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4 March, 2011

The Nitrogen Baron

Ukrainian fuel magnate Dmytro Firtash adds to his nitrogen empire
Dmytro Firtash has purchased another powerful chemical enterprise, the Cherkasy-based Azot plant, from the Kharkiv oligarch Oleksandr Yaroslavsky. Azot has 40 production units and churns out nearly two million tons of mineral fertilizers a year, or about 25% of the Ukrainian market. The price of the deal has not been released officially, but Mr. Yaroslavsky had earlier been reportedly asking USD 800 million. Whatever the deal with Firtash, the sale makes it appear that Yaroslavsky happy with the outcome. 
This means Firtash and his business associates have concentrated the production of 100% of saltpeter, 80% of carbamide, and 75% of ammonia in Ukraine in their hands. The monopoly on the fertilizer market is an excellent springboard for further expansion into the agroindustrial sector. Firtash controls four of the six Ukrainian plants that produce nitrogen fertilizers (see more on this in  The Ukrainian Week, Is. 6, 2001). The two other enterprises are DniproAZOT (owned by Ihor Kolomoisky) and the Odesa Portside Plant (which so far remains state property).
The monopolization of the chemical industry in Ukraine has a geopolitical implication — experts do not rule out that Mr. Firtash’s assets will be merged with Russian counterpats, while informed open sources even indicate the proportion will be 25:75. The reader will remember that in 2009, Gazprom’s SIBUR expressed interest in buying the Odesa Portside Plant from the state. By bringing the chemical industry and hence the fertilizer market under its control, Russian capital will easily be able to monopolize the Ukrainian agricultural sector as well.

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