OREANDA-NEWS. March 18, 2011. Stirol, the major Ukrainian fertilizer producer affiliated with Ostchem Holding, has increased ammonia nitrate (AN) production by 4x mom in Feb-11 reaching 20 kt.

Millennium Capital considers the news as POSITIVE for the company. Although currently Stirol utilization capacity of AN is just about 30-35%, we expect the company to boost its output further up to 50 kt per month by the end-2011 to reach the pre-crisis level. The growth of output is possible as Ostchem Holding has invested more than UAH 100mn in ammonia and the AN production facilities after the acquisition of Stirol in Sep-10. According to an agreement between the Ukrainian government and the owner of Ostchem (Dmitriy Firtash), most of the AN (250 kt) produced by the Ukrainian plants affiliated with the holding will be sold at the domestic market at a fixed price of UAH 2,500 per ton or ~17% less than the current minimal price on the market. In return, the government will partially write off debts of fertilizer producers to Naftohaz for natural gas consumed, which totaled nearly UAH 2bn.