Joint Statement by Belaruskali and Belarusian Potash Company
04.09.2013
We are regretful that the decision of Uralkali to cease cooperation with Belaruskali within BPC and the subsequent public announcement led to consequences negative for all market participants.
This unilateral decision of Uralkali has come as a surprise to us as well — notably in light of the compromise agreement encompassing all key aspects of joint work within BPC that was reached and put on record in June of 2013.
We hold the emotional statements of V.Baumgertner, Uralkali’s CEO to be unprecedented; they are not aimed at pursuing new strategic goals but geared to achieve private interests of Uralkali’s shareholders and personal ambitions of some of its managers.
The above is true both for the statements about readiness to reduce prices, and concrete injurious actions against its former partner in BCP with some of those actions calling for legal evaluation.
Belaruskali and BPC don’t support the new strategy of Uralkali and disagree with their estimated price scenario for potash market development in as much as it causes damage to our customers and leads to uncertainty in the market.
We believe that Uralkali’s capability to exert influence on the market is overrated. We are convinced that there is no producer who single-handedly can change the philosophy of the potash business overnight after the long years it took to be established.
An important point to note is that while Uralkali claims to be the industry leader, as a matter of fact it has problems with potash mining and production, and logistics which undermine its alleged potential.
BPC retains its status of Belaruskali’s trading company and is committed to honor its current obligations to supply potash fertilizers.
BPC will pursue flexible strategy of sales dictated by sound judgment and targeted at reaching close ties with every customer. Business development with the strong focus on customers’ preferences is BPC’s marketing priority. We believe that customer service, production and transportation infrastructure, and quality and a wide range of products are the bedrock of mutually beneficial cooperation.
BPC’s further trading policies will still be targeted at establishing and maintaining close contacts with consumers of fertilizers and at mutually beneficial cooperation for a long time ahead.
However, at the initial stage of its work in new conditions, while exercising full control over the pricing BPC may employ the services of traders on some markets.
According to our estimates, time required for Belaruskali and BPC to assess the ramifications of Mr. Baumgertner’s provocative statements which upset the market, and elaborate its own sales strategy, has been used by certain traders to spread false information about the breakup of BPC and make attempts to reach agreements at knockdown prices.
We confirm that these traders are not supported by Belaruskali and BPC, and the rumors spread by them are vastly different from the truth.
Scheduled maintenance turnarounds at some of its operation facilities will help us find our bearings and assess the situation so that we could avoid doing harm to our partners all over the world.
In the short run BPC will structure the sales of Belaruskali’s product barring unjustified pressure on the market.
Being mindful of its role in the global potash industry Belaruskali together with BPC, as well as other disciplined market players are aware of the responsibility for their actions and will take a balanced approach to every step in the long-term perspective.
