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Belaruskali reluctant to set up Belarusian-Russian joint trading company

23.05.2014

It is too early to think about setting up a trading company together with Russia, BelTA learned from Director General of OAO Belaruskali Valery Kiriyenko on 22 May. “If the terms are profitable for us and the Russian side, we could work together but for now such terms are not available. It is too early to talk about setting up a common trading company for now. We have yet to stop hurting about what we have survived and then we could talk about a union,” believes the Director General. “I believe that since other players are likely to appear on the market in 2017-2018 and a strategy aimed at primarily racking up the output will prevail, I don't see any need for setting up a common trading company”. Valery Kiriyenko stressed that it is the present-day opinion. The situation may change in the future and then companies will have to think about ways to earn profits. Asked about where the possible trading company may be headquartered, the head of the enterprise stressed that the headquarters may be located where it is profitable, the location is not being discussed right now. “Belarusian Potash Company has proven that it can operate at a profit. I wouldn't like to make the same mistake twice since every manufacturer will primarily cater to its own profits as part of the single trading company,” believes Valery Kiriyenko. BelTA reported earlier that in H2 2013 the management of the Russian company Uralkali announced that the company's products will no longer be sold via the joint trading company Belarusian Potash Company. Uralkali also announced changes of the sale strategy. The changes resulted in negative consequences for all the participants of the potash fertilizers market and worsened the financial performance of potassium chloride manufacturers. Actions of the Russian company resulted in a drastic reduction of the demand for potash fertilizers. Buyers were afraid of losses due to perceivably high prices, thus contributing to delayed demand. After Uralkali severed relations with Belarusian Potash Company, the Russian company set out to conquer the market for itself. The actions resulted in tougher competition between manufacturers, lower prices for potash fertilizers across the globe (down by more than $100 per tonne) and lower sale volumes. OAO Belaruskali is one of the world's largest manufacturers and exporters of potash fertilizers. According to the International Fertilizer Industry Association, Belaruskali accounts for 14% of the world's potash fertilizers production. Belaruskali exports products to over 70 countries. The company comprises four mine groups as well as auxiliary divisions. The state owns 100% of the shares in OAO Belaruskali.

Written by belta.by