Uralchem: New Taman terminal designed to fully meet Russia's ammonia export needs

Togliattiazot, part of top Russian chemical producer Uralchem, plans to open Russia's first ammonia export terminal on the Kerch Strait ...


Togliattiazot, part of top Russian chemical producer Uralchem, plans to open Russia's first ammonia export terminal on the Kerch Strait in Taman, Krasnodar Region, by the end of the year, which is expected to compensate for the decline in pumping volume through the Togliatti-Odessa pipeline, which was damaged in a sabotage attack. In an interview with TASS at the St. Petersburg International Economic Forum (SPIEF), Uralchem Board Chairman Dimitry Tatyanin spoke about the potential for expanding the terminal and increasing international ammonia supplies, the state of the global and Russian fertilizer markets, the restoration of potash production, humanitarian supplies to Africa, and new markets for Uralchem and Uralkali.


– How would you assess the situation in the Russian fertilizer industry at the end of last year and now? Can we say that the industry has overhauled logistics and that there are no major problems?

– In general, the company has adapted to the challenges of the international freight market. We do not currently see any systemic issues with delivering products to customers.


As for rail logistics, there are no major problems either. Russian Railways operates smoothly and effectively, allowing for fast and reliable deliveries. Moreover, their productive and customer-oriented approach helped us in a particularly challenging situation with the reorganization of the sales system and difficulties in the freight market in the first two to three quarters of 2022, as well as with maintaining the production volume of our companies. At the same time, I believe that Russian Railways should pay special attention to measures for the rapid development of the Eastern corridor, as well as to maximizing shipments for industries with high added value, such as fertilizers, shipments of which are primarily aimed at ensuring global food security, given the rerouting of trade flows from many industries to the East.


– What is the current state of the global fertilizer market?


– The global market is going through a period of low prices. On the one hand, this is not very easy sailing for producers. But, on the other hand, [the current phase] will gradually help restore and boost additional growth in fertilizer demand, allowing prices and demand to increase.


– Speaking of Uralchem and Uralkali, how is business for the companies? How do you see their 2022 results in terms of production and exports? Have these figures grown?


– Everyone had a difficult time in 2022. We were working in an extraordinary situation that no one had ever seen before. Some things were successful, some were not. Despite the challenges, high fertilizer prices in 2022 allowed us to achieve positive financial results. We do not disclose production figures.


– Is Dmitry Mazepin still involved in the strategic planning of Uralchem's operations?

– Dmitry Mazepin is a co-owner with a non-controlling stake in Uralchem, but he is not currently involved in the company's management.


– What new markets have the companies discovered as a result of logistical changes? Which countries are you currently prioritizing in terms of supply?


– We had to restructure our business in terms of markets last year, including shifting some of our sales from Europe to Africa, Brazil and Latin America. We have also greatly expanded our sales in India. At the same time, Russia remains our main market for all types of fertilizers. However, I would like to emphasize that we are always ready to work with partners from all over the world.

– What are your forecasts for 2023? According to the Russian State Statistics Service (Rosstat), potash fertilizer production fell by 31% in the first quarter, while ammonia production dropped by 11%. Could this trend be reversed by the end of the year?

– The decline in Uralkali's potash production happened in the first quarter. We expect further steady growth, with volumes returning to capacity levels in the second half of the year.

As for Uralchem, we expect that nitrogen fertilizer sales will allow us to maintain a 100% production capacity load. The situation with ammonia will change in 2024 following the launch of the Taman terminal.


– What is the current situation with Togliattiazot amid the suspension of pumping through the Togliatti-Odessa pipeline?

– Togliattiazot is part of the Uralchem corporate group, which also includes Uralchem, Uralkali, and other assets. Uralchem Holding P.L.C., the group's holding company, indirectly owns about 94% of the shares in Togliattiazot.

Togliattiazot is facing significant losses due to the closure of the Togliatti-Odessa ammonia pipeline. The company has reached the break-even point. Togliattiazot has seven ammonia units, three of which are currently in operation. Of course, such conditions are completely unacceptable for business.


The Russian section of the ammonia pipeline is operational and in good condition.


– How is the construction of the Taman ammonia terminal progressing? Is it possible to attract partners for this project and expand its capacity beyond 3.5 mln tons of ammonia and 1.5 mln tons of urea announced for 2025?

– The construction of the terminal is an independent project of Togliattiazot. The project is being financed by the company itself. It is planned that the first stage, designed for a cargo turnover of up to 2 mln tons of ammonia per year, will be put into operation at the end of 2023.

At the second stage, which is scheduled to be completed before the end of 2025, the capacity of the new complex will increase to 3.5 mln tons of ammonia and 1.5 mln tons of urea per year. Thus, the design capacity of the future ammonia and fertilizer terminal will reach 5 million tons per year.

At the same time, the construction of a new terminal in Taman and its completion eliminates the problem of the Togliattiazot-Yuzhny ammonia pipeline being blocked. The Black Sea terminal with a transshipment capacity of 3.5 million tons of ammonia will adequately meet the needs of producers.

It is possible to further expand the capacity for mineral fertilizer transshipment. We are considering several ideas for the development of the Taman terminal.


– What is the current financial situation of Uralchem and Uralkali? Is their debt burden manageable?


One of our main responsibilities is to consistently meet our obligations to creditors. The companies are doing everything they can in the current environment to ensure reliable debt servicing. The Group complies with all financial and non-financial covenants, except for specific covenants and a number of delayed payments on Uralkali's syndicated pre-export loans due to various restrictions imposed by foreign nations.

– What is the current status of the Riga terminal?


– The situation with Uralchem's terminals in Latvia remains unchanged. The Latvian registry claims that it is impossible to change the real data on beneficial ownership, and Latvia bases all its decisions on the status of the terminals on outdated information from March 2022. The UAE investor, who acquired Uralchem's shares in the Riga Fertilizer Terminal and Ventamonjaks more than a year ago, was unable to use the assets and demanded that the contract be terminated. As a result, Uralchem now holds 51% and 55% majority stakes in these port facilities, respectively.

The company is not technically sanctioned because the whole world realizes that it is impossible to disrupt the fertilizer supply chain. At the same time, we feel their impact; logistical issues have become more complicated. As a result, these restrictions have a direct impact on people in developing countries whose ability to avoid famine depends directly on these supplies.

– Are you currently looking for long-term supply contracts with China and India? Uralkali signed a contract with India that runs until the end of September; are you negotiating differently this time?


– Uralchem is interested in long-term cooperation with both China and India. Yes, we are indeed interested. When the contract with India was signed, the parties retained the option to adjust the contract price in either direction. That is why the contract was signed [to be valid only] until the end of September.


– The company plans to ship up to 300,000 tons of fertilizer to Africa via Baltic ports. Fertilizers have already been sent to Malawi and Kenya, and talks are underway with Nigeria and Sri Lanka. When do you plan to export fertilizers to Nigeria, and which other countries are next on your list?

– Nigeria will be the next country to receive humanitarian shipment of fertilizers from Uralkali Group. Delivery to Sri Lanka is also possible.

We do not have any deadlines for this initiative, but we are doing everything we can to get our fertilizers to the countries that are already facing famine as soon as possible.


– Dmitry Mazepin said at the end of last year that the company receives about a quarter of its revenues in yuan. What currencies do you currently use for payments, and have you started using rubles?


– We deal in a number of currencies, including rubles. While the share of the dollar has decreased, it is still significant.

 

– Is the company currently looking for new foreign assets? What are the plans for the Angola plant?

– Our largest foreign asset is a stake in PPF (Port of Antonina in Brazil). At the same time, there were other acquisitions in 2022, mainly manufacturing (distribution) companies in Brazil.

We are always ready to work with partners from all over the world. However, this does not mean that mergers and acquisitions represent the only avenue we are willing to pursue in working with overseas markets. We do not have any additional information regarding potential acquisitions at this time.

Regarding the ammonia and urea plant in Angola, the decision was made to terminate the project at the pre-investment stage. No new investment opportunities are currently being considered.


-News Feed

COMMENTS


*

Name

AROUND THE GLOBE,3191,business,74,BY READERS,479,FEATURE,289,GLOBE,16,KERALA,13,Movie,327,s,1,SPECIAL STORY,394,TAMILNADU,3,TOP STORY,3912,TRAVEL,8,
ltr
item
Local Glob: Uralchem: New Taman terminal designed to fully meet Russia's ammonia export needs
Uralchem: New Taman terminal designed to fully meet Russia's ammonia export needs
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX3HXZP-A9gXtU_A5xGVQeauoCBnu05Hm9nO5iNwXg8cpMj9dz9CiRlYYpYrqxL1u9XKtl72rLcfxWIRHj71gFQu9fUG4OYhaV91sHlGVblwWxy5dJ1gmJ9PkfsqfHnYqgRb-rF6d7TuuDavHP9Nb0rF11PTticrFOvkX3lEr90VNtk2xNhprfgNI3ZPAB/s320/export.jpg
https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX3HXZP-A9gXtU_A5xGVQeauoCBnu05Hm9nO5iNwXg8cpMj9dz9CiRlYYpYrqxL1u9XKtl72rLcfxWIRHj71gFQu9fUG4OYhaV91sHlGVblwWxy5dJ1gmJ9PkfsqfHnYqgRb-rF6d7TuuDavHP9Nb0rF11PTticrFOvkX3lEr90VNtk2xNhprfgNI3ZPAB/s72-c/export.jpg
Local Glob
https://www.localglob.com/2023/06/uralchem-new-taman-terminal-designed-to.html
https://www.localglob.com/
http://www.localglob.com/
http://www.localglob.com/2023/06/uralchem-new-taman-terminal-designed-to.html
true
8255692317570297677
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy