Ostchem increases mineral fertilizer production 20% in 2023 to 2.1 million tonnes

MOSCOW. Jan 29 (Interfax) - The Ostchem holding, consisting of Group DF's nitrogen manufacturing enterprises, produced 2.1 million tonnes of mineral fertilizers in 2023, which is 19.5% more than in 2022, Ukrainian media reported citing a Group DF press release.

The Group's Cherkasy-based Azot plant produced 1.56 million tonnes of mineral fertilizers (a 39.6% increase), while Rivneazot produced 528,000 tonnes (a 10.8% decrease).

Ostchem's main products are urea, urea-ammonium mixture (UAN) and ammonium nitrate.

The Group said that production of ammonium nitrate in 2023 increased 60% to 835,900 tonnes, UAN rose 2.3-fold to 572,700 tonnes, and urea rose 2.4-fold to 447,100 tonnes. Production of the traditionally exported fertilizer IAS (calcium ammonium nitrate, produced at Rivneazot) decreased 50% to 102,000 tonnes.

It was previously reported that Ostchem produced about 530,000 tonnes of ammonia in 2022. Data for 2023 was not available. Meanwhile, the holding's 2022 production dropped 66.7% across the board to 1.745 million tonnes.

"The fertilizer market is recovering, but increased imports of nitrogen fertilizers are not giving us the chance to fully load our plants. Despite the difficult situation in the agricultural sector, forced plant shutdowns, high gas prices and abnormally high volumes of imports [fertilizers] to Ukraine at dumping prices, Ostchem started to restore its production volumes in 2023. We fully met farmer demand even during peak load periods," Sergei Pavlyuchuk, production director for Ostchem's nitrogen business, said.

Ostchem doubled production of UAN in 2023; it is the most promising fertilizer in Ukraine. UAN took second place in volume terms, and its share in Ostchem's product portfolio was 27.3%, the report says.

"We are negotiating with global players about developing several industrial sites. Our strategic plans include the construction of new workshops and enterprises. There would be investments in new energy-efficient fertilizer production and the launch of new products such as AdBlue, industrial gases, and petrochemical products," Pavlyuchuk said.

As for the state of the domestic fertilizer market, Group DF says that 2023's main feature was a critical increase in import volumes sold at dumping prices. Compared to 2022, mineral fertilizer shipments to Ukraine from abroad increased 90% to 1.99 million tonnes. Imports of urea increased 3.7-fold during the year to 501,000 tonnes.

"Ukraine is faced with critical dumping. Unfortunately, in 2023 we did not see any tough economic action by the authorities to protect the Ukrainian market and national producers. Imports of fertilizers into the country are growing much faster than domestic production. Domestic production increased about 20% while imports are up almost 100%," Oleg Arestarkhov, head of corporate communications at Group DF said.

Ostchem is a nitrogen holding company within Group DF, which is comprised of the largest producers of mineral fertilizers in Ukraine.

Group DF consolidates assets in the gas distribution, chemical, titanium and port industries, as well as in agriculture and media. The founder and owner of the group is Ukrainian businessman Dmitry Firtash.