Ostchem enterprises produce 1.6 million tons of mineral fertilizers over 9M, 2023

In January-September 2023, Ostchem enterprises produced 1.57 million tons of mineral fertilizers.

This is stated in the message of the Group DF group, which includes Ostchem, Ukrainian News Agency reports.

In particular, Cherkasy Azot increased the production of mineral fertilizers by 148% to 1.22 million tons, and Rivneazot - by 7% to 347,300 tons.

The volumes of production of urea, UAM (urea-ammonia mixture) and ammonium nitrate increased the most dynamically.

So, the production of UAM increased by 150%, urea - by 202%, and ammonium nitrate - by 89%.

At the same time, the volume of LAN (lime-ammonium nitrate) production decreased by 72% to 36,900 tons.

"After a rapid fall in production in 2022, our plants are gradually resuming their activities. In 9 months, we produced 92% more products than in the same period last year, when 817,500 tons of mineral fertilizers were produced. At the same time, we have not yet managed to achieve the pre-war level: the utilization of the main capacities of plants during the year did not exceed 70-80%. The reason for the underload is a critical increase in the volume of fertilizer imports that are being brought into Ukraine today," said Serhii Pavliuchuk, head of the Ostchem nitrogen business.

According to him, production plans for 9 months were completed by 100%, and plant capacities were loaded more evenly than in the previous year.

"Our plants worked without failures and completed contracts with Ukrainian farmers on time. In the future, the loading of plants will depend on the demand for mineral fertilizers. We are ready for peak demand in November-December and the start of procurement for spring sowing in 2024," Pavliuchuk said.

According to reports, since the beginning of autumn, the dynamics of mineral fertilizer production has slightly decreased due to a decline in consumer demand.

At the same time, the key factors of influence on the market of mineral fertilizers were:

- high consumer activity in spring and summer, when mineral fertilizers were more affordable, led to saturation of a significant part of consumer demand.

- many farmers were able to stock up on mineral fertilizers in advance;

- decrease in purchasing power of farmers due to suspension of grain agreement and low prices for agricultural products;

- a sharp increase in imports from russian-friendly countries.

"The volume of imports is growing, which hurts the domestic chemical industry. In the third quarter of 2023, the increase in imports of mineral fertilizers amounted to 46.6%. Since the beginning of the year, the total volume of fertilizers imported into Ukraine has reached 1.71 million tons. This indicates that imports exceed domestic production. Fertilizers from russian-friendly countries continue to be imported - repackaged Belarusian fertilizers are imported into Ukraine through Poland and Romania. Imports of urea from Turkmenistan are growing at a critical rate. It is characteristic that often the selling value of fertilizers from post-Soviet countries, taking into account logistics costs, contradicts all market laws. There are reasons to say that they fall on the territory of Ukraine on fake certificates of origin of fertilizers from russia and Belarus," said Oleh Arestarkhov, director of the corporate communications department of Group DF.

It is noted that Ukrainian manufacturers are losing the urea market.

According to the State Enterprise Derzhzovnishinform and the State Customs Service of Ukraine, in 2021 22,700 tons of urea were imported from Turkmenistan, in 2022 - 55,000, and for 9 months of 2023 - 230,000 tons.

"In two years, the volume of urea imported from Turkmenistan has increased almost 12 times. At the same time, the largest Ukrainian chemical enterprises - urea producers idle for the second year. This indicates the quality of industrial policy, which needs to be urgently adjusted to stimulate the growth of production," emphasizes Arestarkhov.

As Ukrainian News Agency earlier reported, in January-June 2023, Ostchem enterprises increased their production of mineral fertilizers by 60.9% to 959,700 tons compared to January-June 2022.

Ostchem Holding unites Group DF nitrogen chemistry enterprises.

Group DF is a diversified international group of companies whose business is represented in 11 countries in Europe and Asia.

The main activities of the group are nitrogen, titanium and gas businesses.

Businessman Dmytro Firtash is the founder and owner of Group DF.