to-date information on all the listed areas, including information on their protected species and habitats, can be found in two publicly available databases – Catalogue of Natura 2000 sites compiled by the Institute for Sustainable Development (INE), and the Central Register of Nature Protection Forms (CRFOP)14. According to the calculations of air pollution dispersion, there were no instances of exceeding the allowable concentrations of any pollutants outside the areas to which the Group holds legal title. The conclusion is that the Group’s pollutant emissions have no negative impact on the biology of any neighbouring areas.
14 Catalogue of Natura 2000 sites: http://www.obszary.natura2000.org.pl/index. php?s=lista&o=wyszukiwarka. Central Register of Nature Protection Forms (CRFOP): http://crfop.gdos.gov.pl/CRFOP/search.jsf
90 integrated report | 2013
G4-EC2
G4-EN15
EN DMA15-21
AIR EMISSIONS
In line with the environmental management system in place, the Grupa Azoty Group strives to mitigate its atmospheric emissions, both in terms of volumes and parameters of emitted gases. As regards greenhouse gases, the Grupa Azoty Group emits mainly carbon dioxide (CO2), a typical pollutant generated by many branches of the industry, as well as nitrous oxide (N2O), generated in the production of nitric acid. Key sources of carbon dioxide emissions are the Group’s CHP plants and production facilities, primarily ammonia and hydrogen, caprolactam, nitric acid, melamine and urea units. Significant impacts are also associated with the production of synthesis gas, aldehydes and alcohols. Efforts made by Grupa Azoty to mitigate its GHG emissions not only benefit the environment, but are also an important driver of its long-term financial performance. This is connected with the European Union’s emissions trading scheme (EU ETS).
91 integrated report | 2013
AIR EMISSIONS REDUCTION IN GHG EMISSIONS ACHIEVED IN RECENT YEARS
At Puławy, the replacement of the nitrous oxide reduction catalyst and the changed method of its installation in the nitric acid unit’s reactors have contributed to reducing emissions. Total emission reductions achieved as part of the Joint Implementation project in 2008−2012 amounted to 7,211,720 tonnes of CO2. The project involved the application of a high-temperature catalyst for decomposition of nitrous oxide in the ammonia oxidation reactors of the nitric acid facility. As a result, the volume of N2O emissions has been reduced.
In recent years, including the closed period of Joint Implementation projects, the Group has taken a number of specific measures that have notably contributed to reducing its GHG emissions. In 2013, it replaced the catalyst for high-temperature decomposition of nitrous oxide in the ammonia oxidation reactors of the dual pressure nitric acid facility in Tarnów. Thanks to the sustained, intensive catalytic activity enabling a reduction of the N2O content in outlet gases by as much as 95%, emissions of this greenhouse gas have been substantially lowered. As a result, 174 tonnes of nitrous oxide have not been released into the air. Emission reductions achieved as part of the Joint Implementation projects have already amounted to 2,674,356 Mg of CO2e. Cumulative emission reductions in 2008−2012 at Grupa Azoty ZAK amounted to 1,224,538 Mg of CO2e. As part of a Joint Implementation project, a secondary catalyst was installed at the TKIV nitric acid production unit, which decomposes N2O inside the reactor, exactly where it is generated. Under high temperature and in the presence of the catalyst, N2O is decomposed into nitrogen (N2) and oxygen (O2).
Grupa Azoty Police did not participate in Joint Implementation projects (JI) in the second trading period (2008−2012), and in 2013 there were no direct activities on any of the EU ETScovered installations. As part of its own activities, in 2008 the company completed an upgrade of its fertilizer unit. The result of the project, spanning the years 2005−2008, is a reduction in CO2 emissions by about 10,000 Mg CO2 per year. Its scale is best demonstrated by a sharp reduction in the emissions intensity ratio: from 0.045 Mg CO2/1 Mg of fertilizer to 0.0038 Mg CO2/1 Mg of fertilizer.
CO 2 EMISSIONS INTENSITY RATIO (%) (ABSOLUTE CO 2 EMISSIONS IN TONNES RELATIVE TO THE OUTPUT OF AMMONIA IN TONNES) 2012
2013
Change
Grupa Azoty S.A.
1.758
1.874
+6.6%
Grupa Azoty ZAK
ND
1.727
–
1.700
1.676
-1.4%
Grupa Azoty Police
Grupa Azoty Puławy*
1.941
1.925
-0.8%
Grupa Azoty (total)
1.771
1.759
-0.6%
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
92 integrated report | 2013
OTHER AIR EMISSIONS
G4-EN18
G4-EN19
REDUCTIONS IN NITROUS OXIDE EMISSIONS
Last year saw great progress in the mitigation of N2O emissions, as the emissions intensity ratios recorded by all the three Group companies producing nitric acid came very close to the level prescribed by BAT.
G4-EN18
N 2O EMISSIONS INTENSITY RATIO (ABSOLUTE N2O EMISSIONS [KG] RELATIVE TO THE OUTPUT OF NITRIC ACID [MG]) 2012
2013
Change
1.99
1.36
-31.7%
Grupa Azoty ZAK
b.d.
1.03
–
Grupa Azoty Puławy*
2.03
1.16
-42.9%
Grupa Azoty Police
n/d
n/d
n/d
Grupa Azoty (total)
2.02
1.16
-42.7%
Grupa Azoty S.A.
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
At Grupa Azoty S.A. the benchmark level is expected to be achieved already in 2014, thanks chiefly to the catalyst replacement. Also at Grupa Azoty Puławy, where the N2O emissions intensity ratio in nitric acid production was brought down from 2.03 in 2012 to 1.16 in 2013, the improvement resulted from the replacement of the N2O reduction catalyst and changed method of its installation in reactors.
The ratio achieved in 2013 was slightly higher than the benchmark used to calculate a share of emission allowances to be allocated for free under the EU ETS (ca. 1 kg of N2O/ tHNO3), but lower from the level prescribed by the Best Available Techniques (BAT) for existing medium-pressure installations (1.85 kg of N2O/tHNO3). The nitric acid production units operated by Grupa Azoty ZAK S.A. are modern facilities which meet the benchmarks for N2O emissions and are compliant with the BAT standards. Altogether, the Grupa Azoty Group improved its performance by 43% year on year.
93 integrated report | 2013
Ot h er ai r em i s si o ns
SOx, NOx AND OTHER SIGNIFICANT AIR EMISSIONS G4-EN21
G4-EN21
In addition to GHG emissions, activities carried out by the Grupa Azoty Group were also a source of other air emissions.
Greenhouse gas
Emissions
Unit
2012
2013
Change (%)
Grupa Azoty S.A. Nitrogen oxides (NOx)
Mg
6 252.7
6 501.1
4.0%
Sulfur dioxide (SO2)
Mg
3 704.1
4 454.6
20.3%
Total dust
Mg
332
378.5
14.0%
Ammonia (NH3)
Mg
191
185
-3.1%
Methane (CH4)
Mg
25.6
74.6
191.4%
Carbon monoxide (CO)
Mg
188
214
13.8%
Sulfuric acid (H2SO4)
Mg
80.1
87.2
8.9%
Nitrogen oxides (NOx)
Mg
1 130
1 184
4.8%
Sulfur dioxide (SO2)
Mg
1 910
2 154
12.8%
Volatile organic compounds (VOC)
Mg
10
8
-20.0%
Carbon monoxide (CO)
Mg
2 674
1 922
-28.1%
Ammonia (NH3)
Mg
446
459
2.9%
Organic acids
Mg
13
5
-61.5%
Benzene (C6H6)
Mg
0.35
0
-100.0%
Methane (CH4)
Mg
10
5
-50.0%
Total dust
Mg
279
324
16.1%
Particulate matter
Mg
45
209
364.4%
Aliphatic alcohols
Mg
9
7
-22.2%
Mg
7 394
4 111
-44.4%
Grupa Azoty ZAK
Grupa Azoty Puławy* Sulfur dioxide (SO2) Nitrogen oxides (NOx)
Mg
4 183
2 951
-29.5%
Ammonia (NH3)
Mg
811
902
11.2%
Ammonium nitrate dust
Mg
379
385
1.6%
Urea dust
Mg
28
28
0.0%
Ammonium sulfate dust
Mg
3.6
6
66.7%
Melamine dust
Mg
13
15
15.4%
Dust from fuel combustion
Mg
194
113
-41.8%
Grupa Azoty Police Sulfur dioxide (SO2)
Mg
4 079
3 011
-26.2%
Nitrogen dioxide (NO2)
Mg
1 703
1 477
-13.3%
Carbon monoxide (CO)
Mg
171
195
14.0%
Fluorine compounds
Mg
7
5
-28.6%
Ammonia (NH3)
Mg
1 012
1 075
6.2%
Sulfuric acid (H2SO4)
Mg
54
37
-31.5%
Total dust
Mg
646
604
-6.5%
Aliphatic hydrocarbons
Mg
0.04
0.04
0.0%
Benzo(alpha)pyrene (C2OH12)
Mg
0.13
0.00
-100.0%
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
94 integrated report | 2013
REDUCTIONS IN NITROUS OXIDE EMISSIONS
The increase in Grupa Azoty’s emissions of dust, sulfur dioxide and carbon monoxide from fuel combustion recorded in 2013 resulted from higher output of steam from its CHP plant. On the other hand, the reduced emissions of ammonia in Tarnów can be linked to lower output of ammonium nitrite. An increase in hydrogen output by Grupa Azoty S.A. resulted in higher methane emissions. At Grupa Azoty ZAK, we should note the increase in dust and sulfur dioxide emissions (higher heat output), and the reduction in carbon monoxide emissions due to lower anhydride output.
Innovative Desulfurization Unit At Grupa Azoty Puławy
Significant changes in emission levels were seen at Grupa Azoty Puławy: the 2013 increase in ammonia emissions followed the launch of a new flue gas desulfurization unit (new source of emissions). On the other hand, the new unit has helped to significantly lower sulfur dioxide emissions (by about 44%). The marked reduction in NOx emissions in 2013 resulted from the completion of phase 1 of the project to construct NOx reduction units at boilers No. 4 and No. 5 (emissions have been lowered to 350mg/m3; the final completion of work in 2014 will reduce them further to less than 200mg/m3). Another factor behind the reduced NOx emissions was the launch, in the fourth quarter of 2012, of a selective catalytic reduction (SCR) unit on line 4 of the nitric acid production facility.
On July 8th 2013, Europe’s first and the world’s third ammonia-based wet flue gas desulfurization unit was officially placed in service in Puławy. The project will reduce air emissions from the CHP plant by more than 80%, with ammonium sulfate obtained as a process by-product to be used in the manufacture of sulfur fertilizers by the New Fertilizer Production Facility.
SUPPLEMENTARY NON - FINANCIAL INFORMATION
G4-EN15
GREENHOUSE GAS EMISSIONS
Greenhouse gas
Unit
Emissions [Mg of CO2 equivalent] 2012
2013
Grupa Azoty S.A. Carbon dioxide (CO2)
Mg
1 104 908
1 210 550
Nitrous oxide (N2O)
Mg
177 122
118 419
Carbon dioxide (CO2)
Mg
394 859
1 103 923
Nitrous oxide (N2O)
Mg
-
147 887
Carbon dioxide (CO2)
Mg
3 363 384
3 382 499
Nitrous oxide (N2O)
Mg
533 357
303 614
Mg
1 658 309
1 676 201
Grupa Azoty ZAK*
Grupa Azoty Puławy**
Grupa Azoty Police Carbon dioxide (CO2)
* Emissions from the EU ETS-covered installations. ** Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
95 integrated report | 2013
G4-EN23
Wa s t e manag em en t
Efforts to mitigate waste-related threats start from waste prevention at all levels, from planning, to designing, to manufacture of products, as well as during and after their consumption. This objective has long been a key element of the Grupa Azoty Group’s operational strategy. Upgrades of old installations and launch of new, low-emission and low-waste BAT-compliant technologies help minimise the amount of waste while boosting output, minimise resource consumption, and improve waste sorting for recovery and recycling.
Grupa Azoty Police is the only Polish plant to operate a titanium white production facility. The process byproducts include hydrolytic sulfuric acid and iron (II) sulfate, which can be converted into commercial products and so are stored (hydrolytic sulfuric acid) or extracted from the landfill site (iron (II) sulfate) for reprocessing. After drying, the iron (II) sulfate waste is sold to customers, while the leachate which has passed through the iron (II) sulfate landfill site is used as a coagulant in the company’s wastewater treatment facility. The hydrolytic acid, on the other hand, is recovered in the fertilizer facility. Together with used-up catalysts, it is recycled in the phosphoric acid production unit. Due to the landfilling process, the annual waste balances include significant volumes of stored waste, carried over to the next accounting year. In the case of iron (II) sulfate, the volume processed into commercial products exceeds the volume generated during the year, which is connected with the extraction of waste landfilled in previous years. From the environmental point of view, this is a highly positive development.
The main types of waste produced by the Grupa Azoty Group include residue of coal combustion at the CHP plants and sludge from effluent treatment. Given its specific production profile, the main type of waste produced by Grupa Azoty Police is phosphogypsum, which − mixed with power generation waste − is landfilled separately on site. Sustainable waste management takes more than just modern technologies. It also requires staff awareness and clearly defined rules laid down in a company’s internal regulations. The development and implementation of procedures forming a comprehensive waste and packaging management framework have helped significantly reduce the volume of waste generated by the Group. It should be noted that the Group’s waste is increasingly reused, mainly through resource recovery. It is also sorted and stored at designated and properly marked locations. Individual Group companies have their own recovery and disposal processes for some waste, while other waste is transferred to licensed waste management contractors. Some is used as a source of raw materials by Grupa Azoty S.A. For instance, plastic waste is recycled in the Compounding PA6 and Compounding POM units.
In order to expand the capacity of Grupa Azoty Puławy’s landfill site for waste other than hazardous and inert waste, phase 1 of the project to raise the dykes of the K1, K2, K4 and K6 cells by 3 meters, up to 132.50 metres above sea level, was executed in 2009−2012.
96 integrated report | 2013
Wa s t e manag em en t
Phosphogypsum Landfill Site at Grupa Azoty Police
Back in 2012, Grupa Azoty S.A. finished the construction of an advanced facility designed to collect ash from the on-site CHP plant. It has noticeably reduced the volume of landfilled waste, enabling its commercial utilisation. Currently, the collected ash is sold to third-party customers (including concrete, brick and cement manufacturers).
The storage technology used at the phosphogypsum landfill site has won the company a certificate of the American World Environment Center foundation. Since 1994, Grupa Azoty Police has made efforts to introduce high growing vegetation at the landfill site. There is already a profusion of sodforming vascular plants. The condition of the grass sod, the extent to which it covers the site, the visual appearance of the plants and their ability to go through all development phases, including growth of fertile shoots, demonstrate the ability of many plant species to develop normally in this environment. For a number of years, the landfill site has been a habitat for many plant species and an assemblage of animals, including some 100 species of birds. The ornithologists from the Szczecin University who conducted research over an area adjacent to the landfill site (storage reservoirs for the wastewater treatment plant) have found that the area can be compared to the Świdwie reserve in terms of the populations and diversity of bird species.
97 integrated report | 2013
Waste generated by Grupa Azoty is classified and disposed of as required by law. A notable success of last year is that the volume of hazardous and nonhazardous waste was reduced by nearly 10% and over 19%, respectively, resulting in an overall waste volume reduction of almost 19%.
G4-EN28
Ash Collection Facility in Tarnów
Individual companies of the Grupa Azoty Group comply with the legal requirement defining a percentage of packaging materials that must be reclaimed through a professional provider of recycling services. In 2013, all the companies met the legally prescribed levels of packaging reclaimed and recycled.
Wa s t e manag em en t SUPPLEMENTARY NON -FINANCIAL INFORMATION
G4-EN28
PERCENTAGE OF PACKAGING MATERIALS THAT ARE RECLAIMED RELATIVE TO VOLUMES MARKETED (%)
Grupa Azoty S.A. 15%
Grupa Azoty ZAK
Grupa Azoty Puławy 15%
21.5%
21.5%
Grupa Azoty Police 16.5%
21.5%
23.7%
46% 46%
58%
Wooden packaging
Plastic packaging
Steel packaging
Grupa Azoty S.A. Total packaging Recovery rate for total packaging
46%
58%
15%
63.8%
50.6%
Paper and cardboard packaging
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
50%
50%
50%
55.0%
58.5%
58.5%
58.5%
64.4%
G4-EN23
WASTE BY TYPE
Unit
Waste weight 2012
2013
Grupa Azoty S.A. Hazardous waste
Mg
127
108
Non-hazardous waste
Mg
98 228
96 835
Total
Mg
98 355
96 943
Hazardous waste
Mg
3 162
4 816
Non-hazardous waste
Mg
88 418
110 466
Total
Mg
91 580
115 282
Hazardous waste
Mg
416
605
Non-hazardous waste
Mg
198 776
212 135
Total
Mg
199 192
212 740
Grupa Azoty ZAK
Grupa Azoty Puławy*
Grupa Azoty Police** Hazardous waste
Mg
76 335
68 245
Non-hazardous waste
Mg
3 616 034
2 817 867
Total
Mg
3 692 370
2 886 112
* Grupa Azoty PUŁAWY’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012). ** Large amounts of waste are processed at facilities operated by the company. The hydrolytic sulfuric acid stored by the company is re-used in the production of phosphoric acid and ammonium sulfate. Consequently, the annual waste balances include the volumes stored and carried over to the next accounting year (hydrolytic acid). The negative balance of the iron (II) sulfate landfill site is due to the 100% commercial utilisation of the waste volume generated in a given calendar year and extraction of the waste landfilled in previous years.
98 integrated report | 2013
Wa s t e manag em en t SUPPLEMENTARY NON -FINANCIAL INFORMATION
G4-EN23
WASTE BY DISPOSAL METHOD
Unit
Waste weight 2012
2013
Grupa Azoty S.A. On-site recovery
Mg
90
0
Transfer to third-party contractors
Mg
98 265
96 943
Total
Mg
98 355
96 943
Grupa Azoty ZAK* On-site landfilling
Mg
2 706
0
Transfer to third-party contractors
Mg
106 241
125 121
Total
Mg
108 947
125 121
Mg
569
780
Grupa Azoty Puławy** On-site recovery On-site landfilling
Mg
28 231
26 238
Transfer to third-party contractors
Mg
152 746
185 140
Waste stored at year end compared with waste generated during the year − hazardous waste
Mg
9
49
Waste stored at year end compared with waste generated during the year − non-hazardous waste
Mg
17 637
534
Total
Mg
199 192
212 740
Mg
475 253
403 284
Grupa Azoty Police*** On-site recovery On-site disposal
Mg
1 069 059
883 914
On-site landfilling
Mg
2 064 718
1 533 477
Transfer to third-party contractors
Mg
85 762
84 276
Total
Mg
3 694 792
2 904 951
*
The larger volume of waste disposed of than the volume generated by Grupa Azoty ZAK resulted from the transfer in 2013 of waste produced in previous years to third-party waste disposal contractors. ** Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012). *** In the case of the Police plant, the substantial amount of waste is connected with the extraction from the landfill site and treatment of the iron (II) sulfate waste (landfilled in previous years), in the process described above.
99 integrated report | 2013
EN DMA30
G4-EN30
TRANSPORT
The Company does not have its own fleet of transport vehicles to carry raw materials and products. However, it operates a fleet of passenger cars and delivery vehicles, all of which are modern vehicles equipped with fuel-efficient engines with low exhaust emissions. With respect to its fleet, the Company has put in place standard environmentally-friendly procedures concerning the recycling of waste, such as used batteries and tyres.
The main type of transport vehicles used by Grupa Azoty S.A. to carry fertilizers is semi-trailers with tarpaulin covers, provided by third parties. While the Company does not require the carriers to comply with specific EURO standards, it obligates them to use the shortest possible routes and vehicles complying with the EURO 5 and EURO 6 emission standards.
TRANSPORT STRUCTURE Grupa Azoty S.A.
Grupa Azoty ZAK
Rail transport
84.6%
Road transport
14.0%
1.4%
Sea transport (including, for instance, combined rail and sea transport)
Grupa Azoty Puławy
Grupa Azoty Police
66.0%
41%
30.2%
29.7%
40%*
29.1%
4.3%
19%
40.7%**
* 38% road transport and 2% combined road and rail transport; ** including 2.1% inland waterway transport.
Two factors come into prominence when considering environmental impacts of our transport activities: the direct environmental impact arising from the use of electricity and fuels as well as exhaust gas and noise emissions, and the need to ensure environmental safety when carrying hazardous substances (for more information, see ’Transport safety’).
With advanced logistics solutions, we are able to optimise shipments, which translates into financial and environmental savings. Generally, the use of rail transport is most optimal. However, for the Police plant, given its location, it is sea transport that is most beneficial.
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Taking part in global markets means working across great distances. Our raw materials arrive from far away, while the products travel even further. It's not just a question of cost, but also of safety – responsibility for places where are products arrive, and for every kilometer of roadway which gets them there. 101 integrated report | 2013
ENVIRONMENTAL PROTECTION PROJ ECTS
EN DMA27
G4-EN27
KEY PRO -ENVIRONMENTAL INVESTMENT PROJECTS
The Grupa Azoty Group’s strategy provides for the use of energy-efficient technologies and mitigation of the Group companies’ environmental footprint. These objectives translate into very specific obligations and investments in assets at the individual companies of the Grupa Azoty Group. The investments are expected to significantly reduce operating costs, including the cost of fees and charges paid for economic use of the environment. Grupa Azoty S.A. ■■ In 2013, the Company completed
an upgrade of the sulfuric acid plant. The project involved installation of a new contactor system with heat exchangers and economisers, as well as construction of a sulfur furnace with a waste heat boiler. Its completion resulted in improved environmental performance and increased steam output. ■■ In 2013, the Company completed the
distillation of palladium-catalysed cyclohexanone rectification residue project. It helped reduce the consumption of phenol and energy (power, 0.9 MPa steam, 1.7 MPa steam, frigories, natural gas, and circuit water) used in cyclohexanol production. ■■ In 2014, the Company plans
to complete upgrade of the interior of ammonia synthesis reactors. The project is expected to result in reduced consumption of electricity needed to compress synthesis gas and cooling ammonia, better use of reaction heat to produce steam, and reduced consumption of the coolant. ■■ Plans for 2014−2016 include upgrade
of the existing infrastructure of on-site CHP No. 2, and bringing the existing system to full compliance with the new emission standards.
Grupa Azoty ZAK ■■ In 2014, the company completed
an upgrade of the Mechanical Wastewater Treatment Plant, with the current maximum work load of 500 m3/h. The project will result in increased efficiency of wastewater pretreatment and, as a result, improved parameters of treated wastewater from the mechanical section of the plant. ■■ A new facility is planned to be put
into service, which will replace the technologically obsolete and worn-out installations of the existing on-site CHP plant. The completion of the project will help increase the efficiency of heat and electricity generation and reduce air emissions (the project is planned for 2014−2016, with the new plant expected to be put into service in 2017).
Grupa Azoty Puławy ■■ The construction of a flue gas
desulfurization unit was completed in 2013. The purpose of the project was to reduce sulfur dioxide emissions into air from 3,000 mg/m3 to below 200 mg/ m3. The FGD unit uses the wet ammonia method to reduce sulfur emissions. ■■ For 2014, the company plans
completion of the construction of NOx reduction units on OP-215 boilers No. 4 and No. 5. ■■ The construction of the Biological
Wastewater Treatment Plant’s precipitate dehydration unit is expected to be completed in 2014. It will allow Grupa Azoty Puławy to outsource management of this waste to third parties, and thus eliminate the need to deposit it within the landfill site.
Grupa Azoty Police ■■ In 2013, the company completed
a project involving construction of the iron (II) sulfate neutralisation plant ’MONOHYDRAT’. Its purpose is to facilitate the management of waste produced by the titanium white plant. Neutralised iron (II) sulphate monohydrate may be used for the purpose of chrome (VI) reduction in the cement industry. ■■ In 2015, a flue gas treatment unit
is expected to be put into service and upgrade of CHP plant No. 2 is scheduled to be completed.
102 integrated report | 2013
■■ In 2015, the company also plans to complete
construction of an industrial wastewater neutralisation unit at the titanium white plant, which will help reduce sulfate ion emissions to water. ■■ Construction of a decomposition sludge
neutralisation unit is expected to be completed in 2015. This project is designed to reduce sulfate ion emissions to water from the titanium white production plant. ■■ In 2014, the company will complete
expansion of the post-calcination gas desulfurization system through the addition of two new reactors (SO2 emissions from the titanium white plant). ■■ Phase 1 of a project to upgrade the
decomposition gas treatment system is scheduled to be completed in 2014. It is designed to reduce SO2 emissions from the titanium white plant (the purpose of the project is to reduce SO2 emissions and limit emissions of sulfuric acid mists from the feedstock decomposition unit at the titanium white plant). ■■ The start-up of a continuous monitoring
system for SO2 and dust emissions from the titanium white plant is also planned for 2014. ■■ The plans for 2014 also include a project
involving the purchase and installation of a second roller mill system, whose objective is to eliminate the Raymond mill line and thereby reduce the nuisance caused by plant operation, as well as noise levels, electricity consumption and costs of repair/ maintenance of the calcite milling unit.
Over pln 160m invested in a pro-environmental project by Grupa Azoty Police Grupa Azoty Police is implementing a new pro-environmental project to construct a flue gas treatment unit. With its cost exceeding PLN 163m, it is the second project of that scale implemented in the area of the Province of Szczecin, after the Świnoujście LNG terminal. The project is part of the upgrade of CHP plant No. 2. Once the work is completed in 2015, Grupa Azoty Police will significantly reduce certain air emissions and meet the more restrictive standards imposed on the Polish energy sector by the European Union. It is an element of changes within the Polish energy sector, which is currently undergoing a process of transformation.
EN DMA29
G4-EN29
COMPLIANCE
Internal regulations and procedures in place at the Grupa Azoty Group ensure compliance with environmental protection regulations. However, despite the utmost care exercised and attention paid to the environmental issues by the management boards of the individual companies and the employees of the individual business units, last year administrative proceedings were pending against Grupa Azoty Group companies on the grounds of alleged violations of the applicable environmental standards.
In the case of Grupa Azoty Puławy, the analysis of the data from the continuous emissions monitoring system at the on-site CHP plant showed isolated instances of exceeding the sulfur dioxide emission standards. They were caused by boiler change-overs from the old emission source to the new emission source following the installation of a flue gas desulfurization unit, an investment project aimed at improving the quality of flue gases. As at the date of this Report, no decision on a penalty has been made. The Company estimates that it may reach approximately PLN 20 thousand. Other than the above, no exceedance of other parameters was identified, no administrative proceedings concerning environmental protection were pending and no penalties were imposed on the company. In 2013, no environmental fines were imposed on and no complaints were filed against Grupa Azoty Police.
There were administrative proceedings pending against Grupa Azoty S.A., concerning excessive noise emissions from the VRM Unit. As at the date of this Report, no decision on a penalty has been made. The Company estimates that the amount of the penalty should not exceed PLN 12 thousand. In the case of Grupa Azoty ZAK, a penalty of PLN 157,410 was imposed on the company in 2013 for discharging industrial wastewater into the Oder river in 2010 and 2011 in violation of the terms and conditions of the relevant water permit. Grupa Azoty ZAK has planned certain measures to solve the problem of periodic exceedance of permitted parameters of discharged wastewater. It has obtained a decision to postpone the penalty payment deadline until the remedial actions have been taken.
103 integrated report | 2013
104 integrated report | 2013
3 Responsible employer and community member
105 integrated report | 2013
The easiest way to earn respect is by showing it to others. This rule works – we've been practicing it for years in our employee relations. Today we are able to say, that we can always count on the people who work for us – as they can count on us.
106 integrated report | 2013
EMPLOYEES
The Grupa Azoty Group is a significant employer whose headcount at the end of 2013 was almost 14,000, including 10,000 people working in the subsidiaries covered by this Report. The Group’s main companies are also key employers for local communities in the towns where they are situated, i.e. Tarnów, KędzierzynKoźle, Puławy, and Police. The companies being part of the Grupa Azoty Group have been, and continue to be, a major factor in the development of these towns. It is in their proximity that people have gathered and built housing estates.
Employee satisfaction survey In September 2013, a standardised employee satisfaction survey was carried out in the Grupa Azoty Group’s companies in Tarnów, Kędzierzyn-Koźle, and Puławy. The survey aimed at identifying the sources of satisfaction and motivation among the Group’s employees. The respondents declared their loyalty and satisfaction with the work, which they find motivating. They can appreciate the fact that, especially in comparison with other companies operating in the respective regions, the Grupa Azoty Group is an attractive employer. Compared with 2011, the employee loyalty and motivation have increased.
LA DMA1-2 G4-LA2
G4-EC7
G4-EC8
EMPLOYMENT AND ADDITIONAL BENEFITS
Having a workforce in the thousands entails a huge responsibility, not only for them but also for their families. This is why the Grupa Azoty Group’s governing body wants to make sure the employees receive not only decent remuneration and training to foster their development, but also additional benefits. The fact of vital importance at the present time of hardships and insecurity for households is that virtually all employees work under permanent, full-time employment contracts. Employees working in Tarnów, Kędzierzyn-Koźle, and Police are covered by the Employee Pension Plan. Employees of the Group’s individual companies can also benefit from additional medical care and group insurance schemes. Around one and a half thousand employees of Grupa Azoty S.A. benefit from additional medical care services. They have access to GPs and specialist physicians, as well as a selection of specialist medical tests and diagnostics, for a token price of one złoty. In addition to occupational medicine services and specialist consultations, employees covered by the medical care plan receive support to partly pay for preventive vaccination and outpatient rehabilitation. Almost 90% of Grupa Azoty Puławy’s employees are covered by additional group insurance schemes. Under the group insurance, some of them have access to a wide range of medical services. As for employees from KędzierzynKoźle, they can join an additional group insurance scheme, which currently covers 1,244 employees and 326 members of their families. The insurance covers accidents, death, serious illnesses, and hospital stay. Under the insurance policy, both the insured and the joint insured can benefit from medical care services.
107 integrated report | 2013
They are also entitled to additional medical check-ups under annual health promotion programmes. Access to group insurance schemes and additional medical care is also provided to employees from Police. A noteworthy thing is the respect which the Group has for its employees with the longest periods of service. At present, people aged 50 and more represent over 33% of the total workforce, and over 40% in Police. Although in the job market they are commonly referred to as individuals at risk of exclusion, the Grupa Azoty Group considers them priceless. The employment of people aged 50 or more and high innovation potential tend to go hand in hand rather than be mutually exclusive. It must be stressed that a company’s competences often rely on these people, as their expertise and experience constitute an asset giving the Group a competitive advantage. An ability to share this experience with younger colleagues is a crucial condition for the long-term development of companies. The knowledge, which has been passed on to successive generations of chemical engineers since the interwar period, is a unique value of the Grupa Azoty Group. It is a power of creation derived from tradition, a business reality rather than merely a brand identity statement.
EMPLOYEES
MEDIA USED IN INTERNAL COMMUNICATIONS
G4-10
G4-11
G4-LA12
The Grupa Azoty Group’s employees have wide access to information on the Group and its companies. Each company has its local media to communicate key information on current organisational, social, and cultural matters. Media
Grupa Azoty S.A.
Grupa Azoty ZAK S.A.
Grupa Azoty Police
Grupa Azoty Puławy
Corporate bulletin
Tarnowskie Azoty monthly 3,000 copies
Twój ZAK bi-monthly 1,000 copies
Magazyn Police monthly 2,500 copies
PULS monthly 2,000 copies
Broadcasting system
Programme broadcasting three times a day (6:40 am; 10 am; 2:45 pm)
None
Irregular programme broadcasting
Programme broadcasting three times a day (9:30 am; 2:30 pm; 10:30 pm)
Intranet
Available
Available
Available
Available
Employment at the four companies in the period covered by this Report was as follows: EMPLOYMENT BY SEX AND AGE GROUP By sex
2013
By age
Total
Women
Men
<30
30–50
>50
Grupa Azoty S.A.
626
1 446
79
1 268
725
2 072
Grupa Azoty ZAK
473
1 100
114
911
548
1573
Grupa Azoty Puławy
789
2 506
586
1 865
844
3 295
Grupa Azoty Police
554
1841
231
1142
1 022
2 395
2 442
6 893
1 010
5 186
3 138
9 335
Grupa Azoty Group (total)
69.8%
69.9%
76.1%
76.9%
73.8%
100%
35%
34.8%
61.2%
57.9%
25.6%
42.7%
33.6%
100% 56.6% 55.6% 47.7%
Men 30.2%
24%
23.1%
< 30
25.2%
17.8% 3.8%
Grupa Azoty S.A.
30–50
Women 30.1%
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
Grupa Azoty Group (total)
Grupa Azoty S.A.
108 integrated report | 2013
> 50
7.2%
Grupa Azoty ZAK
Grupa Azoty Puławy
9.6%
10.8%
Grupa Azoty Police
Grupa Azoty Group (total)
EMPLOYEES
EMPLOYMENT BY EMPLOYMENT CONTRACT AND FORM By employment contract
2013
By employment form
Full-time
Part-time
Open ended
Fixed term
Grupa Azoty S.A.
2 070
2
1 964
108
Grupa Azoty ZAK
1 567
6
1 520
53
Grupa Azoty Puławy
3 292
3
3 077
218
Grupa Azoty Police
2 395
0
2 228
167
Grupa Azoty Group (total)
9 324
11
8 789
546
0.1%
0.4%
0.1%
0%
0.1%
100%
5.2%
3.4%
6.6%
7%
5.8%
93.4%
93%
94.2%
Grupa Azoty Puławy
Grupa Azoty Police
Grupa Azoty Group (total)
100% 99.9%
99.6%
99.9%
100%
99.9%
94.8%
96.6%
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
Grupa Azoty Group (total)
Grupa Azoty S.A.
Grupa Azoty ZAK
full-time
employed for a definite term
part-time
Grupa Azoty S.A. – 98.8%
■■
Grupa Azoty ZAK – 98.2%
■■
Grupa Azoty Puławy – 99.7%
■■
Grupa Azoty Police – 99.0%
Analysis of employee turnover data reveals trends related to typical replacement of retiring staff with younger employees. The largest group of employees leaving work were the oldest persons, while young people prevailed among the new hires.
109 integrated report | 2013
G4-LA10
■■
LA DMA1-2
Percentage of workforce covered by collective bargaining agreements:
employed for a indefinite term
As regards job departures, particularly of elderly people, it is necessary to mention special bonuses for retirees. Under their collective bargaining agreements, individual companies provide for severance pay for retirees which is higher than that guaranteed by the Polish Labour Code. In order to stay in contact with their retired employees, the companies often host meetings for them.
EMPLOYEES NEW HIRES BY SEX AND AGE GROUP New hires 2013
By sex
By age
Total
Women
Men
<30
30–50
>50
Grupa Azoty S.A.
42
28
25
35
10
70
Grupa Azoty ZAK
20
17
14
17
6
37
Grupa Azoty Puławy
29
75
54
47
3
104
Grupa Azoty Police
36
151
120
61
6
187
127
271
213
160
25
398
Grupa Azoty Group (total)
EMPLOYEE DEPARTURES BY SEX AND AGE GROUP Employee departures 2013
By sex
By age
Women
Men
<30
30–50
>50
Total
Grupa Azoty S.A.
24
38
1
10
51
62
Grupa Azoty ZAK
10
44
2
21
31
54
Grupa Azoty Puławy
25
62
6
11
70
87
Grupa Azoty Police
10
77
8
18
61
87
Grupa Azoty Group (total)
69
221
17
60
213
290
398 400
290
Employee hires
187
Departures
104 70
87 62
87
54 37
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
110 integrated report | 2013
Grupa Azoty (total)
EMPLOYEES
LA DMA9-11
G4-LA9
STAFF DEVELOPMENT AND TRAINING
As stated above, the Grupa Azoty Group attaches great importance to the development of its employees. The number of training hours per employee is not the only proof of that policy. Besides various training courses and seminars meant to upgrade their skills, employees can receive financing or co-financing of language courses or higher education studies. The terms of such financing vary from company to company, and may
depend, like in the Kędzierzyn-Koźlebased company, on whether it is the employer who sends an employee to pursue studies (full financing), or whether it is the employee’s own initiative (partial financing). When taking up studies at a higher education institution, an employee may also be entitled to additional leave. There are no programmes dedicated to persons terminating their employment (retiring employees)
TOTAL AND AVERAGE NUMBER OF EMPLOYEE TRAINING HOURS Total number of training hours 2013
By sex Women
Men
Grupa Azoty S.A.
13 758
29 883
Grupa Azoty ZAK
4 824
Grupa Azoty Puławy
Average number of training hours Total
By sex
Total
Women
Men
43 641
21,98
20,67
21,06
8 384
13 208
10,20
7,62
8,40
16 904
41 388
58 292
21,42
16,52
17,69
Grupa Azoty Police
15 967
34 396
50 363
28,82
18,68
21,03
Grupa Azoty Group (total)
51 453
11 4051
165 504
21,07
16,55
17,73
111 integrated report | 2013
EMPLOYEES
LA DMA9-11
G4-LA11
EMPLOYEE REVIEWS
A common annual performance review system has been implemented at the companies based in Tarnów and Kędzierzyn-Koźle. The other Group companies have in place their own employee review systems. At Grupa Azoty S.A., employee reviews are carried out based on the system referred to at the beginning. The system relies on a 5-grade assessment framework and individual scorecards for all job groups, with the number of criteria ranging from 16 to 25. The scorecards include information on the effectiveness of training received by an employee, proposed areas for professional development, and potential assignment to reserve staff. Last year, 1,908 of Grupa Azoty’s employees received performance reviews, excluding those who had worked for the Company for less than one year. Grupa Azoty Police carries out quarterly performance reviews. Among those reviewed are all employees except Management Board members, the chief accountant and persons employed under manager contracts (those excluded from quarterly reviews are evaluated separately). Last year, approximately 95% of all employees were subject to the review. The Puławy-based company, which has joined the Grupa Azoty Group recently, does not operate a standard employee performance review system. Its review system is limited to the management staff of the three highest tiers (from the Management Board to the N-3 level) and covers close to 150 persons. However, this is a typical MBO review, and does not evaluate the quality of work as such.
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EMPLOYEES
G4-EC5
HR DMA
EC DMA5
LA DMA12
HR DMA3
G4-HR3
NON - DISCRIMINATION
The Grupa Azoty Group is looking to establish a formal framework for preventing discrimination in all forms. Following the date of this Report, Grupa Azoty S.A. adopted appropriate rules to counteract discrimination. This approach is inextricably linked with the building of the Group-wide organisational culture. As there were no instances of discrimination reported at the Group in 2013, no remedial measures were taken on that basis. There were no cases of unfair (i.e. drastically low) remuneration reported at any of the Group companies. At each of the Group companies, the lowest salary was 11%–89% higher than the national minimum pay
MINIMUM SALARIES AT THE GRUPA AZOTY GROUP
Grupa Azoty S.A. 2012 1500
Grupa Azoty ZAK
2013
2012
2900
2013
1500
1600
2012
1600
2406
2800
Grupa Azoty Puławy*
Grupa Azoty S.A.
Ratio of the lowest salary at the company to national minimum pay
2013
1500
2012
1600
2414
Minimum salaries at the grupa azoty group company
Grupa Azoty Police
2885
2013
1500
3029
1600
2049
1770
Minimum salaries in Poland Grupa Azoty ZAK
Grupa Azoty Puławy*
Grupa Azoty Police
2012
2013
2012
2013
2012
2013
2012
2013
193,3%
175,0%
160,4%
150,9%
192,3%
188,8%
136,6%
110,6%
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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EMPLOYEES OTHER NON - FINANCIAL DATA EMPLOYMENT BY SEX 2012
2013
Women
Men
Women
Men
609
1 457
626
1 446
29%
71%
30%
70%
463
1 127
473
1 100
29%
71%
30%
70%
788
2 496
789
2 506
24%
76%
24%
76%
Grupa Azoty S.A. Total number of employees by sex Percentage of employees by sex
Grupa Azoty ZAK Total number of employees by sex Percentage of employees by sex
Grupa Azoty Puławy* Total number of employees by sex Percentage of employees by sex
Grupa Azoty Police Total number of employees by sex
528
1 767
554
1 841
23%
77%
23%
77%
2 388*
6 847*
2 442
6 893
26%
74%
26%
74%
Percentage of employees by sex
Total for the Group Total number of employees by sex Percentage of employees by sex
Total
9 235*
9 335
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
EMPLOYMENT BY AGE GROUP 2012
2013
<30
30–50
>50
<30
30–50
>50
57
1 245
764
79
1 268
725
3%
60%
37,0%
4%
61%
35%
Grupa Azoty S.A. Total number of employees by age group Percentage of employees by age group
Grupa Azoty ZAK Total number of employees by age group
129
940
521
114
911
548
Percentage of employees by age group
8%
59%
33%
7%
58%
35%
534
1 842
908
586
1 865
843
16%
56%
28%
18%
57%
26%
Total number of employees by age group
167
1 156
972
231
1 142
1 022
Percentage of employees by age group
7%
50%
42%
10%
48%
43%
887
5 183
3 165
1 010
5 186
3 138
10%
56%
34%
11%
56%
34%
Grupa Azoty Puławy* Total number of employees by age group Percentage of employees by age group
Grupa Azoty Police
Total for the Group Total number of employees by age group Percentage of employees by age group
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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EMPLOYEES OTHER NON - FINANCIAL DATA
G4-LA12
TOTAL NUMBER OF EMPLOYEES BY WORKFORCE STRUCTURE Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Police
2012
2013
2012
2013
2012
2013
5
7
4
4
3
3
Senior executives
23
23
45
42
26
Managing officers
135
135
80
82
Specialists
208
218
235
Senior staff
255
251
Supervisors
126
Operators
Grupa Azoty Puławy* 2012
2013
Management Board
4
2
27
Top-level management
99
101
102
106
Middle-level management
137
139
242
400
415
Low-level management
268
269
114
116
12
10
Specialists
560
575
126
98
92
139
142
Production staff
2032
2027
726
719
720
707
925
1006
Administration staff
185
182
Laboratory staff
178
196
127
132
191
208
Other bluecollar jobs
410
397
167
156
497
478
Management Board
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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EMPLOYEES OTHER NON - FINANCIAL DATA
TOTAL NUMBER OF EMPLOYEES BY EMPLOYMENT CONTRACT, EMPLOYMENT FORM AND SEX G4-LA1
2012
2013
Women
Men
Women
Men
Full-time
608
1 457
625
1445
Part-time
1
0
1
1
587
1 390
602
1362
22
67
24
84
609
1 457
626
1 446
Full-time
459
1 123
469
1 098
Part-time
4
4
4
2
451
1 094
448
1 072
Grupa Azoty S.A.
Open ended Fixed term Total
Grupa Azoty ZAK
Open ended Fixed term
12
33
25
28
463
1 127
473
1 100
Full-time
787
2 493
788
2 504
Part-time
1
3
1
2
750
2 273
747
2 330
38
223
42
176
788
2 496
789
2 506
Full-time
528
1767
554
1841
Part-time
0
0
0
0
525
1 749
522
1 706
Total
Grupa Azoty Puławy*
Open ended Fixed term Total
Grupa Azoty Police
Open ended Fixed term
3
18
32
135
528
1 767
554
1 841
Full-time
2 382
6 840
2 436
6 888
Part-time
6
7
6
5
2 313
6 506
2 319
6 470
75
341
123
423
2 388
6 847
2 442
6 893
Total
Total for the Group
Open ended Fixed term Total
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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Pr acow n i c y OTHER NON - FINANCIAL DATA
EMPLOYEE TURNOVER BY AGE GROUP G4-LA1
2012
2013
<30
30–50
>50
<30
30–50
>50
22
15
4
25
35
10
53.66%
36.6%
9.8%
35.7%
50.0%
14.3%
Grupa Azoty S.A. New hires by age group Percentage of new hires by age group Total number of terminations by age group Percentage of terminations by age group Turnover by age group
1
8
27
1
10
51
2.8%
22.2%
75.0%
1.6%
16.1%
82.3%
1.1%
1.1%
1.5%
1.3%
2.2%
2.9%
Grupa Azoty ZAK New hires by age group Percentage of new hires by age group Total number of terminations by age group Percentage of terminations by age group Turnover by age group
21
14
12
14
17
6
44.7%
29.8%
25.5%
37.8%
45.9%
16.2%
5
15
22
2
21
31
11.9%
35.7%
52.4%
3.7%
38.9%
57.4%
1.6%
1.8%
2.1%
1.0%
2.4%
2.4%
70
38
1
54
47
3
64.2%
34.9%
0.9%
51.9%
45.2%
2.9%
Grupa Azoty Puławy* New hires by age group Percentage of new hires by age group Total number of terminations by age group Percentage of terminations by age group Turnover by age group
20
11
68
6
11
70
20.2%
11.1%
68.7%
6.9%
12.6%
80.5%
2.7%
1.5%
2.1%
1.8%
1.8%
2.2%
Grupa Azoty Police New hires by age group Percentage of new hires by age group Total number of terminations by age group Percentage of terminations by age group Turnover by age group
3
1
0
120
61
6
75.00%
25.00%
0.00%
64.17%
32.62%
3.21%
26
83
93
8
18
61
12.9%
41.1%
46.0%
9.2%
20.7%
70.1%
1.3%
3.7%
4.1%
5.3%
3.3%
2.8%
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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EMPLOYEES OTHER NON - FINANCIAL DATA
TOTAL AND AVERAGE NUMBER OF TRAINING HOURS BY SEX
G4-LA9
2012
2013
Women
Men
Women
Men
Total number of training hours by sex
17 383
25 127
13 758
29 883
Average number of training hours by sex
28.54
17.25
21.98
20.67
Total number of training hours by sex
5 032
6 528
4 824
8 384
Average number of training hours by sex
10.87
5.79
10.20
7.62
16 476
44 614
16 904
41 388
20.91
17.87
21.42
16.52
Total number of training hours by sex
7 738
37 424
15 967
34 396
Average number of training hours by sex
14.66
21.18
28.82
18.68
30 153.00
69 079.00
34 549.00
72 663.00
12.63
10.09
14.15
10.54
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy* Total number of training hours by sex Average number of training hours by sex
Grupa Azoty Police
Total for the Group Total number of training hours by sex Average number of training hours by sex
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
G4-LA9
TOTAL NUMBER OF TRAINING HOURS BY WORKFORCE STRUCTURE
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Police
2012
2013
2012
2013
2012
2013
32
0
104
128
0
48
372
408
608
1 440
4 352
Managing officers
8 394
12 019
1 808
2 736
Specialists
13 120
14 789
2 584
Senior staff
9468
5720
1440
Management Board Senior executives
Grupa Azoty Puławy* 2012
2013
Management Board
688
320
4 745
Top-level management
11 114
10 223
5 624
5 342
Middle-level management
7 178
6 008
2 248
5 342
18 931
Low-level management
8 487
6 355
1024
256
630
Specialists
19 428
19 870
Production staff
14 543
13 713
1 492
1 803
Supervisors
6 324
5 048
696
1 872
2 744
4 733
Operators
3 896
4 377
3 216
2 480
25 268
14 863
Laboratory staff
0
48
736
560
1576
1039
Other bluecollar jobs
904
1 232
368
720
0
0
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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Administration staff
EMPLOYEES OTHER NON - FINANCIAL DATA
COMPOSITION OF SUPERVISORY BODIES BY SEX
G4-LA9
2012
2013
Women
Men
Women
Men
Composition of the Supervisory Board by sex
2
7
2
7
Structure of the Supervisory Board by sex (%)
22%
78%
22%
78%
Composition of the Supervisory Board by sex
0
5
0
5
Structure of the Supervisory Board by sex (%)
0%
100%
0%
100%
Composition of the Supervisory Board by sex
2
4
0
6
Structure of the Supervisory Board by sex (%)
33%
67%
0%
100%
Composition of the Supervisory Board by sex
1
5
1
5
Structure of the Supervisory Board by sex (%)
17%
83%
17%
83%
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy*
Grupa Azoty Police
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
G4-LA9
AVERAGE NUMBER OF TRAINING HOURS BY WORKFORCE STRUCTURE
Grupa Azoty S.A.
Grupa Azoty Police
Grupa Azoty ZAK
2012
2013
2012
2013
2012
2013
6,4
0,0
26,0
32,0
0,0
16,0
Senior executives
16,2
17,7
13,5
34,3
1 450,7
Managing officers
62,2
89,0
22,6
33,4
Specialists
63,1
67,8
11,0
Senior staff
37,1
22,8
12,6
Management Board
Supervisors
Grupa Azoty Puławy* 2012
2013
Management Board
172,0
160,0
1 581,7
Top-level management
112,3
101,2
1 874,7
1 780,7
Middle-level management
52,4
43,2
9,3
1 780,7
6 310,3
Low-level management
31,7
23,6
8,8
85,3
210,0
Specialists
34,7
34,6
Production staff
7,2
6,8
Administration staff
8,1
9,9
50,2
40,1
7,1
20,4
914,7
1 577,7
Operators
5,4
6,1
4,5
3,5
8 422,7
4 954,3
Laboratory staff
0,0
0,2
5,8
4,2
525,3
346,3
Other bluecollar jobs
2,2
3,1
2,2
4,6
0,0
0,0
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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EMPLOYEES OTHER NON - FINANCIAL DATA
G4-LA12
COMPOSITION OF SUPERVISORY BODIES BY AGE GROUP 2012 By age group
2013
<30
30–50
>50
<30
30–50
>50
Composition of the Supervisory Board by age group
0
6
3
0
6
3
Structure of the Supervisory Board by age group (%)
0%
67%
33%
0%
67%
33%
Composition of the Supervisory Board by age group
0
2
3
0
3
2
Structure of the Supervisory Board by age group (%)
0%
40%
60%
0%
60%
40%
Composition of the Supervisory Board by age group
0
2
4
0
3
3
Structure of the Supervisory Board by age group (%)
0%
33%
67%
0%
50%
50%
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy*
Grupa Azoty Police Composition of the Supervisory Board by age group
0
3
3
0
4
2
Structure of the Supervisory Board by age group (%)
0%
50%
50%
0%
67%
33%
* Grupa Azoty Puławy’s data for 2012 are provided for comparison only (in 2012 the company was not part of the Group and was not included in its consolidated financial statements for the 12 months ended December 31st 2012).
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COMMUNITIES AND SOCIETY
EC DMA7-8
SO DMA1-2
G4-SO1
G4-EC7
G4-EC8
G4-26
LOCAL COMMUNITIES
The Grupa Azoty Group aims to establish strong ties with all its stakeholders, particularly local communities. The keystone of mutual trust is open dialogue, which allows the Group companies to identify the best ways to support their local communities and immediate environment. The Grupa Azoty Group engages in local initiatives to foster its communities and help solve problems faced by local residents.
In 2013, the Group received the following main awards in recognition of its support for local communities: marzec Grupa Azoty S.A. was named ’Ambassador of Tarnów’, a title awarded annually to the city’s best representative on the international arena (an individual or institution). An Honorary Diploma of the Józef Dietl Award granted to Grupa Azoty S.A. by the Józef Dietl Self-Government Corporation in recognition of the Company’s achievements, work for the local communities and contribution to regional development.
Until the end of 2013, Grupa Azoty S.A. had in place ’The Azoty Tarnów Group’s Strategy of Support for Local Community in 2011–2013’. In 2013, as the Grupa Azoty Group had been joined by new companies, new corporate documents were drawn up: ■■
’Grupa Azoty Group’s policy on social and sponsorship activities and its operation at the Group’,
■■
’Grupa Azoty Group’s donation policy’,
■■
’Grupa Azoty Group’s scholarship policy’.
Although integration is the source of its strength, the Group is also strongly convinced of the need to preserve the individual character of each of its companies and their local communities. The communities, which have supplied the Group with successive generations of employees, are its cornerstone. This is a management philosophy which perceives the future through tradition, and looks to expand into global markets from firm local roots. The Grupa Azoty Group does not intend or is able to cut off its roots. The local character and corporate citizenship of the Group companies are invaluable assets, forming an integral part of the Grupa Azoty brand. Its openness to dialogue makes for a unique organisational culture. Since 2013, more and more activities have been carried out at the corporate level, many of them by individual companies, which are closest to their local communities and best understand their needs. This approach is reflected in social involvement, principally at the local level, which includes agreements with locally-based organisations active in the fields of culture, sports or education. Companies of the Group support various events in their
123 integrated report | 2013
respective regions. Also, they often provide direct support to schools in their communities. They run scholarship programmes for talented young people, hoping they will join the Grupa Azoty Group and apply their knowledge towards growing the Group’s business. Higher education institutions, particularly those technologyfocused, can also count on our support, as can research institutions whose work contributes to the chemical industry’s development. Our partnership with universities involves joint research projects, work placements, internships and workshops (e.g. in chemistry and materials science). It is a well thought-out, comprehensive approach, promoting initiatives in various areas and on various levels of the chemical sector. Firstly, we support our small and medium-sized business partners; secondly, we look to fill staffing gaps by helping educate future technical and engineering staff, and thirdly, we collaborate with researchers who shape the future of the Polish chemical industry. This comprehensive approach is also manifest in special economic zones and industrial parks, which are established thanks to constructive dialogue and partnership with local governments. The Grupa Azoty Group sees this partnership as a commitment to pursue joint initiatives (e.g. construction and modernisation of local infrastructure), mutual business promotion, support of culture, local sports events, higher education, and academic sports associations, as well as efforts to improve the safety and living standards of local residents.
COMMUNITIES AND SOCIETY Local communities
Activities in this area involve specific investments, benefiting the local community, businesses and the Group itself. The purpose of special economic zones and industrial parks is to make it easier for entrepreneurs and businesses to operate in industrial and post-industrial areas.
The Group companies often supply heat generated by their CHP plants to nearby housing estates, while in turn receiving municipal wastewater for treatment. Grupa Azoty Police and Grupa Azoty Puławy (whose on-site CHP plant supplies heat for the entire town) are good examples of this symbiotic relationship. What should also be noted is that our companies have often been instrumental in the construction of local hospitals, cultural centres or sports facilities.
Industrial parks contain facilities with dedicated sections for use by individual entrepreneurs, which significantly facilitates their operations. Start-up businesses gain access to well-situated land with all necessary utilities and good transport logistics, while those already established on the market have more leeway, not having to contain their impact strictly within their own plots of land. The Grupa Azoty Group is a partner to economic zones and industrial parks in Tarnów (Special Industrial Park), Puławy (Starachowice Special Economic Zone – Puławy Subzone and Puławy Industrial Park) and Kędzierzyn-Koźle (Special Demographic Zone). Yet another of the Group’s many initiatives is the Chemical Technology and Development Centre in Tarnów.
Also important in the context of our positive community impact are local residents we employ and their families, as well as those employed by contractors working for the Group companies. These are thousands of people whose welfare directly depends on the success of the Grupa Azoty Group, not only as a source of remuneration, but also extensive packages of fringe benefits offered to the Group’s employees and often also to their families. Such packages may include funding of children’s trips and summer camps, co-financing of holidays and education, and employee loans. Social benefits are also available to our retired employees (for more information, see ’Employment and additional benefits’).
All large industrial plants, such as those of the Grupa Azoty Group’s companies, are inextricably linked with their local communities, so much so that they often share some infrastructural facilities.
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COMMUNITIES AND SOCIETY
The Grupa Azoty Group is continually seeking to mitigate its negative environmental impact by investing in the latest technologies to reduce noxious emissions into the atmosphere, improve the quality of wastewater and reduce noise pollution (to find out more, see ’Environmental impact’). The monitoring carried out in 2013 revealed no significant breaches of any requirements laid down in the relevant integrated permits (for more information, see ’Compliance’). In a systemic effort to mitigate the consequences of potential industrial accidents, the Group companies develop and implement programmes to prevent major accidents and engage in safety reporting. The individual companies have in-house rescue plans setting out procedures to be followed should an industrial accident occur. The Group companies have in place appropriate organisational and technical safety measures, such as CCTV systems, safeguards, and procedures for prevention and mitigation of industrial accidents. They maintain well-trained fire services capable of leading effective rescue operations, with additional support from chemical rescue teams and other services. Local institutions are provided with special procedures to be followed in the event of an industrial accident. The Grupa Azoty Group’s in-house rescue teams participate in the System of Assistance in Hazardous
G4-26
The impact of large industrial facilities may also be onerous or even dangerous to the local environment and residents.
G4-SO1
SO DMA1-2 G4-SO2
Safe neighbourhood
Materials Transport (SPOT), and are ready to provide assistance in the event of accidents involving transport of hazardous materials, irrespective of whether such materials are transported to the Group or to other parties (for more information, see ’Customer safety’). The Grupa Azoty Group maintains regular contact with local communities, keeping them informed of its day-to-day operations and safety matters. This is achieved by means of various channels, such as bulletins, dedicated programmes and interviews in local radio stations, articles published in local press, and electronic media.
The Mościce 2020 Forum of Organisations – a unique platform for community dialogue A good example of our dialogue with local communities is the Mościce 2020 Forum of Organisations, held regularly as part of an outreach programme for the community of Mościce, a district of Tarnów dating back to 1927, when the factory now belonging to Grupa Azoty S.A. was erected. The Forum has been initiated, organised and coordinated by Grupa Azoty S.A. and Stowarzyszenie KANON with the purpose of integrating the Mościce community, establishing a platform for exchanging opinions and ideas on the future of Mościce and its residents, as well as encouraging people and institutions to contribute to the district’s development.
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Always interested in how it is perceived by society, and particularly by local communities, in 2013 the Grupa Azoty Group commissioned a corporate image survey from an independent opinion polling institute. The survey consisted of in-depth interviews with Grupa Azoty’s key stakeholders, a nationwide omnibus survey, CAPI interviews with opinion leaders, and a survey of opinions in the four provinces in which Grupa Azoty plants are located (CAPI interviews with 100 respondents from each province).
COMMUNITIES AND SOCIETY
SO DMA1-2,
G4-SO1
SPORTS SPONSORSHIP AND PATRONAGE
The Grupa Azoty Group has strong ties with the communities where its plants are located. At the same time, it is a global player with ambitions to establish its presence across all continents. It also sponsors athletes in Poland and abroad, because – breaking down barriers itself – it wants to help others do the same. The Grupa Azoty Group knows that sustained, long-term promotion and advertising through sports can bring positive and lasting effects, both financially and in terms of corporate image. Advertising effectiveness studies have shown that companies which engage extensively in sports marketing obtain a solid advertising value equivalent. As part of its sports marketing activities, the Grupa Azoty Group supports athletes in their training and helps them achieve new successes, while at the same time benefiting from this modern and effective form of brand advertising and promotion. Thanks to the efforts of the Group companies, many local sports clubs have won national acclaim. It is often in such clubs that athletes later representing Poland in international competition start their careers.
G4-EC1
G4-EC7
In 2013, we supported the following sports clubs and associations: ■■
Polish Ski Federation (winter sports),
■■
ZAKSA Kędzierzyn-Koźle (men’s volleyball),
■■
PSPS Chemik Police (women’s volleyball),
■■
MKS Pogoń Szczecin (football),
Funding (PLN) CSR activities for local communities and donations
■■
ŻSSA Unia Tarnów (speedway),
■■
AZS Koszalin (basketball),
■■
KS Wisła Puławy (multi-disclipline club),
■■
KS Azoty Puławy (handball).
World Cup in Wisła and Zakopane, the finals of the Individual Speedway Polish Championship and Individual Speedway Junior Polish Championship, the Visegrád Bicycle Rally, and the ICE Speedway in Sanok.
SIn 2013, the Grupa Azoty Group sponsored the following sportsmen and sportswomen (whom it continues to support): Robert Kubica (rally racing), Piotr Żyła (ski jumping), Edyta Ropek (sport climbing), Klaudia Buczek (sport climbing), and Bartłomiej Mróz (para-badminton). Until December 2013, the Group also sponsored two motorcycle speedway riders from the Unia Tarnów club – Janusz Kołodziej and Maciej Janowski. The Grupa Azoty Group also supports Marek Cieślak, manager of the Unia Tarnów club and of Poland’s national speedway team. The Group also participates in various professional and amateur sports initiatives at the local level. It actively supports many sports clubs and institutions of great importance to the regions where the Group’s core companies are located. These include: ■■ Stowarzyszenie Piłki Ręcznej Tarnów (handball), ■■ ZKS KS Unia Tarnów (football), ■■ UKS Jedynka Tarnów (women’s volleyball), ■■ Ludowy Klub Jeździecki Lewada (horse riding sports).
According to experts, the new Grupa Azoty brand created through consolidation has become one of the most visible brands in Polish sports, particularly in such disciplines as ski jumping, volleyball and motorcycle speedway. Consolidation and synergies have more than just a business dimension, as demonstrated by the fact that Grupa Azoty is widely recognisable as a sports sponsor. It is interesting to note that, according to the same experts, the sports sponsored by the Group are among Polish favourites, surpassed only by football, which − in business terms – means that the Group’s brand enjoys significant media publicity. Ski jumping, volleyball and speedway are, respectively, the 2nd, 3rd and 5th most popular sports in terms of media coverage. Sports marketing surveys commissioned by the Grupa Azoty Group from specialist research centres have shown that the Group provides support, either directly or indirectly, to some of Poland’s most popular sports personalities, including Robert Kubica, Piotr Żyła, Kamil Stoch and Justyna Kowalczyk.
The Grupa Azoty Group has also supported numerous nation-wide and local sporting events. Last year, the Group sponsored the Ski Jumping
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
1 736 843 PLN
769 032 PLN
1 194 902 PLN
800 900 PLN
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Success evokes emotion. Sport evokes emotion. This is why we want the image of Grupa Azoty to be associated with the faces of Polish athletes â&#x20AC;&#x201C; with their strength, ambition and youth. We understand winners, since we ourselves have achieved so much. And we understand those just arriving in line to win.
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COMMUNITIES AND SOCIETY
The Group’s activities are thus systematically reviewed for conformity with the relevant standards in quality, environmental protection, occupational health and safety, and food safety. The results of those compliance checks are presented during management system reviews in the presence of senior executive staff, and analysed to design appropriate remedial measures and fine-tune the management systems.
G4-SO8 G4-SO6
As the industry leader and a wellknown brand both in Poland and Europe, the Grupa Azoty Group is aware of the importance of people’s respect. It also realises that even a relatively minor incident can easily erode public trust.
SO DMA8
SO DMA8
COMPLIANCE
The Grupa Azoty Group companies take care to ensure compliance with legal requirements and other standards, including standards of ethics. Key importance is attached not only to remedial measures, but also to prevention. No significant fines or nonmonetary sanctions were imposed on any of the four Group companies due to their non-compliance with law, or due to anti-competitive or corruptive practices, and none of them provided financial support to any political parties.
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4 Financial information
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Today we compare ourselves and compete with the world's largest market players. Operating globally means following global norms â&#x20AC;&#x201C; this is why we use the highest international standards in our reporting. We take numbers seriously.
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s u mmary con s ol i d ate d fi n a n ci a l state m e n ts fo r 20 1 3
EC DMA1-4 G4-EC1
BASIS OF PREPARATION OF THE summary CONSOLIDATED FINANCIAL STATEMENTS
The financial results presented in this Report are consistent, and should be read in conjunction, with the results presented in the publicly available financial statements for 2013, including in particular the explanatory notes which are an integral part of the annual consolidated financial statements. The Group’s financial results presented here (unlike its performance in other areas, including the social or environmental aspects) reflect not only the performance of the four key companies, but of all entities included in the consolidated financial statements of the Grupa Azoty Group. The figures for 2012 do not include Grupa Azoty Puławy’s data.
The summary consolidated financial statements presented in this Report are only a summary of the information presented in the consolidated financial statements of the Grupa Azoty Group, as approved by the Grupa Azoty Management Board on March 12th 201415 . It is not a complete version of the Group’s financial statements and does not include information sufficient to fully understand its assets, financial standing and financial performance. The summary consolidated financial statements should be read in conjunction with the audited consolidated financial statements prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (’IFRS EU’) and other applicable laws. The summary consolidated financial statements were prepared in accordance with the accounting policies described in Note 2 to the consolidated financial statements of the Group.
15 The consolidated financial statements for the 12 months ended December 31st 2013 prepared in accordance with International Financial Reporting Standards as endorsed by the European Union are available at http://tarnow.grupaazoty.com/pl/ relacje/raportyr.
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
For the period Jan 1 – Dec 31 2013
7 098 735
9 821 023
(6 107 680)
(8 436 709)
Gross profit
991 055
1 384 314
Selling and distribution expenses
(181 916)
(447 750)
Administrative expenses
(390 733)
(706 391)
Other income, including:
49 024
601 010
G4-EC1
For the period Jan 1 – Dec 31 2012
Continuing operations Revenue Cost of sales
-
515 438
Other expenses
Gain on a bargain purchase
(95 698)
(128 558)
Results from operating activities
371 732
702 625
42 741
73 761
Finance income
(38 672)
(56 225)
Net finance income
Finance costs
4 069
17 536
Share of profit of equity-accounted investees
8 549
12 361
Profit before tax
384 350
732 522
Tax expense
(69 049)
(18 443)
315 301
714 079
Net profit from continuing operations
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s u mmary con s ol i d ate d fi n a n ci a l state m e n ts fo r 20 1 3 CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
For the period Jan 1 – Dec 31 2013
-
(554)
315 301
713 525
Remeasurements of defined benefit liability
-
(4 032)
Tax on items that will never be reclassified to profit or loss
-
678
-
(3 354)
423
-
1 594
-
Net change in fair value of available-for-sale financial assets
45 952
(15 751)
Net change in fair value of available-for-sale financial assets reclassified to profit or loss
-
(27 256)
(6 750)
(8 344)
(9 114)
8 239
32 105
(43 112)
32 105
(46 466)
347 406
667 059
294 376
679 593
20 925
33 932
Equity holders of the Parent Company
326 481
635 743
Non-controlling interests
20 925
31 316
Basic (PLN)
4,59
6,95
Diluted (PLN)
4,59
6,95
G4-EC1
For the period Jan 1 – Dec 31 2012
Discontinued operations Net loss from discontinued operations
Profit for the year Other comprehensive income
Items that will never be reclassified to profit or loss
Items that are or may be reclassified to profit or loss Effective portion of changes in fair value of cash flow hedges Net change in fair value of cash flow hedges reclassified to profit or loss
Foreign currency translation differences − foreign operations Tax on items that are or may be reclassified to profit or loss
Other comprehensive income Total profit or loss and other comprehensive income Profit attributable to: Equity holders of the Parent Company Non-controlling interests
Total comprehensive income attributable to:
Earnings per share:
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS
G4-EC1
Consolidated statement of financial position
As at Dec 31 2012* restated
As at Dec 31 2013
2 845 691
5â&#x20AC;Ż791 013
Assets Non-current assets Property, plant and equipment Investment property Intangible assets Goodwill Investments in subordinated entities Available-for-sale financial assets Other financial assets Non-current receivables Deferred tax assets Other non-current assets
28 903
53 374
182 847
516 099
9 124
11 617
80 132
128 944
283 202
23 989
565
53
4 890
3 408
113 366
102 621
3 932
4 462
3 552 652
6â&#x20AC;Ż635 580
839 561
1 170 626
19 079
106 822
4 141
40 558
Trade and other receivables
677 927
1 273 112
Cash and cash equivalents
243 440
713 024
19 894
21 016
Assets held for sale
347
792
Total current assets
1 804 389
3 325 950
Total assets
5 357 041
9 961 530
Total non-current assets Current assets Inventories Other financial assets Current tax assets
Other current assets
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS
G4-EC1
Consolidated statement of financial position
As at Dec 31 2012* restated
As at Dec 31 2013
320 577
495 977
680 688
2 418 270
Equity Share capital Share premium Fair value reserve
37 221
2 346
Translation reserve
(1 279)
(9 623)
2 039 413
2 654 487
294 376
679 593
3 076 620
5 561 457
414 078
709 194
3 490 698
6 270 651
289 979
634 693
139 756
254 613
928
61 821
118 622
119 343
19 996
24 906
12
-
131 800
294 728
17 632
22 513
Total non-current liabilities
718 725
1 412 617
Loans
200 017
604 140
14 155
34 008
19 227
4 903
Trade and other payables
697 317
1 313 547
Provisions
134 437
213 839
16 989
2 936
687
25 921
Retained earnings, including: Profit for the year
Equity attributable to owners of the Parent Company Non-controlling interests Total equity Liabilities Loans Employee benefits Other non-current payables Provisions Government grants Deferred income Deferred tax liabilities Other financial liabilities
Employee benefits Current tax liabilities
Government grants Deferred income Other financial liabilities
64 789
78 968
1 147 618
2 278 262
Total liabilities
1 866 343
3 690 879
Total equity and liabilities
5â&#x20AC;Ż357 041
9 961 530
Total current liabilities
* Financial information restated with respect to CO2 emission rights, as described in point 2.3 of the notes to the consolidated financial statements for the 12 months ended December 31st 2013, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, pp. 26â&#x2C6;&#x2019;28 (http://tarnow.grupaazoty.com/pl/relacje/raportyr).
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CASH FLOWS
For the period Jan 1 – Dec 31 2013
Profit before tax
384 350
732 522
Adjustments for:
284 073
69 419
Depreciation and amortisation
239 592
550 166
G4-EC1
For the period Jan 1 – Dec 31 2012* restated
Cash flows from operating activities
Impairment losses
35 562
49 568
(Profit)/loss from investing activities
26 058
(545 568)
Profit on disposal of financial assets
(5 501)
(12)
Share of profit of equity-accounted investees
(8 549)
(12 361)
Interest, foreign exchange gains or losses Dividends Change in fair value of financial assets at fair value through profit or loss
Cash generated from operating activities before changes in working capital Change in trade and other receivables Change in inventories Change in trade and other payables Change in provisions, prepayments and grants Other adjustments
11 423
38 443
(18 352)
(1 251)
3 840
(9 566)
668 423
801 941
87 136
(42 953)
(90 439)
187 893
(129 684)
95 942
57 887
78 815
(437)
(8 176)
Cash generated from operating activities
592 886
1 113 462
Income taxes paid
(49 106)
(122 965)
Net cash from operating activities
543 780
990 497
13 329
15 627
(397 294)
(680 878)
8 000
28 067
Cash flows from investing activities Proceeds from sale of property, plant and equipment, intangible assets and investment property Acquisition of property, plant and equipment, intangible assets and investment property Dividends received Acquisition of financial assets Acquisition of subsidiaries, net of cash acquired Proceeds from sale of financial assets Cash acquired, net of consideration transferred in acquisition of subsidiaries
(224 688)
(128 499)
-
(230 956)
12 269
43 787
-
273 797
Interest received
1 999
816
Grants received
2 907
497
Loans
(1 190)
(525)
(11 480)
(10 271)
(596 148)
(688 538)
Other proceeds/disbursements
Net cash used in investing activities
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS
G4-EC1
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows from financing activities Disbursements from issue of share capital
-
(11 159)
Dividends paid
(8 884)
(170 813)
Proceeds from loans and borrowings
565 777
1 020 372
-
(311 316)
Acquisition of non-controlling interests Payment of loans and borrowings
(460 099)
(324 710)
Interest paid
(28 717)
(40 470)
Payment of finance lease liabilities
(12 563)
(12 623)
(9 544)
20 170
Other proceeds/disbursements
Net cash from financing activities
45 970
169 451
Net increase/(decrease) in cash and cash equivalents
(6 398)
471 412
Cash and cash equivalents at beginning of the period
244 791
243 440
5 047
(1 828)
243 440
713 024
Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of the period
* Financial information restated with respect to CO2 emission rights, as described in point 2.3 of the notes to the consolidated financial statements for the 12 months ended December 31st 2013, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, pp. 26−28 (http://tarnow.grupaazoty.com/ pl/relacje/raportyr).
G4-EC4
In order to gain a full picture of the relations of the four key companies with society, in addition to data derived directly from the financial statements it is important to highlight the substantial financial support they received from the state in various forms over the last year. [PLNm] Government grants
Grupa Azoty S.A.
Grupa Azoty ZAK
Grupa Azoty Puławy
Grupa Azoty Police
1,179
1,782
4,338
0,886
Tax incentives related to operation within a special economic zone
-
-
24,393
0
Borrowings on preferential terms
-
-
-
99,173
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS SEGMENT RESULTS
Sales of the Grupa Azoty Group’s products in 2013 were driven primarily by the market situation in the Agro Fertilizers, Plastics and Chemicals segments. The largest year-on-year increase in revenue was recorded in the Energy (66.3%), Chemicals (59.6%) and Agro Fertilizers (33.9%) segments.
The smallest increase in revenue (29.9%) was recorded in the Plastics segment. Shares of the individual segments in overall revenue remained relatively unchanged compared with 2012.
REVENUE BY SEGMENTs
PRZYCHODY ZE SPRZEDAŻY WEDŁUG SEGMENTÓW OPERACYJNYCH 6 000 000 5 000 000
4 000 000
2012 3 000 000
2013
2 000 000
1 000 000
Agro Fertilizers
Plastics
Chemicals
Energy
Other Activities
Źródło: Sprawozdanie Zarządu z działalności Grupy Azoty za okres 12 miesięcy kończących się 31 grudnia 2013 r.”, str. 67 (http://tarnow.grupaazoty.com/pl/relacje/raportyr).
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s u mmary CONSOLIDATED FINANCIAL STATEMENTS SEGMENT RESULTS
These results translated directly into each segment’s profitability. The Agro Fertilizers segment’s profit on sales was a source of financing for the other segments’ growth.
External revenue Share [%] Net profit on sales Share [%] EBIT Share [%]
Agro Fertilizers
Plastics
Chemicals
Energy
Other Activities
5 565 074
1 466 548
2 385 331
265 516
138 554
56,7
14,9
24,3
2,7
1,4
391 785
(110 530)
(14 372)
(4 608)
(32 102)
170,2
(48,0)
(6,3)
(2,0)
(13,9)
424 980
(156 115)
(7 432)
(3 366)
(70 880)
227,0
(83,3)
(4,0)
(1,8)
(37,9)
* EBIT: operating profit/(loss) presented in the statement of profit and loss and other comprehensive income, adjusted for gain on bargain purchase.
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INDEPENDENT AUDITORS’ REPORT ON THE SUMMARY CONSOLIDATED FINANCIAL STATEMENT s
Management’s Responsibility for the Summary Consolidated Financial Statements
This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation.
Management of the Parent Entity is responsible for the preparation of the summary consolidated financial statements on the basis described in Note “Basis of preparation of the summary consolidated financial statements”.
To the General Meeting of Grupa Azoty S.A. The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at 31 December 2013, the summary consolidated statement of profit or loss and other comprehensive income and the summary consolidated statement of cash flows for the year then ended, and related notes, are derived from the audited consolidated financial statements of the Group, whose parent entity is Grupa Azoty S.A. with its registered office in Tarnów, ul. Kwiatkowskiego 8 (“the Group”) for the year ended 31 December 2013. We expressed an unmodified audit opinion on those consolidated financial statements in our report dated 12 March 2014. Those consolidated financial statements, and the summary consolidated financial statements, do not reflect the effects of events that occurred subsequent to that date.
Auditor’s Responsibility Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with national standards on auditing issued by the Polish National Council of Certified Auditors and International Standards on Auditing (ISA) 810, Engagements to Report on Summary Financial Statements.
Opinion In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of the Group for the year ended 31 December 2013 are consistent, in all material respects, with those consolidated financial statements, on the basis described in Note “Basis of preparation of the summary consolidated financial statements”.
The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards, as adopted by the European Union and other applicable regulations. Reading the summary consolidated financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of the Group.
On behalf of KPMG Audyt Sp. z o.o. Registration No. 458 ul. Chłodna 51 00-867 Warsaw
July 11th 2014
Marcin Domagała Key Certified Auditor Registration No. 90046 Director
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About the report
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G4-17 G4-6 G4-5
This Report is the first integrated report of the Grupa Azoty Group, covering the four largest Group companies and presenting both their financial performance and their economic, social and environmental impacts16. The release of this integrated Report is accompanied by the publication of regional supplements, discussing the activities of the four largest companies of the Grupa Azoty Group.
G4-3
G4-29
ABOUT THE REPORT
16 The financial information includes the figures of a greater number of entities, presented in the same manner as in the consolidated financial statements.
G4-18
G4-28 G4-30 G4-33
■■
Grupa Azoty S.A. of Tarnów (Parent),
■■
Grupa Azoty Zakłady Azotowe Puławy S.A. of Puławy (Grupa Azoty Puławy),
■■
Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. of Kędzierzyn-Koźle,
■■
Grupa Azoty Zakłady Chemiczne Police of Police (Grupa Azoty Police)..
These are the largest Group companies in terms of revenue and headcount (they generate more than 98% of the Grupa Azoty Group’s revenue). Given the scale and nature of their business, the companies also have the greatest impact on the social and natural environment18.
Report profile This Report has been drawn up in accordance with the ’core’ option of the latest GRI G4 Guidelines, in line with the GRI recommendation for organisations reporting for the first time in accordance with the Guidelines. This Report is an annual report for the financial year 2013, which corresponds with the calendar year. In order to exercise utmost care, we have engaged a third-party expert to assist in the preparation of this Report, and this Report has been verified by an independent auditor (Deloitte Advisory Sp. z o.o.). Financial data sourced from financial statements has been additionally audited by independent auditors (KPMG Audyt Sp. z o.o.).
Out of the total number of several dozen companies comprising the Grupa Azoty Group17, this Report covers the four key companies, i.e.:
In order to define the scope of CSR reporting, an Expert Committee for CSR was appointed, which included employees responsible for different areas of the Group’s business. The efforts of the working groups were additionally supported by external experts. To determine aspects which are relevant to the corporate social responsibility of the Group, an analysis of the CSR reporting of the leading global chemical groups was undertaken. The materiality of the reporting aspects with respect to
17 The full list of companies making up the Grupa Azoty Group and included in the consolidated financial statements can be found at http://tarnow. grupaazoty.com/pl/relacje/raportyr. 18 Apart from the abovementioned companies, the consolidated financial statements also include the financial data of five other companies (subsidiaries of Grupa Azoty): Grupa Azoty ATT Polymers GmbH (Guben, Germany), Grupa Azoty Polskie Konsorcjum Chemiczne Sp. z o.o. (Tarnów), Grupa Azoty KOLTAR Sp. z o.o. (Tarnów), Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. (Grzybów), and Navitrans Sp. z o.o. (Gdynia, an indirectly controlled subsidiary). Moreover, the above subsidiaries have a total of 23 their own subsidiaries.
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the specific sector requirements was determined also based on an analysis of the requirements of the ’Odpowiedzialność i Troska’® (Responsible Care) programme. In addition, to ensure that the results of the Expert Committee’s work are credible, the analysis also took account of the local market conditions in which the Group operates. To this end, apart from the meetings of the working Committee, individual meetings were also held at the plants in Tarnów, Puławy, Police and Kędzierzyn-Koźle. By identifying the existing challenges and the expectations towards the individual Group plants in their operating environment, we were able to propose a scope of the report which not only ensures compliance with the principles of materiality and completeness, but also reflects the stakeholders’ expectations and the context of sustainable development. Based on those analyses, aspects of low, medium and high relevance were identified. The aspects of low relevance, which provide no measurable added value for the organisation and the addressees of this Report, were disregarded. The other indicators were discussed during a series of meetings held at the four key Group companies. Once the indicator definitions have been discussed with the persons responsible for the individual business areas at the Group companies, a process of collecting data and verifying its relevance to the Group was developed. Considering the need to ensure the highest quality of information, i.e. compliance with the requirements of the GRI Guidelines as to information balance, comparability, accuracy, timeliness, clarity and reliability, a software application dedicated to GRI reporting was created. Approximately 70 persons from the various functional areas of the four key Group companies were involved in the process of collecting data.
Ultimately, this Report includes the CSR aspects listed below. Given the horizontal strategic integration of the Group, the impact areas of the Group’s four key entities are practically the same.
G4-19
G4-20
G4-21
ABOUT THE REPORT
RELEVANCE OF INDIVIDUAL CSR ASPECTS TO THE GRUPA AZOTY GROUP
High relevance: ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■
Occupational Health and Safety Biodiversity Environmental protection Emissions Energy Materials Product and Service Labelling Products and Services Non-discrimination Anti-corruption Local Communities Effluents and Waste Transport Water Economic Performance Employment Customer Health and Safety Compliance
Medium relevance: ■■ ■■ ■■ ■■ ■■ ■■ ■■ ■■
Training and Education Marketing Communications Market Presence Indirect Economic Impacts Diversity and Equal Opportunity Freedom of Association and Collective Bargaining Public Policy Compliance (compliance with laws and regulations concerning the provision and use of products and services)
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G4-26 G-24
The Grupa Azoty Group has in place a formal register of stakeholders, which additionally defines the method of assessing the materiality and the ability of the individual stakeholders to affect the Group’s operations.
G4-25
We cannot discuss material aspects and corporate social responsibility as such without identifying the specific groups of stakeholders.
G4-27
ABOUT THE REPORT
Stakeholders can be divided into the following groups: ■■
Employees
■■
Customers
■■
Local communities
■■
Research and development institutions
■■
Suppliers
■■
Shareholders
■■
Public institutions
■■
Trade unions
■■
Local government authorities
■■
State Treasury
■■
Banks and financial institutions.
The form and frequency of dialogue depends on the characteristics of a given group and the expectations and problems material to both parties. At the present moment, such solutions as stakeholder panels are not yet an effective tool in Poland, one of the reasons being the business environment’s limited trust in dialogue as such. Therefore, the dialogue relied for the most part on more traditional tools (e.g. qualitative and quantitative market research, meetings, workshops). The persons responsible for maintaining dialogue with the environment are the heads of the individual functional areas at the Group companies, who also have up-to-date knowledge of the expectations of each stakeholder group. Therefore, at the stage of defining the scope of this Report, it was important to hold meetings directly at the companies and to engage in the process of collecting data several dozen people who have the knowledge of their individual areas of responsibility, including of the expectations and any potential concerns of the environment. Thanks to this, the CSR aspects identified as material are those which are addressed most often in stakeholders’ inquiries.
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G4-32
GRI Co n t en t I n d e x
Indicator
Name
Note
Audit p. 157
Page
General Standard Disclosures Strategy and Analysis
G4-1
Statement from the most senior decision-maker of the organization (such as CEO, chair, or equivalent senior position) about the relevance of sustainability to the organisation and the organisation’s strategy for addressing sustainability
3
G4-2
Description of key impacts, risks, and opportunities.
3, 32
Organizational Profile G4-3
Name of the organization
11, 149, 160
G4-4
Primary brands, products, and services
9, 46
G4-5
Location of the organisation’s headquarters
11, 149, 160
G4-6
Number of countries where the organisation operates, and names of countries where either the organisation has significant operations or that are specifically relevant to the sustainability topics covered in the report
11, 44, 149
G4-7
Nature of ownership and legal form
31
G4-8
Markets served (including geographic breakdown, sectors served, and types of customers and beneficiaries)
46
G4-9
Scale of the organisation
31
G4-10
Total number of employees by employment contract and gender
108
G4-11
Percentage of total employees covered by collective bargaining agreements
108
G4-12
Organisation’s supply chain
9, 44, 65, 79
G4-13
Significant changes during the reporting period regarding the organisation’s size, structure, ownership, or its supply chain
27
G4-14
Whether and how the precautionary approach or principle is addressed by the organisation
73
G4-15
Externally developed economic, environmental and social charters, principles, or other initiatives to which the organisation subscribes or which it endorses
35, 36
G4-16
Memberships of associations (such as industry associations) and national or international advocacy organisations
28
Identified Material Aspects and Boundaries G4-17
Entities included in the organisation’s consolidated financial statements
11, 149
G4-18
Process for defining the report content
149
G4-19
Identified Material Aspects regarding environmental and social impacts
150
G4-20
Materiality of identified environmental and social impacts for individual entities
150
G4-21
Report limitations regarding impacts of material environmental and social aspects, including at entities outside of the organisation
No material limitations
150
G4-22
Effect of any restatements of information provided in previous reports, and the reasons for such restatements (e.g. mergers or acquisitions, change of base years or periods, nature of business, measurement methods)
Organization’s first report
–
G4-23
Significant changes from previous reporting periods in the scope and measurement methods
Organization’s first report
–
Stakeholder Engagement G4-24
List of stakeholder groups engaged by the organisation
151
G4-25
Basis for identification and selection of stakeholders with whom to engage
151
G4-26
Organisation’s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group
57, 63, 65, 123, 125, 151
G4-27
Key topics and concerns that have been raised through stakeholder engagement, and how the organisation has responded to those key topics and concerns, including through its reporting
151
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G RI Co n t en t I n d e x
Report Profile
149
149
149
Contact point
160
G4-32
CSR index
153
G4-33
Organisation’s policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, reporting on the scope and basis of any external assurance provided, as well as the relationship between the organisation and the assurance providers.
149
Governance structure of the organisation, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organisational oversight
34, 35
32, 37
G4-28
Reporting period (such as fiscal or calendar year)
G4-29
Date of most recent previous report (if any)
G4-30
Reporting cycle (such as annual, biennial)
G4-31
01.01.2013-31.12.2013
annual
Governance
G4-34
Ethics and Integrity G4-56
Organisation’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics
Specific Standard Disclosures CATEGORY: ECONOMIC Aspect: Economic Performance DMA
Management approach
135
G4-EC1
Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments
126, 135, 136, 137, 138, 139, 140, 141
G4-EC2
Financial implications and other risks and opportunities for the organisation’s activities due to climate change
91
G4-EC4
Significant financial assistance received from government
141
Aspect: Market Presence DMA
Management approach
113
G4-EC5
Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation
113
Aspect: Indirect Economic Impacts DMA
Management approach
123
G4-EC7
Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, inkind, or pro bono engagement
107, 123, 126,
G4-EC8
Identification and description of significant indirect economic impacts, including the extent of impacts
107, 123
79
80,81
CATEGORY: ENVIRONMENTAL Aspect: Materials DMA
Management approach.
G4-EN1
Materials used by weight or volume
Partially reported
Aspect: Energy DMA
Management approach.
82
G4-EN3
Direct and indirect energy consumption within the organisation
82, 84, 85
G4-EN5
Energy intensity
82
G4-EN6
Reduction of energy consumption
57
Partially reported
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G RI Co n t en t I n d e x
Aspect: Water DMA
Management approach.
86
G4-EN8
Total water abstraction by source
86, 88
G4-EN10
Percentage and total volume of water recycled and reused
86
Aspect: Biodiversity DMA
Management approach.
90
G4-EN11
Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
90
G4-EN12
Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas
90
Aspect: Emissions DMA
Management approach.
91
G4-EN15
Total direct greenhouse gas emissions by weight
91, 95
G4-EN18
Greenhouse gas (GHG) emissions intensity
93
G4-EN19
Reduction of greenhouse gas (GHG) emissions
57, 93
G4-EN21
NOX, SOX, and other significant air emissions by type and weight
94
Aspect: Effluents and Waste DMA
Management approach.
87
G4-EN22
Total water discharge by quality and destination
87, 89
G4-EN23
Total weight of waste by type and disposal method
96, 99
57, 102
57, 102
98
Aspekt: Produkty i usługi DMA
Management approach.
G4-EN27
Extent of impact mitigation of environmental impacts of products and services
G4-EN28
Percentage of products sold and their packaging materials that are reclaimed by category
Partially reported
Aspect: Compliance DMA
Management approach.
103
G4-EN29
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations
103
Aspect: Transport DMA
Management approach.
74, 100
G4-EN30
Significant environmental impacts of transporting products and other goods and materials for the organisation’s operations, and transporting members of the workforce
74, 100
CATEGORY: SOCIAL Labor practices and decent work Aspect: Employment DMA
Management approach.
107
G4-LA1
Total number and rates of new employee hires and employee turnover by age group, gender and region
116, 117
G4-LA2
Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation
107
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G RI Co n t en t I n d e x
Aspect: Occupational Health and Safety DMA
Management approach.
68
G4-LA5
Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs
68
G4-LA6
Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender
69
G4-LA7
Workers with high incidence or high risk of diseases related to their occupation
68
G4-LA8
Health and safety topics covered in formal agreements with trade unions
68
Aspect: Training and Education DMA
Management approach.
111, 112
G4-LA9
Average hours of training per year per employee by gender, and by employee category
111, 118, 119
G4-LA10
Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings
109
G4-LA11
Percentage of employees receiving regular performance and career development reviews, by gender and by employee category
112
Aspect: Diversity and Equal Opportunity DMA
Management approach.
107
G4-LA12
Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity
108, 115, 120
Human Rights Aspect: Non-discrimination DMA
Management approach.
113
G4-HR3
Total number of incidents of discrimination and corrective actions taken
113
Society Aspect: Local Communities DMA
Management approach.
123-126
G4-SO1
Percentage of operations with implemented local community engagement, impact assessments, and development programs
123-126
G4-SO2
Operations with significant actual and potential negative impacts on local communities
125
Aspect: Anti-corruption DMA
Management approach.
37
G4-SO5
Confirmed incidents of corruption and actions taken
37
Aspect: Public Policy DMA
Podjeście zarządcze.
130
G4-SO6
Total value of financial and in-kind political contributions to parties, politicians and similar institutions by country
130
Aspect: Compliance DMA
Management approach.
130
G4-SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
130
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G RI Co n t en t I n d e x
Product responsibility Aspect: Customer Health and Safety DMA
Management approach.
63, 73
G4-PR1
Percentage of significant product and service categories for which health and safety impacts are assessed for improvement
63, 73
G4-PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes
74
Aspect: Product and Service Labelling DMA
Management approach.
65, 75
G4-PR3
Type of product and service information required by the organisation’s procedures for product and service information and labelling, and percentage of significant product and service categories subject to such information requirements
75
G4-PR4
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labelling, by type of outcomes
75
G4-PR5
Results of surveys measuring customer satisfaction
65
Aspect: Marketing Communications DMA
Management approach.
65
G4-PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship, by type of outcomes
65
Aspect: Compliance DMA
Management approach.
75
G4-PR9
Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services
75
156 integrated report | 2013
Independent a ssur ance report pertaining to the non - financial part of the Grupa A zot y Integr ated Report 2013
We have reviewed the non-financial part of the Grupa Azoty Integrated Report 2013 (“Integrated Annual Report”) developed by Grupa Azoty S.A. with the registered address in Tarnów, at ul. Kwiatkowskiego 8 (“Company”), with respect to material aspects identified by the Company and indicators reported on the basis of G4 Sustainability Reporting Guidelines for “Core” level, issued by Global Reporting Initiative (GRI). The assurance works covered the period from 1 January 2013 to 31 December 2013 with relation to quantity and quality of available evidence. The Management Board of the Company is responsible for reliable, correct and fair information and for correct preparation of the documentation. Our task was to issue an independent assurance report based on the Integrated Annual Report. Our procedures did not include assessment of the fairness, correctness and completeness of documents provided by the Company, nor did they constitute an audit of the internal control system implemented therein. Therefore, we do not express an opinion regarding correctness of the system. Our procedures did not constitute an audit of financial statements as defined in the Accounting Act. Therefore, we do not express an opinion concerning the auditor’s Report nor do we make statements regarding the financial statements of the Company as determined in regulations applicable to certified auditors.
Planning and performing our works had the nature of a limited assurance engagement performed in line with ISAE 3000 (Assurance Engagements Other than Audits or Reviews of Historical Financial Information), which requires us to plan and perform the engagement in a manner which allows for limited assurance that the non-financial part of the Integrated Annual Report does not include significant misstatements. The scope and methodology of a review of the Integrated Annual Report significantly differ from those applied during an audit, which is aimed at expressing reasonable assurance. The purpose of the review is not to issue an opinion on correct, true and fair nature of the Integrated Annual Report, and therefore no such opinion has been issued. The procedures followed during the review of the non-financial part of the Integrated Annual Report comprised: ■■
Identifying issues and results significant for the content of the Integrated Annual Report from the viewpoint of the corporate social responsibility strategy followed by the Company and stakeholders' expectations.
■■
Comparing data included in the non-financial part of the Integrated Annual Report to those presented in the Financial Statements of Grupa Azoty for 2013.
■■
Interviewing individuals in charge of the implementation of the corporate social responsibility strategy in the Company and of the preparation of the Integrated Annual Report.
■■
Verifying the information included in the Integrated Annual Report for compliance with the internal documentation of the Company.
■■
Assessing the level of compliance with Sustainable Development Reporting Guidelines and GRI Reporting Framework.
Based on the review we obtained limited assurance that the information concerning identified material aspects and indicators reported by the Company included in the Integrated Annual Report developed by the Grupa Azoty S.A. is free from material misstatements and it is compliant with G4 Sustainability Reporting Guidelines for ‘Core’ level issued by Global Reporting Initiative.
Deloitte Advisory Sp. z o.o. Warsaw, July 10th 2014
157 integrated report | 2013
tab l e of co n t en t s
3 Let ter from the President of the Management Board 7 Introduction 9
Group’s profile
10
Group structure
27
Group’s expansion
31
Scale of the organisation and ownership structure
32
Business strategy and sustainable development
34
Management model and core values
35
Integrated Management Systems
35
Risk management
35
Internal audit
36
Corporate governance
37
Ethical values and principles in the organisation’s management
39 Responsible partner in business 41
Market overview
42
Fertilizer market
42
Plastics
43
Chemicals
43
Power sector
44
Supply chain
46
Market presence
49
Agro Fertilizers
51
Plastics
52
Chemicals
55
Energy
55
Other Activities
57
Innovation and development
60
Grupa Azoty S.A.
60
Grupa Azoty Puławy
61
Grupa Azoty ZAK S.A.
61
Grupa Azoty Police
63 63
Customer relations Sustainable development in agriculture
65
Fostering good relations
67
Safety
68
Health & safety
158 integrated report | 2013
tab l e of co n t en t s
73
Product safety
74
Transport safety
75
Customer safety
76
Environmental impact
79
Feedstocks
82
Energy
86
Water management
90
Biodiversity
91
Air emissions
93
OTHER AIR EMISSIONS
96
Waste management
100
Transport
102
Environmental protection projects
103
Compliance
105 Responsible employer and community member 107
Employees
107
Employment and additional benefits
111
Staff development and training
112
Employee reviews
113
Non-discrimination
123
Communities and society
123
Local communities
125
Safe neighbourhood
126
Sports sponsorship and patronage
130
Compliance
133 financial statements 135
Condensed consolidated financial statements for 2013
142
Segment results
145
OINDEPENDENT AUDITORâ&#x20AC;&#x2122;S OPINION ON THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
149 About the report 152
GRI Content Index
157
Independent assurance report pertaining to the non-financial part of the Grupa Azoty Integrated Report 2013
159 integrated report | 2013
Grupa Azoty S.A. ul. Kwiatkowskiego 8 33-101 Tarnów, Poland NIP: 873-000-68-29 Ticker GPW: ATT KRS: 0000075450 ISIN: PLZATRM00012 tel. +48 14 637 35 31 ir.tarnow@grupaazoty.com
Grupa Azoty Police ul. Kuźnicka 1, 72-010 Police, Poland NIP: 851-02-05-573 Ticker GPW: PCE KRS: 0000015501 ISIN: PLZCPLC00036 tel. +48 91 317 17 17 ir.zchpolice@grupaazoty.com
Grupa Azoty Puławy Al. Tysiąclecia Państwa Polskiego 13 24-110 Puławy, Poland NIP: 716-000-18-22 Ticker GPW: ZAP KRS: 0000011737 ISIN: PLZAPUL00057 tel. +48 81 565 37 15
Grupa Azoty ZAK S.A. ul. Mostowa 30 A, skr. poczt. 163 47-220 Kędzierzyn-Koźle, Poland NIP: 749-00-05-094 KRS: 0000008993 tel. +48 77 481 26 35 zak@grupaazoty.com
integrated report | 2013
G4-31
Report written and compiled by the Corporate Public Relations Office Please send comments and queries to: redakcja@grupaazoty.com To obtain additional information on the report or our CSR activities, please contact: Magdalena Ciepiela | magdalena.ciepiela@grupaazoty.com Grupa Azoty S.A. | ul. Kwiatkowskiego 8 | 33-101 Tarnów, Poland designed and published by © grupa tomami | www.tomami.pl
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