Romgaz views the Azomures asset as a distressed asset, as it has recorded losses in recent years, the company's CEO, Razvan Popescu, said on Monday at a specialist conference.
"Romgaz regards the Azomures asset as a distressed asset because, if we look at it, it has posted losses in recent years. If we consider the structural erosion affecting the entire European fertiliser market due to competition from cheap imported fertilisers, it is clear that you cannot be competitive in a market where 70% of the final price of fertiliser is natural gas, while the Middle East, the United States and even China have natural gas at prices five times lower. You cannot be competitive when you face CO2 costs and costs associated with complying with the Net-Zero Industry Act, because with this acquisition Romgaz would have to undertake all the investments needed to bring the plant up to best available technology standards, in line with all European regulations. And we have not even factored in labour costs, which are higher," Popescu explained.
He warned that it is difficult to be competitive in a market where the average age of assets at plants in the Middle East is two to three years.
"To make a comparison, we have also analysed the European market and the average age of fertiliser plants in Europe is around 40 years, whereas in the Middle East the average age of such assets is two to three years. It is very difficult to be competitive in this market, and the way we view this plant is as an acquisition, but also as a commitment to very substantial investment over the next ten years," he said.
Razvan Popescu estimated that the value of the required investments would exceed the potential purchase price.
"The investment costs would be very high, incomparably higher than the possible acquisition price. And this relates only to the obligations arising from the Net Zero Industry Act, which require both the modernisation of ammonia production lines and carbon capture and storage," the Romgaz CEO added.
The head of Romgaz assured that the decision to acquire the Azomures plant would not be a political one and stressed that it would make sense only under certain conditions and at a certain price.
"Yes, under certain conditions and at a certain price. An acquisition is always viewed as the cost of an opportunity. What is more profitable for a company? To sell gas on the free market, or to process it, add value along the value chain and generate higher profit? Any company making such a decision does so on that basis. There will be no other rationale for our decision. It is not a political decision, in any way," he said at the ZF Power Summit 2026: Energise the economy.
Comentează