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Ostchem says chemical plants in Cherkassy, Rivne, Severodonetsk in for closure

Ukraine imports fertilizers from Russia.

Ostchem Group said its chemical plants in Cherkasy, Rivne, Severodonetsk are facing the threat of closure, the head of Ostshem's legal services Ihor Holchenko told a roundtable conference in Gorshenin Institute on 24 March. He said the enterprises are now stopped because of the dominance of cheap Russian fertilizers.

"This is not the first stop of these plants. It's already the third stop since last August, only now it hit the peak of the sowing campaign. We began to sound the alarm in 2014, when the price of gas from a Ukrainian producer began to significantly differ from the price of gas from our Russian competitors. It marked the beginning of dumping import of the most popular product saltpetre to Ukraine," he said.

The state raised the duties on nitrate, the lawyer said, but the adopted law on the abolition of state registration of fertilizers allowed the Russians to import it under the guise of other products.

"We initiated a new investigation into urea and CAS in 2015 and expected that the duties would be introduced in August 2016 and the market, knowing that the duties would be introduced, suspended payments to Russians. However, when the Interdepartmental Commission for International Trade (MCIT) in August 2016 extended the period of consideration, the money immediately went to the Russians, because everyone realized that there would not be duties," said Holchenko.

In December 2016, MCIT announced that the duties will be introduced from March 1, but in February it was postponed until June 1.

As a result, Ostchem plants are stopped, and fertilizers are imported from Russia.

"Russians withdrew all their exports from the Baltic nations to cover the Ukrainian market," Golchenko stressed, "while we stopped despite having collected the prepayment, and could not provide the products."

Lawyer Ostchem reminded that the holding has repeatedly warned the Ministry of Economy about this development of events.

"We say that unless we resume work before the spring campaign, we will cease to exist by the autumn. Cherkasy, Rivne and Severodonetsk will be left without the city-forming enterprises," Holchenko stressed.