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Economy 2020-09-15T04:04:34+03:00
Ukrainian news
Ostchem Retail Signs Agreement With 6 Banks On Targeted Lending To Agrarians

Ostchem Retail Signs Agreement With 6 Banks On Targeted Lending To Agrarians

Group DF, OSTCHEM, nitrogen fertilizers, Ostchem Retail, Ostchem holding, lending

Ostchem Retail, a retail division of the Ostchem holding, which, in turn, is part of the Group DF nitrogen business, entered into an agreement for the 2020/2021 marketing year with six Ukrainian banks on targeted lending for the purchase of nitrogen fertilizers by agrarians.

The company has said this in a statement, Ukrainian News Agency reports.

Relevant agreements have been signed with ProCredit Bank, First Ukrainian International Bank (FUIB), Alliance Bank, Agroprosperis Bank, PrivatBank, MTB Bank, which provide credit support to agricultural producers throughout Ukraine.

Negotiations with another large bank are in their final stages.

Authorized partner banks finance farmers who buy nitrogen fertilizers from chemical manufacturing plants belonging to Ostchem: Cherkasy Azot, Severodonetsk Azot Association, Rivneazot.

The lending program works as follows: an authorized bank issues a loan for the purchase of nitrogen mineral fertilizers on favorable terms, while Ostchem Retail, as a representative of the manufacturer, ensures timely shipment of products to the agrarian and subsidizes the interest rate on the loan to the buyer.

Loans can be provided in hryvnia, euros and dollars, both without collateral, and against the collateral of agricultural financial receipts or under classic credit security.

Moreover, loan terms vary from 2 to 18 months.

"This loan provides financial support to the farmer during the main agricultural cycle - he can buy fertilizers in the low season, apply them on time, reap the harvest, wait for the best price for the crop, sell it when it is profitable for him, and repay the loan. In this triangle "Bank - producer - farmer" wins everyone. For the bank it is an opportunity to offer the market new interesting tools, while the farmer gets the opportunity to untie two events: the sale of crops and the purchase of fertilizers, buying them in the low season, when the price is much lower," noted Yevhen Khurylenko, head of the Ostchem Retail.

According to him, the growth rate of the market for targeted loans for the purchase of mineral fertilizers is almost twice as high as in general loans for the agro-industrial complex.

“We have actually changed the paradigm of sales of mineral fertilizers in the agricultural market. This has yielded results - for the first year of operation, our sales exceeded UAH 1 billion,” he said.

Ostchem Retail works directly with the end consumer.

For the first time, small and medium-sized farmers with cultivated areas from 200 to 15,000 hectares have direct access to the products of manufacturing plants and access to cheap financing.

Ostchem Retail is a retail division of the Ostchem holding, part of the Group DF nitrogen business.

Ostchem Retail was established in 2019 to ensure sales and direct supplies of mineral fertilizers from Ostchem holding plants to Ukrainian agrarians.

Ostchem Retail was the first to introduce alternative sales tools in the nitrogen fertilizer market.

Fertilizers are purchased through financing from partner banks.

The company guarantees the farmers favorable prices for nitrogen fertilizers from such producers as Azot (Cherkasy), Rivneazot, and Severodonetsk Azot Association.

As Ukrainian News Agency earlier reported, Group DF is a diversified international group of companies whose business is represented in 11 countries of Europe and Asia.

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

In particular, Group DF is one of the largest investors in the chemical and energy industries in Eastern Europe.

The total number of employees at the Group DF enterprises exceeds 100,000 people.

The founder and owner of Group DF is Ukrainian businessman Dmitry Firtash.


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