Group DF's Ostchem doubles mineral fertilizer production in Jan-Sept
MOSCOW. Nov 1 (Interfax) - Ostchem, the fertilizer division of Group DF, produced 1.57 million tonnes of mineral fertilizer in the first nine months of 2023, up 90% from the same period of 2022, Ukrainian media reported, citing a press release from Group DF.
Ostchem's plants operated at no more than 70%-80% of capacity due to a surge in fertilizer imports into Ukraine, Ostchem head Sergei Pavlyuchuk said in the press release. However, he said production plans were carried out in full and capacity was utilized more evenly than last year.
Production surged 150% to 1.22 million tonnes at the Cherkasy Azot plant and rose 7% to 347,300 tonnes at Rivneazot.
The strongest production growth was 200% for urea, 150% for UAN and 90% for ammonium nitrate. However, production of LAN fell 72% to 36,200 tonnes.
Ostchem's plants operated without disruption and fulfilled contracts with Ukrainian farmers on time, Pavlyuchuk said. Going forward, capacity utilization will depend on demand for mineral fertilizer, he said, adding that the company is reading for peak demand in November-December and the start of purchases for spring planting in 2024.
Ostchem said one of the main factors that affected Ukraine's mineral fertilizer market was high consumer activity in the spring and summer of 2023, when fertilizer prices were more affordable. However, farmers' purchasing power is declining due to the termination of the Black Sea grain export deal and low prices for agricultural products, while fertilizer imports have risen sharply.
"Imports are growing, which is painfully hitting Ukraine's chemicals industry. Mineral fertilizer imports increased by 46.6% in the third quarter of 2023. Fertilizer imports into Ukraine have totalled 1.71 million tonnes since the start of the year," Group DF's head of corporate communications, Oleg Arestarkhov said in the press release.
Group DF experts believe Ukrainian producers are losing the urea market. Urea imports from Turkmenistan, for example, surged to 230,000 tonnes in the first nine months of 2023 from 55,000 tonnes in 2022 and 22,700 tonnes in 2021, the company said, citing data from DerzhZovnishInform and Ukraine's State Customs Service.
"In two years the amount of urea imported from Turkmenistan has increased by almost 12 times. Meanwhile, Ukraine's largest chemical plants that produce urea are standing idle for the second year. This indicates the quality of industrial policy, which must be corrected without delay to stimulate the growth of production," Arestarkhov said.
Group DF consolidates the assets of Ukrainian businessman Dmitry Firtash in the gas distribution, chemical, titanium and port sectors, as well as agriculture and media. Ostchem, the group's nitrogen division, consolidates the largest mineral fertilizer producers in Ukraine.
