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Joint Statement by Acron, Dorogobuzh, MFP, Voskresensk Mineral Fertilisers, and Minudobreniya

The major Russian fertilizer producers Acron and Dorogobuzh (members of the Acron Group), the Mineral Fertilizer Plant of the Kirovo-Chepetsk Chemical Works (MFP) and Voskresensk Mineral Fertilisers (members of the Uralchem Group) and Minudobreniya (town of Rossosh) – express grave concern regarding potash supplies from key potash manufacturers Silvinit and Uralkali.

The Russian Government has recommended on numerous occasions that Silvinit and Uralkali enter into long-term contracts with their customers. Despite all official efforts, no short-term (monthly) potash contracts have been signed so far, let alone long-term arrangements.

In July 2009, despite numerous orders, Russian plants did not receive a single tonne of potash.

This unparalleled situation in long-standing relations between fertiliser producers and mineral monopolies has already forced Acron, Dorogobuzh, Voskresensk Mineral Fertilisers and Minudobreniya (town of Rossosh) to suspend their operations, while MFP has had to cut its output significantly. All companies have incurred major losses for this reason.

Currently Russian potash facilities are running under their design capacity, which, given supply shortages and failure to deliver product to Russian consumers, is a cause for major concern and can hardly be justified.

Our companies have urged the Russian Government to take immediate and decisive measures to compel potash monopolies to fill all orders coming from domestic manufacturers. So far, potash monopolies have completely ignored all resolutions adopted by the cross-sector committee appointed to negotiate issues of raw materials supplies to the mineral fertiliser industry.

Russia is a major potash producer and supplier. Our companies believe that potash suppliers are deliberately creating an artificial shortage in order to manipulate and inflate prices.

Based on the above, Acron, Dorogobuzh, MFP, Voskresensk Mineral Fertilizers, and Minudobreniya (town of Rossosh) intend to ask the Russian Government to consider the possibility of introducing quotas on potash exports from Russia, as this measure will contribute to solving the problem of potash supplies to Russian mineral fertiliser producers.