Uralkali PJSC said on March 17 that it was considering the temporary suspension of some of its employees as it assessed the economic situation in its markets. However, on March 18, Bloomberg reported that Uralkali had decided to postpone any decision on the temporary suspension and would inform on how the situation develops in due course.
Initial reports were that the suspension would be temporary, and staff would get two-thirds of their salary. However, Uralkali did not elaborate on how many of its workers likely would be suspended or how much of its production might be reduced if the employee suspension is implemented.
The potential move by the Russian potash producer, which controls some 20 percent of global potash output, has ratcheted up global potash supply anxieties, which already are running high due to neighboring Belarus being effectively out of the market because of European Union and U.S. sanctions unrelated to the war in Ukraine.
Belarus potash marketer and exporter JSC Belarusian Potash Co. (BPC) was forced to declare force majeure last month after Belarus potash producer Belaruskali could not find alternatives to railing potash to the Lithuanian port of Klaipėda (GM Feb. 18, p. 1). Belarus potash typically accounts for around 15 percent of global potash exports.
Uralkali CEO Vitaly Lauk, commenting on the company’s IFRS FY2021 financial results in a March 4 statement, said at that time the company continues its normal operation, but it was “closely monitoring the current geopolitical situation” (GM March 11, p. 27).
The potash company produced 12.3 million mt of potash last year (GM March 11, p. 34). Sales volumes in 2021 were lower year-over-year, slipping by nearly 6 percent to 12.0 million mt, and export sales volumes were down almost 10 percent, at 9.1 million mt. But sales volumes to the domestic market increased by 11 percent, to 2.9 million mt
“While Uralkali is not under any sanctions, Russia can’t supply farmers in Europe and elsewhere with contracted volumes of fertilizers because a number of foreign logistics companies are sabotaging deliveries,” Russia’s Industry and Trade Ministry said earlier this month, as cited by Bloomberg.
The Industry and Trade Minister on March 10 announced that Russia was to temporarily suspend exports of fertilizers, although the specific products involved and the list of countries to be affected are yet to be identified and listed by the government (GM March 11, p. 1).
Uralkali was controlled by Russian billionaire Dmitry Mazepin via Uralchem JSC, but after coming under European Union (E.U.) sanctions last week due to Russia’s invasion of Ukraine, he has transferred control of the Uralchem group to two of his long-time associates – Dmitry Tatyanin, the company’s new Chairman of the Board of Directors, and new CEO Dmitry Konyaev, according to an Interfax report on March 15.
According to the report, citing the Unified State Register of Legal Entities, Tatyanin, who has been the Legal Director of Uralchem since 2007, now owns 48 percent of Uralchem Fundamental Chemical Co. LLC, and owns JSC Uralchem UCC, a wholly-owned subsidiary of Uralchem Fundamental Chemical Co. LLC.
Konyaev, who became JSC Uralchem UCC CEO after Mazepin resigned the position on March 9, secured a 4 percent interest in Uralchem Fundamental Chemical Co. LLC.
The changes took place on March 14.
Uralchem Fundamental Chemical Co. LLC announced late on March 10 that Mazepin, who previously held a 100 percent stake in the company, had sold a 52 percent controlling stake from his holding, reducing his stake to 48 percent stake.
Konyaev previously chaired the Board of Directors of Uralchem JSC, and Tatyanin was its deputy chairman of the board.