Uralchem proposes steps to support fertilizer producers

MOSCOW, Apr 3 (PRIME) -- Dmitry Mazepin, core owner and Chairman of the Board of Directors of Uralchem Group, a large Russian fertilizer producer, has asked Deputy Prime Minister Andrei Belousov to introduce “returnable and payable” measures to support fertilizer producers in light of the spread of coronavirus in a letter, seen by PRIME late on Thursday.

Uralchem sees the ruble devaluation, dynamics of the global commodity markets, falling exports and stop of purchases in the states, which are the major consumers of Russia-made chemicals, as the major risk factors for the industry.

Uralchem suggests direct subsidies to the farm producers for fertilizers purchases and expansion of subsidized exports of fertilizers as domestic prices for gas, the main material for nitrogen fertilizers, are higher than te spot European prices in March and April. 

“The price difference will result in lower profitability of Russia’s fertilizers production and falling exports. One of the possible measures is reduction of transportation prices,” the document read.

Mazepin also suggested creation of a special investment fund on the basis of state development institution VEB.RF to support the industries hit by lower demand.

Systemically important companies should be granted 3–5-year credits at 1–1.5% annually to finance current operations, and the companies will in their turn guarantee retaining of all jobs and implementation of investment plans.

Mazepin also proposed tax vacations for all industries, not only the touristic and aviation companies, and measures to support single-industry cities, including beneficial leasing programs and loans, state investment in construction of infrastructure and investment projects aimed at creation of new production lines.

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