OREANDA-NEWS. July 18, 2012. The statement circulated by PhosAgro regarding Acron Group’s indebtedness to Apatit exceeding RUB 1.3 billion, is not true.

Advance payments for apatite concentrate supplies have been effected in full under the existing agreement at the rate of RUB 3,671.36 per tonne. Moreover, at all times Apatit has advance payments from Dorogobuzh and Acron in the amount sufficient for two and four apatite concentrate shipments, respectively. Acron Group companies have always been bona fide payers and discharged their obligations in full.

On June 15, the Moscow Arbitrazh Court granted the injunction prohibiting Apatit to reduce volume and/or suspend apatite concentrate supplies to Acron until examining merits of Acron’s pending claim to Apatit. Currently, Acron receives apatite concentrate in the amount sufficient for maintaining operations and replenishing stocks. Dorogobuzh has not received apatite concentrate since June 5, 2012, and has to keep its NPK operations idle.

We view PhosAgro’s behavior as abusing its monopoly power at the apatite concentrate market and trying to impose on consumers its own raw material payment terms in violation of the existing agreement. Obviously, by doing so, PhosAgro is seeking to push one of its main competitors out of the fertiliser market. Acron Group is a major supplier of complex fertilisers to Russian market, and as we approach the autumn sowing season, when domestic farmers need NPK, they may experience fertiliser shortages due to inconsistent apatite concentrate supplies to the Group’s facilities.