OREANDA-NEWS. April 08, 2011. Making this decision, FAS Russia took into account that 85-90% of potassium chloride produced by “Uralkalii” OJSC and “Silvinit” OJSC are exported and only 10-15% consumed on domestic market, as well as the fact that this transaction would strengthen competitive ability of Russian producers on the global market. Therefore, FAS Russia found that the transaction can be allowed in accordance with the antimonopoly law (Article 13 of the Federal Law “On Protection of Competition”), reported the press-centre of FAS Russia.

Although the merger of the largest global producers of potassium chloride will reduce the number of independent economic entities operating on the market, in the medium- and long-term period the transaction will have a considerable positive effect in terms of increasing competitive ability of Russian producers on the world potassium market.

According to FAS Russia, the merger of “Uralkalii” OJSC and “Silvinit” OJSC will create preconditions for preserving competitive ability of Russian producers on the global market by enhancing efficiency of implementation of new investment projects, increasing operational efficiency of the new company after the merger and reducing the costs of production of potassium chloride. The positive economic impact will not only affect producers of potassium chloride but also its consumers and the state.

At the same time, FAS Russia set conduct conditions to “Uralkalii” OJSC aimed at protecting the interests of Russian consumers from possible unlawful actions of the new company in Russia after the merger takes place.

In particular, “Uralkalii” OJSC was requested to develop, approve and place on the official company web-site the Rules for non-discriminatory access (marketing, commercial and merchandising policy, etc.) to buying potassium chloride supplied to various categories of Russian consumers (including agricultural producers, producers of complex fertilizers and industrial customers). The Rules must provide for non-discriminatory conditions of distribution of potassium chloride, the unified pricing procedures for each group of consumers, the unified contract campaign periods for each group of consumers.

“Uralkalii” OJSC executed all conduct conditions set forward by FAS Russia that were aimed at protecting the interests of Russian consumers, including the following:

The company developed, approved and placed on the its official web-site the marketing policy that specifies pricing procedures for various categories of consumers, and the procedures of the contract campaign of “Uralkalii” OJSC with Russian consumers in view of the business practices established on this market;

Developed and approved the corporate rules to ensure compliance with the antimonopoly law;

The company has unilaterally undertaken obligations to satisfy the customers’ needs in potassium chloride on the domestic market, to approve with FAS Russia all changes in sales and marketing policy and to inform FAS Russia in advance about planned increases of potassium chloride prices for Russian producers.

The marketing policy developed by “Uralkalii” OJSC with regard to sale of potassium chloride on the domestic market of the Russian Federation includes preserving the current preferential pricing for producers of agricultural products, complex fertilizers and other Russian customers until 2013. “Uralkalii” OJSC shall be obligated to reserve potassium chloride for Russian customers equal to the amounts bought in the same period of the preceeding year before the expiry of the period of contract campaign specified in the marketing policy.

Therefore, Russian producers will be able to buy potassium chloride under the conditions established before the merger.

“If the company abuses its dominant position on the Russian market it shall face a “turnover fine” from 1 to 15% of the company’s annual turnover”, said the Head of FAS Russia Igor Artemyev.