09 June 2023

OSTCHEM enters ADBLUE market

  • The production of AdBlue is established on the basis of facilities of Cherkasy “Azot”.
  • The Ukrainian manufacturer is able to cover 100% of the needs of domestic market of Ukraine.
  • OSTCHEM has registered its UKRBLUE brand to enter the EU markets.

OSTCHEM Nitrogen Holding has launched the production of AdBlue on the basis of Cherkasy Azot. The new production passed an international audit and yesterday received all  necessary certificates confirming the quality of the product and allowing the use of the AdBlue trademark .

Obtaining international certification opens opportunities for  Ukrainian manufacturer to develop a significant share of  Ukrainian market, as well as to enter the EU markets where, according to OSTCHEM, Ukrainian AdBlue has good prospects.

AdBlue is a special additive for diesel engines used to reduce NO (nitrogen oxide) emissions from cars. The use of the reagent is provided by EURO 6 standards and is aimed at reducing emissions of harmful substances. The rights to the AdBlue trademark are owned by (Verband der Automobilindustrie eV . VDA (Association of Automotive Industry of Germany)), which carefully checks the quality of products both in production using this trademark and in retail chains.

The first stage is the filling of the Ukrainian market with high-quality products of  domestic manufacturer. It is planned to wholesale the reagent “in bulk” directly from the plant, as well as the sale of products through retail networks, ATE and gas stations. Negotiations are already underway with a number of gas stations to install  own AdBlue filling stations . A big consumer of AdBlue will be the agricultural industry which uses modern technology of  new generation. A separate direction will be  sale of products in small containers with a volume of 10 and 20 liters.

At the second stage it is planned to export the product to the nearest EU countries – Lithuania, Latvia, Romania, Hungary and Poland, as well as the countries that are the largest consumers of AdBlue – Germany (consumption level – 2.4 million tons / year), France (2.1 million ) tons /year), Italy (1.3 million tons /year) and Turkey (726 thousand tons /year). According to Group DF estimates  the volume of  European market exceeds 7.2 million tons per year.

The volume of the market in Ukraine in 2022 was 23.4 thousand tons . The market decreased by more than 10,000 tons due to hostilities. The growth potential of  Ukrainian market after introduction of EURO-4, EURO-5, EURO-6 standards is more than 250,000 tons .

AdBlue production project at Cherkasy Azot was announced in February 2022. Already in May 2022 the plant began to produce the first batches of the product. Today Cherkasy “Azot” is able to produce a volume that provides 80% of  Ukrainian market, and if necessary it can increase production to cover all domestic consumption and export to EU markets.

Serhiy PAVLYUCHUK, Head of Nitrogen Business OSTCHEM:

War affected the time of the project launch but the shareholder continued to finance the project. We set up production (today the volume of urea solution production at Cherkasy “Azot” is 30% of the needs of Ukrainian market), built a modern laboratory that ensures quality control. The enterprise has passed all necessary stages of audit and obtaining of international certification. We are able to become the largest national player and gradually displace imports. We plan to become a strong player in  EU markets, where the demand for AdBlue is at high level.

Cherkasy “Azot”  will become the only producer of AdBlue in Ukraine using the “direct method”, that is, the method of producing the reagent from urea float . This one provides very high and consistent quality at a low price. Other manufacturers use the so-called “blending” method, that is, the technology of mixing granular urea with water which increases the risks of impurities in  final product. In order to distinguish its AdBlue reagent in  Ukrainian and European markets OSTCHEM has already registered its own trademark “UKRBLUE”.

Serhiy PAVLYUCHUK, Head of Nitrogen Business OSTCHEM:

We believe that this project will not only allow the Ukrainian manufacturer to become a leader in this market but also will bring Ukraine closer to the introduction of the EURO-6 environmental safety standard which is one of the requirements of the European Union