Severodonetsk Azot cuts jobs to stay afloat

In January-June 2020, Severodonetsk Azot (part of Group DF, Ukraine) increased the production of nitrogen fertilizers by more than 3 times to 330.78 thousand tons. Of their total volume, the enterprise produced 192.07 thousand tons of ammonium nitrate, 122.58 thousand tons of carbamide, 12.83 thousand tons of the carbamide-ammonium mixture.

“The growth in fertilizer output in the first half of the year is the result of the restoration of the full production cycle at the enterprise. However, the enterprise is currently loaded by only 30%, and we cannot expect the same production dynamics in the future, as the state decided not to impose restrictions on the import of nitrogen fertilizers to Ukraine,” said Leonid Bugaev, Chairman of the Board of Severodonetsk Azot.

“Due to the dominance of Russian imports, the enterprise will be forced to reduce the gained pace — we have to urgently revise the production plans. Instead of recruiting staff, we have to cut jobs by 30%.”

According to Leonid Bugaev’s statement, Ukrainian producers cannot compete in price with Russian fertilizers, because in Russia, the price of the main raw material — natural gas — is almost 2.5 times lower than in Ukraine. Despite the effect of an embargo on the import of fertilizers directly from Russia since spring 2019, nitrogen fertilizers are imported to Ukraine through other countries, namely Belarus, Georgia, Poland and Latvia.