Pannonia Bio update

Pannonia Bio Zrt., Hungary's largest biorefinery, announces that it appointed Pavel Kudriavtcev as its new CEO effective March 2020 and announces the release of a five year economic impact assessment by HETFA Research Institute.

HETFA's economic impact assessment found that in 2019 alone, both directly and indirectly, Pannonia Bio added up to €712 million to Hungary’s GDP, supported up to 2580 jobs, and resulted in up to €200 million in governmental tax receipts. 

The report concludes that Hungary's GDP benefitted by more than €1 for every litre of ethanol produced by Pannonia Bio in 2019.  The report did not try to calculate the economic benefit of the climate progress achieved by Pannonia Bio's various activities.  When used in transport, Pannonia Bio's ethanol contributes 800,000 tonnes per year of CO2 savings.

Pannonia Bio is currently implementing a €150m+ investment plan (2019-2021) covering solar, energy efficiency, biogas, fertilizers and nutrition.

Mr. Kudriavtcev commented "The Pannonia team is to be congratulated that the biorefinery has continued to operate at full capacity during the crisis and that our investment plan continues apace.  We thank the government, in particular the operative team, for its decisive role in removing the logistical and other obstacles that could have interrupted our operations.  I am thrilled to report that we have continued to hire during the crisis.  Also, HETFA's confirmation of Pannonia's scale of importance to the agricultural economy is inspiring as the conclusion that Pannonia added more than 300 HUF to GDP for every litre of ethanol that we produced in 2019.”

Pannonia is currently diverting a significant proportion of its ethanol output for use in the fight against Covid-19.  This equates to a 100ml bottle of disinfectant for each of the EU’s 460 million citizens.

“Since the emergence of Covid-19 we are pleased to have been in a position to donate sanitizer products to local communities, neighbouring industry and to local hospitals, and we will continue to assess other ways to support the government's coordinated fight against Covid-19,” stated Ferenc Hodos, Pannonia's Strategic Director.

Pannonia Bio Zrt., a wholly owned subsidiary of Ireland's ClonBio Group, manufactures sustainable bioproducts from grain. In 2019, it processed over 1.2 million tonnes of locally grown corn into >500 million litres of ethanol, >300,000 tonnes of GMO-free high-protein animal feed and > 10,000 tonnes of corn oil. Product is exported to over 30 countries throughout Europe and further afield.

Looking forward, Mr. Kudriavtcev described expected investment milestones for Pannonia for the rest of 2020.  "This summer we will commission a large advanced biofuels plant.  The quantity would be sufficient to meet in full Hungary's advanced biofuels obligation under the Renewable Energy Directive for 2020 and several subsequent years.  We will also commission a large energy efficiency investment with unique technology that will result in 0.8 PJ of savings, enough to meet more than 10% of Hungary's 2020 energy efficiency goals. And we will own at least 35 MW in operating solar plants in counties where Pannonia is not yet providing rural income and jobs.

Pavel Kudriavtcev (left) next to outgoing CEO Julian Patton at the entrance of Pannonia Bio's plant in Dunafoldvar earlier this year

Performance and outlook:
2019 was a record year for Pannonia Bio Zrt., with an increase of 27.5 per cent in sales to €367 million and a 152 per cent increase in profit before tax to €95.8 million, supported by a strong ethanol price.  
Post year end, weaker transport-driven demand for ethanol as a result of Covid 19 has resulted in softer pricing and this is likely to have a material impact on profitability in 2020.  Beyond Covid 19, the outlook for Pannonia’s increasingly diverse business is positive, as it progresses at pace a €150 million, three year investment programme across a range of existing and new product areas, most notably in solar and in innovative products and materials.

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Note to Editors
Pannonia Bio, a subsidiary of the family-owned Irish agribusiness ClonBio Group Ltd, operates the largest corn processing facility in Central and Eastern Europe, uses state-of-the-art production processes and is a nursery for development of new bio-based technologies.

The recently released Social and Economic Impact Assessment on Pannonia Bio, based on findings by HÉTFA, can be seen here (please click). 

Please click here to view the report from HÉTFA.