UralChem eyeing Russian assets of global grain traders - paper
MOSCOW. Dec 8 (Interfax) - Russian fertilizer producer UralChem is interested in acquiring the Russian assets of global grain traders Cargill and Viterra (formerly Glencore Agriculture), national daily Kommersant reported on Wednesday, citing a letter UralChem CEO Dmitry Konyaev sent to President Vladimir Putin on November 21.
He said in the letter that Cargill and Viterra plan to supposedly cease operations in Russia in 2023 and their grain trading business, including exports, has much in common with UralChem's business. The same ports are used for shipping grain and fertilizer and they are shipped in similar vessels, the letter said.
The issue has been tentatively discussed and cleared with the Agriculture Ministry, Konyaev said, asking the president to support the proposal and instruct the government commission for control over foreign investment to grant UralChem the relevant permission.
Putin considered the proposal on November 22 and sent the letter to Prime Minister Mikhail Mishustin, stating that he "agreed." Kommersant reported a government source as saying that the issue is being explored. UralChem declined to comment.
Viterra and Cargill are among the largest exporters of Russian grain. Viterra operates a terminal at the Taman Port with capacity for 5 million tonnes of grain per year together with Demetra Holding, which is 45% owned by state bank VTB , and owns a terminal in Rostov with capacity for 1.5 million tonnes.
Cargill owns a stake in the KSK terminal in Novorossiysk with capacity to handle 6 million tonnes per year, as well as a company that produces feed ingredients and products made from starch and treacle.
Viterra and Cargill denied that they plan to stop working in Russia. In a letter to the Agriculture Ministry dated December 6 that was cited by Kommersant, Cargill said it is working normally, and has no plans to leave or hold negotiations on the sale of assets.
Viterra Rus managing director Nikolai Demyanov said the company is sticking to its previously expressed position regarding the importance of ensuring food security in the world, is continuing to export from Russia and does not intend to sell assets.
The CEO of the Union of Grain Exporters, Educard Zernin also said that the companies do not plan to leave the Russian market, which is confirmed by decent operating results for the first half of the season.
UralChem's letter is not the first attempt to draw Putin's attention to the operations of global agricultural commodity traders in Russia, Kommersant said. At the end of September, the head of state bank VTB, Andrei Kostin proposed to Putin to ban companies from "unfriendly" countries from buying and reselling Russian grain, including for export, as well as from owning handling and storage facilities.
Agriculture Minister Dmitry Patrushev, commenting on this proposal at the beginning of December, said Russia does not intend to "kick out" international grain traders.
Kommersant reported a grain market source as saying that buying the assets of global traders against their will could lead to new problems with grain exports from Russia, just when the situation with vessel charters and payments has started to straighten itself out. Furthermore, negotiations could be suspended on relaunching ammonia transit shipments through the Togliatti-Odessa pipeline and lifting sanctions against Russian Agricultural Bank, the source said.