The plants of the nitrogen holding Ostchem produced 918.5 thousand tons of mineral fertilizers in the first half of 2024, which is 4.3% less than in the same period last year, the holding said in a statement on Monday.
“Uncontrolled imports cause the greatest damage to the chemical industry. Due to the dominance of cheap fertilizers from countries friendly to Russia, production volumes fell by 4.3%,” the release quoted Sergiy Pavlyuchuk, production director of Ostchem’s nitrogen business, as saying.
It also notes that the impact was caused by energy supply restrictions and a shortage of personnel.
“In addition to power outages due to the destruction of the energy infrastructure, there is also a shortage of staff: since the beginning of the full-scale war, almost 20% of employees have been mobilized at the plants, there is a staff shortage of about 15%, and we are forced to retrain staff who are learning new specialties,” Pavlyuchuk said.
According to the release, Cherkasy Azot produced 717.8 thousand tons of fertilizer in the first half of the year and remained Ukraine’s largest producer of mineral fertilizers, while Rivne Azot maintained its production at the same level as last year – 200.7 thousand tons.
High levels of dumped imports resulted in a decline in domestic production of the most popular fertilizers in Ukraine – ammonium nitrate and urea. In particular, the volume of ammonium nitrate production by Ostchem plants decreased by 9% compared to the same period last year – from 398.7 thousand tons to 362.9 thousand tons, the holding noted.
Ostchem also noted uncontrolled imports, which provoked a 10.8% decline in urea production: production fell from 205.9 thousand tons to 183.6 thousand tons.
At the same time, the holding was able to strengthen its position in the urea-ammonia mixture (UAN) market. In the first half of the year, UAN production at Ostchem’s plants increased by 11.4%, from 277.7 thousand tons to 309.2 thousand tons. The holding explains this by the high popularity of this fertilizer and the logistical advantages of Ukrainian producers. To meet the growing demand, new UAN production sites are being set up at Cherkasy Azot (capacity of 1 million tons per year) and Rivne Azot (capacity of 300 thousand tons per year).
According to the holding, the total volume of nitrogen fertilizer imports to Ukraine in 1H2024 amounted to 1.298 million tons. At the same time, imports of ammonium nitrate amounted to 176.6 thousand tons, urea – 311.3 thousand tons, NPK – 108.5 thousand tons, sulfate – 159.8 thousand tons, NP – 77.71 thousand tons, and UAN – 50.8 thousand tons.
Ostchem is the nitrogen holding of Dmitry Firtash’s Group DF, which unites the largest mineral fertilizer producers in Ukraine. Since 2011, it has included Rivne Azot and Cherkasy Azot, as well as Severodonetsk Azot and Stirol, which are out of operation and located in the occupied territories.
Cherkasy Azot PrJSC (Cherkasy, Ukraine) is one of the largest Ukrainian chemical companies. The design production capacity is 962.7 thousand tons per year of ammonia, 970 thousand tons per year of ammonium nitrate, 891.6 thousand tons of urea, and 1 million tons per year of UAN.
Rivne Azot is one of the largest Ukrainian chemical companies in Western Ukraine. On April 12, 2024, Group DF and South Korean Hyundai Engineering signed an agreement to build a chemical hub in Rivne. The project envisages the construction of green ammonia and hydrogen plants based on renewable energy sources; new enterprises and production sites for nitrogen fertilizers and chemical derivatives.
