OSTCHEM plants produced 2.1 million tons of mineral fertilizers in 2023

• After decline in production in 2022 Ukrainian chemical plants recover production volumes.

• Production capacity load of OSTCHEM enterprises did not exceed 80% in 2023

• Critical increase in import of mineral fertilizers from countries “friendly” to the russian federation did not allow production to reach pre-war level.

Plants of OSTCHEM nitrogen holding produced 2.1 million tons of mineral fertilizers in 2023. It is 19.51% more than in 2022 (1.75 million tons). Cherkasy “Azot” produced 1.56 million tons of mineral fertilizers (+ 39.63%), and “RovnoAzot” – 528 thousand tons. (-10.81%).

 

The key fertilizers produced by OSTCHEM enterprises were: urea, UAN and ammonium nitrate.

 

During the year 835.9 thousand tons of ammonium nitrate were produced (+60.47% compared to the previous year), UAN – 572.7 thousand tons (+130%), urea – 447.1 thousand tons (+14 5 %). Production of traditionally exported fertilizer LAN (produced at “Rovnoazot” ) decreased by half to 102 thousand tons.

 

“The fertilizer market is recovering but the increased import of nitrogen fertilizers does not allow us to fully load the plants. Despite the difficult situation in agricultural sector, forced shutdowns of factories due to hostilities, still high gas prices and abnormally high volumes of import to Ukraine at dumping prices OSTCHEM began to restore production volumes in 2023. We fully met farmers’ demands even during periods of peak loads,” – noted Serhiy PAVLYUCHUK, Production Director of OSTCHEM Nitrogen Business.

 

In 2023 OSTCHEM holding increased production volumes of UAN- the most promising fertilizer in Ukraine. UAN took the second place in terms of production volume and its share in OSTCHEM product portfolio was 27.3%.

 

“ It’s no secret that we negotiate with global players about the development of several industrial sites. Our strategic plans include the construction of new workshops and enterprises. We mean investments into new energy-efficient fertilizer production and  launch of new products such as AdBlue , industrial gases, petrochemical products”, – adds Mr. Pavlyuchuk.

 

The important feature of the previous year is the critical increase in volume of import brought at dumping prices. Compared to 2022 import of mineral fertilizers to Ukraine increased by 1.9 times, reaching 1.99 million tons. For example, import of urea over the year increased by 3.7 times, amounting to 501 thousand tons.

 

“A colossal flow of cheap Belarusian and russian fertilizers enters Ukraine through two channels: the first one is from countries of the former USSR friendly to the aggressor. The second new channel is re-export of Belarusian and russian fertilizers from the EU countries. According to Eurostat the total volume of import of nitrogen fertilizers into the EU increased by 34% in 2022-2023, while the russian federation accounts for about a third of this import. A significant part of these fertilizers despite sanctions and existing embargo ends up in Ukraine, slowly “killing” Ukrainian producers and jobs of Ukrainians,” – comments Oleg ARESTARKHOV, Head of Corporate Communications of Group DF.

 

In his opinion, behind the new trend there is not only the desire of the russian federation to expand sales markets, but also there is a strategic plan: to make the EU countries and Ukraine somewhat dependent on its fertilizers.

 

Unable to compete with cheap import many EU enterprises are shut down and Ukrainian chemical industry enterprises  such as Odesa Port Plant and Sumykhimprom are also idle.

 

“The US and EU countries have already developed measures to “reduce dependence” on fertilizers, grain and other food products from the russian federation. There is a formal embargo on the import of russian and Belarusian fertilizers in Ukraine. Nevertheless, fertilizers from these countries and from the countries that buy cheap gas from the russian federation continue to be supplied. As a result our market is flooded with cheap import and Ukraine has faced with critical dumping. Unfortunately in 2023 we did not see clear, tough economic actions by the authorities to protect Ukrainian market and national producers. Fertilizers import into the country is growing much faster than domestic production. Domestic production has increased by about 20%, and import by almost 100%. Ukraine needs to learn to better protect its interests. It is the main conclusion of the year for Ukrainian chemistry and for Ukrainian Government,” –summarized Arestarkhov.