Uralchem acquires controlling stake in VMF

Moscow-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 percent of voting shares in Voskresensk Mineral Fertilizers OJSC (VMF), Voskresensk, Moscow region, from their shareholders ?Çô a number of foreign and Russian companies. The deal amounted to US$358.6 million. The Russian Federal Antimonopoly Service approved the share purchase on May 30, 2008. VMF is one of the top four Russian producers of phosphate fertilizers. The plant has annual production capacities of 750,000 mt of mono-ammonium phosphate (MAP) and di-ammonium phosphate (DAP), 200,000 mt of ammonia, 320,000 mt of phosphoric acid, and 1,050,000 mt of sulfuric acid. In 2007 VMF produced approximately 320,000 mt of MAP, 260,000 mt of DAP, 175,000 mt of ammonia, 300,000 mt of phosphoric acid, and 900,000 mt of sulfuric acid. Apatite is the key feedstock used in the plant’s production. VMF has a long-term agreement for 865,000 mt of apatite per year up to 2010. Uralchem said the acquisition of a controlling stake in VMF will allow it 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, Uralchem CEO, said the company plans to increase capacities for MAP and DAP as part of the integration of VMF into Uralchem’s production chain. It will do this by utilizing its own phosphate rock and by completing the industrial development of phosphate deposits in the Kirov region. Osipov noted as well that VMF’s sulfuric acid production capacity will be used to manufacture new products such as ammonium sulfate-nitrate (ASN), and will allow the company to revise its plans to construct additional facilities at other sites. “The existing infrastructure and favorable 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 VMF at the volume of up to 130,000 mt per year,” the company said. Osipov also noted the favorable market conditions for basic phosphate fertilizers; as of June 1, prices for DAP and MAP reached levels of US$1,160-1,200/mt FOB Baltics.