Author: Robert Břešťan, HlidaciPes.org, Czech republic
It is a precious commodity, a significant component of which grows both on the tree and in the field. Chemical treatment produces gun cotton, nitrocellulose, without which war cannot be waged. One of the most important European producers is Synthesia in Czech city of Pardubice. And one of its main customers is right next door – the state-owned Explosia. Since the start of Russia’s war against Ukraine, both companies have been unable to meet the high demand.
Until relatively recently, production at Explosia in Pardubice was balanced between civil and military products. In the last two years, however, the balance has shifted. “The division cannot be said unequivocally, as some market segments overlap, but the ratio can be said to be 75 to 25 in favour of military production,” says Explosia spokesman Martin Vencl.
The essential product of the state enterprise today are propellant cartridges for large-calibre artillery ammunition. These are used to fire a cartridge from the barrel of a cannon. Maximum production is now somewhere in the region of 80 000 units per year, while demand is many times higher. Explosia hopes to increase capacity to 200,000 per year within two to three years.
Explosia received a grant of 250 million CZK from the European Commission to increase its production – both in response to the increase in demand for artillery and rocket ammunition from individual EU member states and in an effort to support the struggling Ukraine. In total, Explosia plans to invest up to two billion CZK to increase its production capacity.
When a factory burns down
In particular, the EU’s ASAP initiative is focused on the supply of artillery ammunition to Ukraine – both for purchase on foreign markets and to increase European production capacity. However, the bottleneck in European production is the shortage of nitrocellulose. It is essential for the production of many types of ammunition; without nitrocellulose, production is impossible.
“For the current production capacity, we have contracted nitrocellulose supplies, and for our future needs we are in intensive negotiations with our current suppliers as well as with other potential suppliers to ensure not only sufficient supplies but also alternative sources,” summarizes Vencl on behalf of Explosia.
There are only about two dozen nitrocellulose producers in the world and their capacities are busy for years to come. There are significant producers in Russia and China, but these are out of the question for European companies given the sanctions and the geopolitical situation. US suppliers are satisfied with their domestic demand, and export almost nothing to Europe.
In Europe, there are – besides the Czech one – only seven producers of nitrocellulose, with factories in France, Serbia, Finland, Switzerland, Bulgaria and Spain; some with small capacities, others producing only for their own use.
According to the Czech Defence and Armaments Industry Association, only three European manufacturers are actually relevant to the market: in France, Serbia and the Czech Republic.
By the way, the nitrocellulose factory in France, near the town of Bergerac, coincidentally burned down shortly after the start of the war in Ukraine, in August 2022… But now production has been restored.
Explosives and ammunition manufacturers, including Explosia, are also trying to discover and test new potential suppliers, especially from the former USSR. “We are testing different nitrocellulose from different countries from which offers are coming in. There are not many at the moment, but we are not resisting the possibilities,” Vencl points out.
The largest manufacturer in Europe
Synthesia in Pardubice remains the largest European producer of nitrocellulose. Its production has a century-long tradition. It now produces about six thousand tonnes a year, and plans call for at least 16% more within two years.
The fact that the neighbouring company Explosia is literally across the yard and that the two companies used to be a single entity does not change the fact that the interest in nitrocellulose is driving its price up. “We have seen significant price increases repeatedly, which we attribute to the market situation rather than to the new management. Otherwise, we continue to cooperate on the basis of signed contracts, and we are negotiating future ones at the level of the boards of both companies,” says Martin Vencl for Explosia.
According to Synthesia’s latest published annual report for 2022, in the year that Russia launched a war against Ukraine, demand jumped rapidly and “the company has adjusted its pricing policy accordingly.” Compared to plan, sales were up 24%, with a 41% year-on-year increase. Of Synthesia’s total 2022 sales of 4.8 billion CZK, nitrocellulose sales exceeded the sum of two billion.
