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Polish chemicals producer Grupa Azoty SA is investing almost 77 million euros ($104.9 million) to boost its plastics capacity with the construction of new plant with a capacity of 80,000 metric tons of nylon 6 per year, to be in service by 2016.

The new unit will be built alongside the group’s existing 45,000 metric tons per year capacity nylon 6 plant at its plastics division complex on a 8.6-acre site at the SEZ in Tarnów, Poland. The project is part of overall group investment of over 110 million euros ($149.9 million) to expand both its fertilizer and plastics segments creating 110 jobs, Azoty officials said in an announcement.

Azoty decided to boost its nylon 6 output in response to growing demand in Poland for plastics from the automotive and other sectors employing structural fibers. In the future, the group plans “to focus more on downstream products by increasing production volumes of higher value-added plastics,” explained new group CEO Witold Szczypiński.

Azoty is responding to demand from small and medium sized firms in Poland for locally sourced nylons and composites. The group aims to become a key regional supplier of these ‘semi products,’ it said. 

There will also be a shift in export markets for the plastics division from Asia to Europe, he added. Global growth for polyamide today stands at around 3.5 percent a year.

Another factor behind Azoty’s investment is the consolidation of its production of the nylon intermediate caprolactam following a sudden change in the global market for the product.

Last year, the group, along with other European producers suffered a substantial loss on its caprolactam production. The Polish group recorded a 17 percent drop in sales of the feedstock product in 2013, which tipped its plastics divison into the red to the tune of 26 million euros ($35.4 million).

In the past, the caprolactam producer has exported the product to China but overcapacity there is reported to have flooded the market, and Azoty is said to have dropped plans to build a plant for the feedstock there.

Grupa Azoty, Europe’s fifth ranked producer of nylon 6, is understood to have a caprolactam production capacity of 170,000 metric tons per year. The plastics division product portfolio also includes polyoxymethylene (POM), nylon 6/6, polypropylene and PBT. It also operates another subsidiary, ATT Polymers in Guben, Germany.