19 October 2012 Chemical sector
Ukraine’s Fertilizers Market Projected To Double by 2017Speaking during his visit to Gorlovka-based STIROL concern being part of his Group DF, Mr. Dmitry Firtash, Head of the Board of Directors Group DF, projected that the volume of domestic mineral fertilizers market will double by 2017.
“We are positive that the Ukrainian fertilizers market will double within 5 years to come. Even the most pessimistic outlooks show an at least a 1.7-times growth. We have a lot confidence in these forecasts which is why we invest in our enterprises,” explained Mr. Firtash.
According to the outlooks published by OSTCHEM (a company operating Group DF’s nitrogen chemical productions), by 2017 the nitrogen fertilizers consumption volumes will rise from the current 950 thousand tons up to 2 million tons, phosphates – from 225 up to 460 thousand tons, potassium fertilizers – from 125 up to 270-280 thousand tons.
Dmitry Firtash further noted that fertilizers consumption in Ukraine is growing at a pace higher than in other countries. “Whereas these days Ukraine’s share in the global fertilizers consumption breakdown is below 1 percent. In 2017 it is estimated to reach 1.5 – 1.7 percent,” says Mr. Firtash. The businessman explains the surge in fertilizers consumption by the growth of arable lands area and by more intensive use of fertilizers per hectare. “The next five years are very likely to see the expansion of arable lands for another 7 million hectares: from 18.7 million hectares this year up to 25.4 million hectares in 2017,” argues Mr. Firtash. “We also believe that the volumes of fertilizers applied per hectare will see a 35-40 % rise,” added Mr. Firtash. “It’s not because the market is new, simply our farmers, because of their destitution, have not been applying sufficient volumes,” commented Mr. Firtash.
According to his assessments, soon enough the volumes of fertilizers consumption in Ukraine will reach those recorded in Europe. “Fertilization is a key to efficient agriculture, a key to farmers’ profitability,” stresses Dmitry Firtash. The Head of the Group DF’s Board of Directors is sure that an increase in fertilizers consumption will inevitably bring about a rise in agribusiness efficacy. “The statistics clearly shows that about 79 companies – large agribusinesses – control 5 to 5.4 million hectares of land. These are quite massive companies and obviously, they are struggling for high yields while high yields are directly related to the volumes of applied fertilizers,” concluded Mr. Firtash.
Group DF is a private international group of companies whose interests and assets are concentrated in the energy sector, chemical industry, energy production infrastructure, agriculture and real estate.
OSTCHEM is an asset management company consolidating efforts of Group DF’s nitrogen chemical industries: STIROL Concern (Gorlovka), Severodonetsk Azot, Cherkassy Azot, Rivneazot.
In 2010 – 2011, seeking to enhance Ukraine’s positions in the global fertilizers market, Dmitry Firtash launched a massive process of consolidation of Ukrainian nitrogen fertilizers producers.
In 2011, Group DF invested about $1.15 billion in Ukrainian nitrogen chemical enterprises while the 2012 investment will amount $0.94 billion. The total of capital investments in Group DF’s chemical businesses planned for 2013 is expected to be in the order of $1 – 1.2 billion.