The Russian government lifted the 8.5 per cent export duty on nitrogen fertilisers and NPK effective February 1, 2009. The duty was introduced in April 2008 and was not set to expire until April 30, 2009.
Acron welcomes this move by the government aimed at supporting the fertiliser industry amid the global financial downturn. In 2008, the Group’s Russian companies paid USD 55 million in export duties. Mineral fertiliser prices took a plunge in Q4 2008, contracting the export margin to a critical level. Based on current prices for mineral fertilisers and expected output, the Group expects that the lifted duties will translate into additional USD 40 million in EBITDA in 2009. Acron plans to earmark this cash for capex and loan portfolio restructuring.
Acron Group remains strongly committed to its supply contracts with Russian farmers.