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REDEEMING THE PRODUCTION, DEVELOPING THE NATIONAL CHEMICAL INDUSTRY: THE RESULTS OF THE YEAR OF OPERATION OF ODESSA PORT PLANT

August 4st, 2020 will be one year's anniversary since the restoration of the production process at Odessa Port Plant, which became possible thanks to the signing of an agreement on the processing of supplier raw materials with Agro Gas Trading on July 15th, 2019. In twelve months' time, the OPP regained its flagship position in the Ukrainian chemical market and laid a solid foundation for ensuring long-term development related to the increasing production volumes, modernizing the key assets, improving financial and tax indicators, and providing social stability in the city of Yuzhny.
Since the production was readjusted, the OPP processed 655.6 million cubic meters of gas, which made it possible to produce 796.2 thousand tons of carbamide and 90.3 thousand tons of ammonia. 94.4% of carbamide produced, and 82.7% of ammonia ammonia found their buyers in foreign markets, which indicates that the OPP is competitive again, in the global market, and the confidence of foreign customers is theirs again.
The largest importers of carbamide were India (379.8 thousand tons), Tanzania (75.9 thousand tons), Turkey (74.9 thousand tons), Mexico (60.4 thousand tons), and Senegal (36.7 thousand tons). Ammonia was exported to Greece (30.4 thousand tons), Turkey (28.4 thousand tons), Bulgaria (10.8 thousand tons), Spain (3.5 thousand tons) and Morocco (1.5 thousand tons).
The tendency of the outflow of highly qualified employees to the countries near and far abroad that we had witnessed due to the stagnation of the OPP in previous years was left behind as we resumed the production process. The timely payment of salaries and their regular increase, the last round of which took place in April, during the period of restrictive measures happening in the country due to the spread of COVID-19, became the precondition to reducing social tension in the city of Yuzhny and increasing tax payments to the central and local budgets.
Cooperation with AGT allowed the OPP to create the fundamentals to solve the debt problem, gradually. So, for the year since the restart of production at the OPP, UAH 31.6 million was repaid to Naftogaz Group as previously accumulated debt. This money was generated thanks to the current contract with AGT, which provides for the payment of an additional $ 1 per ton of ammonia produced and $ 1.5 per ton of carbamide.
The financial reserve accumulated by the OPP made it possible to carry out scheduled equipment repairs dated July 2020. The emergency repairs that took place in October 2019 were performed in limited time, and did not directly affect the production process at the OPP.
“For us, it is a great honor, to contribute to the restoration of the Odessa Port Plant and Ukraine's chemical industry in general. This task turned out to be doable, but we see that there is every opportunity for the OPP to increase production volumes and create new, well-paid jobs. I assume that the case of restarting the OPP after eighteen months of downtime can be used to restore the national industry as a whole," said Oleksandr Gorbunenko, managing partner of AGT.
As of July 31st, 2020, Agro Gas Trading company has successfully passed two stages of a new competitive selection to select a supplier of raw materials for the OPP and is preparing for the final round, and after that round, the top management of the plant will decide on the winner. Having the experience, competence and financial capabilities, Agro Gas Trading aims to continue mutually beneficial cooperation with the OPP under better conditions for the plant.
“Odessa Port Plant is the flagship of the Ukrainian chemical industry. It was so, it is so, and will be so. The crisis trends that took place at the OPP are in the past. AGT looks into the future with optimism, having a clear plan for expanding the production activities of the OPP, the implementation of which will allow the plant to guarantee long-term development perspectives," said Vladimir Kolot, partner of AGT.

 

4 August, 2020