Eurochem aims to become major potash market player by 2020

MOSCOW (Reuters) - Russia-focused fertiliser producer Eurochem plans to become a major potash market player by 2020 with a production capacity of 2 million tonnes, its Chief Financial Officer Andrey Ilyin told Reuters.

Swiss-based Eurochem, owned by Russian businessman Andrei Melnichenko, produced the first potash from its new $2 billion plant in Russia in March and plans to launch another plant later this year.

The project may intensify competition among suppliers of the crop nutrient in the region, traditionally dominated by Russian producer Uralkali URKA.MM and Belarusian miner Belaruskali.

Privately-held Eurochem, one of the world’s largest producers of nitrogen-based fertilisers, plans to produce between 1 million and 2 million tonnes of potash in 2019, up from 500,000-600,000 tonnes in 2018, Ilyin said.

According to him, the company is not yet ready to announce its marketing strategy on the potash market and say whether it would like to form trading alliances with other producers as it is currently focused on stable production of high-quality product.

“We should not try to talk in advance publicly about any alliances or marketing strategies until the amount of the product becomes such that it has real significant weight in global trade - more than 2 million tonnes a year. And this will happen not earlier than at the end of next year,” Ilyin added.

Previously, Ilyin said that Eurochem was ready to enter the potash market either independently or as part of a trade alliance with other players.

“Our competitors are very carefully watching how quickly we can bring production from several hundred thousand to several million tonnes. The production trajectory that we show will affect the market’s perception of us as a potash player,” the CFO added.

Reporting by Natalia Shurmina; writing by Polina Devitt; editing by Adrian Croft