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You're reading: Firtash to invest $2.8 billion in Ukrainian petrochemicals over 5 years

Ukrainian businessman Dmytro Firtash, who controls four of six nitrogen enterprises in the country - Azot (Severodonetsk and Cherkasy), Stirol and Rivneazot - intends to invest $2.8 billion over five years in developing petrochemical production.

"Development in the petrochemical area is very promising. Today, Ukraine has completely lost its position on that market, and as a rule, we buy all small-tonnage chemicals either in Russia or in Germany. And we have a market for this product," Firtash said in an interview with the Day newspaper, published on Thursday.

Chemistry is a strategic direction for his business, and he has no plans to sell assets in that area, he said. His chemistry business-group’s development program spans five-six years and is divided into two areas: nitrogen and petrochemicals.

Firtash has calculated Ukraine’s needs in chemical production. "We can, as a minimum, fight for our market. And the second step, if we succeed, is to organize Ukrainian production sales in Europe," he said.

After Ukrainian nitrogen enterprises consolidated their assets, they managed to increase their loads from 20% of capacity to 110%, and they were able to recapture 30% of the domestic market from Russian competitors, Firtash said.

Firtash has already invested Hr 1 billion (around $125 million) in nitrogen development – specifically in remodeling and reconstruction. "By the end of the year, I will invest another $220-$230 million," he said.

A network of warehouses is currently under construction – chemical supermarkets for selling agricultural chemicals to farmers and peasants, Firtash said.

Firtash is also interested in purchasing Ukraine’s final state-owned nitrogen enterprise – the Odesa port-side chemical plant – if the decision is made to privatize it.

Commenting on his recent purchase of the Nika-Tera specialized maritime port in Mykolaiv, Firtash said that there are plans to increase transshipping at the port from 4-4.5 million tonnes per year to 12-15 million tonnes per year over the next year and a half, to which he will direct $150 million of investment.

"We also plan to expand storage facilities at the port – that will speed up fertilizer exports," Firtash said.

He also discussed an agreement with Russian businessman Arkady Rotenburg, to which he lost a tender on the purchase of the Minudobreniya fertilizer company in Rossosh, on approaches to joint sales.

"This is not the most important thing – whether I bought the plant or not. It is important to me that products that go to the Yuzhny port come from one company. There are a total of three points of shipment for ammonia exports in the whole world, and the Yuzhny port is one of them. We managed to build a sales logic, and we will all benefit from this," Firtash said.

The formation of a general sales and product diversification logic will allow Ukrainian plants and Rossosh enterprises to increase the total volume of exports, as well as to insure them from mutual dumping on external markets, he said.

Firtash is holding talks on purchasing two chemical companies in two countries whose markets are strategically important for his business-group. However, he did not specify whether this was for the government or for enterprises.

Firtash’s other business interests include Crimea Titan (50% less one share), its subsidiaries Irshansk Mining and Processing Plant (Zhytomyr region) and Vilnohorsky Mining and Metallurgical Plant (Dnipropetrovsk region); Crimean Soda Plant (Krasnoperekopsk, Crimea), and Nadra Bank (Kyiv). Outside Ukraine, he owns two plants: Nitrofert in Estonia and TajikAzot in Tajikistan.

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