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Romanian fertilizer producer Azomureș announced the halt of ammonia and fertilizer production for December, just two months after resuming operations due to a set of policies and the lack of government action. The company claims that natural gas costs have risen by nearly 40%, unrelated to the conflict in the Gaza Strip.
“The Romanian state has various support mechanisms for large industries stemming from its own energy resources, a key difference from the EU in general – but unfortunately, it does not utilize them. Consequently, while other gas-producing countries worldwide are building new fertilizer plants, and other EU member states have implemented billion-euro packages in recent years to ensure the continuity of large industries, in Romania, Azomureș – the last company of its kind – struggles to remain operational,” said CEO Josh Zacharias, according to a company statement.
Azomureș further notes that despite ample gas reserves in the region, the European gas market remains significantly more expensive than other industrialized parts of the world (nearly 5 to 10 times higher).
Azomureș blames state authorities for natural gas policies, citing an oversupply of subsidized gas in Romania. Despite a significant surplus of natural gas traded by Transgaz, the additional gas is not made available to the market, as major producers are not allowed to reallocate it to industrial consumers like Azomureș, the statement specifies.
Azomureș also addresses tax fraud on imports and sanctions. In November, a ship carrying 30,000 tons of urea entered the port of Constanța with falsified documents to avoid taxes and sanctions, and by the time authorities discovered the situation, half of the shipment had disappeared.
The suspension of Azomureș’ operations could have a negative impact on both the industry and agriculture in Romania. Josh Zacharias cites cost pressures due to local inflation, anti-competitive practices, and a forthcoming 1% income tax as contributing factors. ‘We calculate a 3% reduction in profitability for Romanian farmers due to the multiplier effect of input purchases, plus the taxed income from crop sales. It’s a tragedy unfolding in slow motion,’ said Josh Zacharias.
Azomureș’ CEO highlights significant price differences in fertilizers in Romania compared to the rest of Europe, while urging authorities to urgently establish a strategic committee to discuss input security for agriculture and the future of the Romanian agricultural industry as a whole.