14 April 2014
Concern Stirol increased its urea ammonium nitrate sales in March 2014
“The Ukrainian market consumes only 400,000 tons of UAN per year. According to OSTCHEM’s estimates, the UAN market segment will be the most dynamically growing segment of the nitrogen fertilizers market. This fertilizer product has been growing in demand due to its nutritional qualities,” explained Sergiy Pavliuchuk, Chairman of the Board of Concern Stirol. “Moreover, many agribusinesses acquired machinery which allows UAN application. Thus, by 2020 the consumption of this product may increase to 900,000 tons per year. Even now, UAN popularity is so high that during the peak season we sell straight from the conveyor belt, so to speak,” added Mr Pavliuchuk.
According to OSTCHEM’s data, the UAN consumption increased 14 times over the recent 5 years. Only in 2013, this market segment grew by 18% to 449,000 tons, while the nitrogen fertilizers market in general grew only by 10% to 1.43 million tons expressed in 100% nutrients.
In Ukraine, UAN is produced by two OSTCHEM holding’s producers – Concern Stirol and Cherkassy Azot. In 2013, Concern Stirol sold over 100,000 tons of UAN, while Cherkassy Azot sold over 231,000 tons.
OSTCHEM’s capacities allow for annual production of 1.27 million tons of UAN. The holding has been actively investing in development of its UAN production and sales capacities expecting further growth in this segment of the market. OSTCHEM arranges logistics from production units to customers in different regions by purchasing specialised railroad cars and road vehicles for UAN distribution, as well as by expanding storage capacity of its UkrAgro NPK warehouse network.
In September 2013, Concern Stirol temporarily suspended production of mineral fertilizers, including UAN, due to low nitrogen fertilizer prices on the global markets. In February 2014, UAN production was fully restored following growing demand.
In 2013, OSTCHEM invested over UAH 285 million in Concern Stirol. This allowed Concern Stirol to use the temporary suspension of production for carrying out major overhauls of all large-tonnage mineral fertilizer production shops – namely, the United Ammonia Plant, the United Urea Plant, the ammonium nitrate shop, the liquid ammonia warehouse, and the UAN shop. This modernisation of capacities allowed for reduction of production cost, improvement of energy consumption indicators, and reduction of production risks.
UAN is a liquid fertilizer, a mixture of ammonium nitrate and urea solutions in the following ratio: 35.4% of urea, 44.3% of ammonia nitrate, 19.4% of water, 0.5% of ammonia water. The popularity of UAN is explained by its high efficiency, as it is the only fertilizer where nitrogen is available in all three forms, allowing plants to consume it in the most effective way.