URALCHEM, OJSC, one of the largest producers of nitrogen and phosphate fertilizers in Russia and the CIS, has closed a deal to acquire 71.72% of voting shares in Voskresensk Mineral Fertilizers OJSC, Voskresensk, Moscow region, from their shareholders – a number of foreign and Russian companies. The deal amounted to US$ 358.6 million. The Russian Federal Antimonopoly Service approved the application to purchase 71.72% of voting shares in Voskresensk Mineral Fertilizers on 30 May, 2008.
Voskresensk Mineral Fertilizers is one of the top four Russian producers of phosphate fertilizers. The plant has annual production capacities of 750 thousand tonnes of mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP), 200 thousand tonnes of ammonia, 320 thousand tonnes of phosphoric acid and 1,050 thousand tonnes of sulphuric acid. In 2007 Voskresensk Mineral Fertilizers produced approximately 320 thousand tonnes of MAP, 260 thousand tonnes of DAP, 175 thousand tonnes of ammonia, 300 thousand tonnes of phosphoric acid and 900 thousand tonnes of sulphuric acid. Apatite is the key feedstock used in the plant’s production. Voskresensk Mineral Fertilizers has a long-term agreement for 865 thousand tonnes of apatite per year up to 2010.
The acquisition of a controlling stake in Voskresensk Mineral Fertilizers will enable URALCHEM to diversify its development and become one of the largest players not only on the Russian nitrogen fertilizer market, but also on the Russian phosphate fertilizer market.
Dmitry Osipov, Chief Executive Officer of URALCHEM, commented that as part of integrating Voskresensk Mineral Fertilizers into URALCHEM’s production chain, the Company intends to increase its capacities of the main phosphate fertilizers, mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP), at Voskresensk Mineral Fertilizer Plant. By 2011, URALCHEM plans to reach the planned capacity of industrial development for Sordinsky plot of Vyatsko-Kamsky phosphate deposit in the Kirov region, and increase the production volume of DAP and MAP at Voskresensk Mineral Fertilizers by utilizing its own phosphorus rock.
Dmitry Osipov emphasized that another advantage in acquiring control of Voskresensk Mineral Fertilizers is its capacities for production of sulphuric acid, which will be used to manufacture such new products as ammonium sulphate-nitrate (ASN) in line with the URALCHEM’s development strategy. The excess capacity for sulphuric acid at Voskresensk Mineral Fertilizers will allow the company to revise its plans to construct additional facilities at its other sites. Osipov also noted the favourable market conditions which have arisen for basic phosphate fertilizers. As of 1 June, 2008 prices for DAP and MAP reached levels of US$ 1160-1200 per tonne (FOB Baltics).
Additionally, by acquiring Voskresensk Mineral Fertilizers, URALCHEM will have at its disposal reserve capacities for the processing of phosphorus raw materials and for the production of MAP and DAP. The existing infrastructure and favourable proximity to target markets provide the opportunity to install innovative thermo-technology production units for phosphoric acid (feedstock for the production of MAP and DAP) at Voskresensk Mineral Fertilizers at the volume of up to 130 thousand tonnes per year. Cement clinker is a by-product in this technology.