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The AMCU gave Firtash 9 months for Ostchem division

05 September 2019

For the first time since 1995, the Committee has applied the requirement of forced separation to Ukrainian enterprises

The Antimonopoly Committee of Ukraine (AMCU) fined NF Trading Ukraine LLC and applied compulsory separation to Ostchem Group with regard to fertilizer producers Azot PJSC, Sievierodonetske Obiednannia Azot PrJSC, Rivneazot PrJSC. Yurii Terentiev, the Chairman of the Committee, reported this. 

"The Committee found that the group of companies consisting of manufacturing plants Azot PJSC, Rivneazot PrJSC, Sievierodonetske Obiednannia Azot PrJSC, and wholesale trading company NF Trading Ukraine LLC abused the monopoly (dominant) position in the primary nitrogen fertilizer market during 2014-2017”, Terentiev explained.

According to him, within the group they systematically resold natural gas at inflated prices and thus increased the cost of production of fertilizers. The committee also believes that the shutdown of plants from March to June 2017 (the time of the spring sowing campaign) was due to “deliberate failure to pay for gas supplies and not even demanding gas from the storage facilities already paid for by the group.”

"At the same time, a prepayment was taken from the buyers for fertilizer production," the Committee's Chairman recalled.

The Committee decided to fine NF Trading Ukraine for UAH 107 million – the maximum possible fine under the applicable laws. And OSTCHEM Group was given 9 months for forced separation. 

"The AMCU believes that if the three major domestic producers of nitrogen fertilizers competed with each other and did not act as one entity – OSTCHEM group, the abuses found would be impossible," Terentiev said.

Ostchem Group consolidates Dmytro Firtash's assets in the production and sale of fertilizers. In Ukraine, the Group includes Azot PJSC, Sievierodonetske Obiednannia Azot PrJSC, Rivneazot PrJSC, the distribution network and Nika-Tera specialized seaport.

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