OREANDA-NEWS. April 26, 2011. On Thursday the management of Stirol, the major Ukrainian fertilizer producer controlled by Ostchem Holding, was out with an outline of strategy for 2011. Among the key points were capex and production targets. The former were set to ~UAH 600mn for the full year and of those only UAH 100mn will go towards feedstock use optimization steps. Meanwhile, operational targets featured a full year 2011 ammonia production of  1,274 kt (2.0x to FY10), 922 kt of urea (2.4x) and 640 kt of AN (not produced in FY10).

Millennium Capital: the news is fairly NEUTRAL for the stock. The operational targets agree with our projections except for AN where we envisaged a production of 362 kt vs the management plans of 640 kt. In our view, the management figure is stretched as it implies nearly 90% utilization of AN capacity for the year despite the fact that in 1Q11 the number stood at below 32%. Regarding capex, the amount planned looks rather moderate against the need but this is not surprising given the huge outlays for acquisitions that Firtash incurred recently.