This report covers the market developments in FY 2013, Q1/2014 and the data available as of June 2014.

The Polish chemical industry maintained sluggish growth pace across the most important segments in 2013. Aggregated revenues for whole chemical industry increased by 3.8% y/y last year, easing from the 5.6% y/y advance in 2012 and 10.5% y/y increase in 2011. Such performance is not surprising, considering that the export-oriented automotive industry, which is the major domestic consumer for engineering plastics, rubber and polyurethanes, contracted by approximately 4.5% y/y in 2013, according to market estimates.

The production of chemicals varied across the major segments in 2013 and Q1/2014. In 2013, all product categories except chemical fibres and fertilizers increased on an annual basis in volume terms, with the highest growth rate recorded by polyvinyl chloride, soap and tyres. In Q1/2014, production of nitrogenous and phosphatic fertilizers returned in the positive area, but the annua increase is not particularly relevant, since in Q1 agriculture activity, the destination for fertilizers, is seasonally at low level.

Exports of chemicals recorded among the highest y/y growth dynamics of industrial goods in 2013. The value of exports of chemicals increased by 8.2% y/y to over EUR 21.7bn last year. Exports of chemical products are expected to continue growing in the coming years. According to QuERI forecasts, exports of chemical products are projected to increase from USD 18.6bn in 2014 to USD 29.5bn in 2017.

Key points:
• Chemical industry grows at sluggish pace in 2013, faces challenging year ahead
• Chemical exports record high y/y growth dynamics in 2013
• Production of chemicals posts mixed y/y performance in 2013, Q1/2014
• Output of rubber products resumes upward path in 2013, continues rising y/y in Q1/2014
• Synthos, Grupa Azoty, Ciech secure extension for special economic zone to accommodate EUR 286mn investments
• Russian Acron increases stake in Grupa Azoty, Polish Treasury reinforces intention to keep its 33% share in chemical firm